RE: Press Release re: Nord's HRG offer With al due respect to the opinions of C. Charlwood re the value of HRG versus Nord Gold, any way you turn the numbers, 0.285 (share swap factor offered) of S 4.80( value of Nord Gold) is only $ 1.368 given to HRG shareholders. The suggested 0.333 share swap that C.C. would prefer is still a pittance ($ 4.8 x 0,333= $ 1.598) to what the real value of HRG is, recognized with its actual financial contribution to Nord Gold to be between a minimum of the 49% of production in 2011 to a maximum of 105% of profit in Q1 of 2012. Taking the minimum of 49% (0.49) it would value HRG to $ 2.35, while the maximum of 105% (1.05) would show $ 5.04. The average of these numbers brings HRG’s value to $ 3.96,
and that is without considering Prognoz and other less well known components.
C.C. mentions in his communication, “I asked for a 3 to 1 share swap, which translates to .333 Nord share for each HRG share. This works out to HRG being worth 66% of Nord. My logic for this was assuming HRG is worth a minimum of 50% of Nord’s value, then add on HRG minorities’ 25% of HRG’s liquidity position of $322M (end of Q1), plus estimated additional cash of $40M in Q2, you get to a 3 to 1 exchange ratio.”
I find his logic hard to understand and accept.
This is numbers HOCUS-POCUS!
SIMPLY PUT, 50% OF $ 4.80 IS $ 2.40! 66% of Nord Gold would be $ 3.168.
In my opinion, if we are offered a share swap of 0.666 (and a TSX listing) or a value of over $ 3 for our HRG shares, we are coming closer to acceptable levels.
Adam 09