Speculation mounts... Speculation mounts over what's next for Batista's AUX in Colombia's California gold district
Analysts speculate AUX might want to buy up juniors in the California gold district in Colombia, but only one thing's for certain: nothing.
Author: Kip Keen
Posted: Wednesday , 17 Oct 2012
HALIFAX, NS (MINEWEB) -
Stock forums have been aflutter with chatter about possible junior consolidation in Colombia's California gold district where Brazilian billionaire Eike Batista's AUX owns the multimillion ounce La Mascota and La Bodega gold deposits. No doubt injecting adrenaline to speculation was the strong run up in the shareprice of one of its junior neighbours, Galway Resources. As Canaccord pointed out in its Morning Coffee publication on Wednesday, Galway has climbed over 50 percent without an iota of news to explain the move.
You might call Galway a thorn in AUX's side. In addition to wider concessions, Galway holds slivers of claims that bisect parts of AUX's tenements that encompass its resources at La Mascota and La Bodega (=3.5 million ounces gold, inferred). See for yourself in a land position map drawn by Galway where its turquoise tenements clearly pierce through AUX's grey concessions, resources included.
Meantime, Galway also has a million-odd ounces gold in indicated and inferred resource on its main California claim block, illustrated by red squiggly lines, right next to AUX's land (=424,000 ounces gold @ 5.53 g/t, indicated; and 666,000 ounces gold @ 5.38 g/t, inferred.)
Galway's resource was a first for it and only came out this past September prompting Canaccord to pose an open question. "Now that Galway has completed and released its maiden resource estimate for its California project...is Brazilian billionaire Eike Batista's AUX now ready to make a move?" It followed this curiosity up by noting, "Ever since Batista's purchase of Ventana Gold in 2011, speculation has swirled that further consolidation, specifically AUX and Galway, would make a lot of sense." Canaccord quoted a Toronto-based analyst who stated Galway's land position and exploration success "make the company a prime take-out target for AUX."
Priming the ground for further speculation is a Qatari connection, to which Canaccord and others have drawn attention. Indeed Galway highlighted this up front and center in its most recent overview of its projects, stating: "Qatari wealth fund reportedly plans $10 Billion gold buying spree" and, more to the point, that this fund "reportedly agreed to purchase 49 percent of AUX for $2 billion," leading it to dangle that open question in a two-word phrase: "potential consolidation?"
While Qatar has denied talks with AUX are underway, according to Reuters in late September, an unnamed source told the Dow Jones Newswire in early October the Qatari government was in fact negotiating with AUX. Further, Reuters subsequently reported that Batista said $2 billion in cash was coming EBX's way (the parent of AUX) by the end of the year, though he was not forthcoming to reporters about the source of the multibillion-dollar payday.
Yes, billion dollar paydays, intertwined mineral claims, volatile share movements and expert analysis, perfect stuff to drive speculation about what happens next in the California gold district.