RE: Your word Irish- I think the over-all consensus is that in one way or another, this entire mountain will be consolidated in some respect at some point in the future. Given the extensive amount of work already completed in Cali by EOM, AUX, GWY and CVZ (and their predecessors) it would make sense that area be consolidated first. I don’t think there is a doubt in anyone’s mind that this will happen and will happen soon. It will be EB and whoever beds down with him and AUX, which looks like Qatar. There is really no question there other than timing and price.
As for Vetas, exploration and development is somewhat behind Cali, albeit likely not very far anymore given the work that GWY and CBJ have been doing. For the same reasons we believe there will be consolidation in the Cali area it would only make sense to consolidate Vetas. IMO there are numerous possibilities in terms of how that will take place and who will be in control of the area when it’s all said and done.
Someone this board previously posted that the Colombian Government has concerns over a single individual/entity controlling the entire mountain (i.e. EB). I tend to agree with that and there is a possibility that even with an outside investor like Qatar, the Government may not be comfortable letting them consolidate the entire mountain including Vetas. I’m not saying that it’s not a possibility, I’m just not as confident in EB and Co. scooping up Vetas as I am Cali. At least not in the near future anyway.
One thing I am confident about is that at some point in the future both GWY’s and CBJ’s interest in Vetas will be consolidated. I really don’t see CBJ acquiring GWY’s interest under this scenario. They are busy drilling away playing catch up with the rest of the area and would have a difficult, if not impossible, time funding the acquisition. GWY on the other hand would have no problem funding the acquisition of CBJ after the sale of Cali nor would AUX after the Qatar transaction.
IMO I see Vetas going one of two ways……it either gets scooped up via mass consolidation of the mountain in a scenarios where all of GWY is acquired along with others such as CVZ in Cali and CBJ in Vetas. This would offer the heavily discounted upside that EB would be looking for in the event that he has to pay more than he would like to get GWY. He will have a much easier chance of acquiring those two companies on the cheap for something to brag about than GWY at this point I would think.
I also think that there is a possibility of GWY using the proceeds from Cali to buy CBJ in Vetas and continue their work there. They will likely have ample cash on hand for both the acquisition and continued exploration and development of the area, particluarly if we can squeeze out the $5.13 that Tris keeps putting on Cali. Given the significant success that both GWY and CBJ have had, along with the existing and albeit somewhat dated infrastructure there, there exists significant upside in the area and it would be much quicker to get the area into production at much lower costs I believe.
Most have entertained the possibility that EB and Co. will eventually own the whole mountain but I think I’ve only ever seen one comment a while back about the possibility of GWY buying CBJ and it didn’t get much attention. Just wondering what everyone thinks of that possibility and/or others for Vetas that might not involve EB.
BH