About the $1.40 Offer. DO NOT TENDER NOTE: Full details and much more can be found at my personal website
at www.highrivergold.net
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Is This $1.40 Offer Fair?
Let’s dumb it down.
If you owned 100% of High River Gold, and you looked at the producing gold mining properties you have within your HRG asset portfolio, and you considered HRG’s cash flow, profits, cash & the other gold mine securities you owned within HRG - and considered the fact that your newest mine BISSA will have additional production in 2013 @ 93K ounces and 161K ounces in 2014, you would see a company that, when measured in comparison to other firms of the same size, profitability and holdings (including its valuable Prognoz Silver property), HRG today would have a value that would easily exceed $3 Billion CDN dollars. The production future at HRG has never looked brighter, nor have profits. So, why would you sell your HRG shares at a valuation of just over a Billion? The reality is that if you wanted to sell your shares, you would look to a Peer Valuation, and you would say “For Sale at $3 Billion Dollars”. But, if your “Partner” owned 75% of your HRG (which Nord Gold does), and your partner said they wanted to buy you out, you would say, “Fine, pay me based on that 3 Billion value” - which is well over $ 3.50 per share. But, your partner says to you they have “proof” you are only worth just over $1.1 Billion because they are worth a very low P/E multiple too - so on a conversion of your HRG shares for Nord Gold shares, you should also get a low P/E too. Hmmm. THEN, incredibly, they tell you that they hired a company (Paradigm Capital) to do an “independent valuation” to back up your low multiple and value - which incredibly is the same firm that said you were worth 22 cents just a few years ago. Months later, you were at 90 cents!
Sounds fishy, and to me, that is exactly what this deal looks like.
Lastly, there is an offer to convert shares to Nord Gold however, from Gazprombank, the following was a noted risk on Nord Gold which appears to be more significant than I previously considered. The government of Guinea is reviewing its mining licenses, and you can Google the concerns regarding Nord’s assets. I for one, do not want Nord Shares. I would like to see a fair value offer for HRG shares.