RE: RE: M & A soon to become derigueur? Let me ask you this..... If you were IAG, What would you do?
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You just spent well over $11MM drilling off the Kalana property in order to earn a 51% share of that property. Oh, and one has to show that the property has 2 Million ounces of gold. So what would you do?
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A. Make an off to buy Avnel outright, BEFORE you announce the 43-101 resources and ounces that could generate interest and raise the share price? Because if you wait until later, the value of AVK's holdings should increase and buying later will cost you more.
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B. Or do you do something like this, become the 51% partner in a JV with AVK and make plans that cost a HUGE pile of money, since one is spending only 51-cent dollars and AVK has to come up with the other 49-cents.
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IAG could put the burden on AVK to meet the cash calls and dilute itself in order to raise money to meet the cash calls? After all the mining operations are doing little more than just keeping the company "hanging on."
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The end game of such a play could be similar to what Hochschild almost did to Minera Andes over the San Jose Mine before McEwen stepped in to meet the cash call? [Hochschild appeared to heap cash call on cash call onto Minera. Then interestingly, at nearly the same time as Minera's lender called in its loan, Hochschild heaped another cash call on Minera. Then as the market was seeing bankruptcy in Minera's future, Hochschild made a "White Knight" low-ball bid for all of the shares of Minera.] So essentially IAG can bleed AVK dry until AVK can't meet the cash calls and has its interest diluted, or force them into a weak position and buy them out at a few cents.
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So if miners are looking for ounces and AVK has over 2 Million ounces of REAL high grade (>10 gpt) ore, then AVK should be a good M&A candidate. er, no?