GalleryJust for fun I looked into the Gallery Gold transaction. Conway bought Gallery for $200 million in IMG shares in Dec 2005. They got Buckreef in Tanzania and Mupane in Botswana. They spent $15 million on Buckreef work, and then in Nov 2009 walked away from it with nothing, taking a $117 million write-off. Two months later Conway walked away from IMG (well, he did say it was a mutual decision - quitting before being fired maybe). IMG ran Mupane until Aug 2011, when it was sold to Galane Gold for some $16 million cash and 21.9 million shares in Galane, now worth about $5million, and about 5 million warrants that expired after never being in the money. Whatever profit Mupane made for them is not included in this. Since it was the first operating mine of their own this must have been some value too. Finally they got John Shaw as a director, who came with Gallery.
So Conway took $200 million in share value and the company converted it into cash and shares worth about $21 million. After expenditures on Buckreef they were in fact left with only $6 million plus whatever profit Mupane made, plus whatever Galane can do with the remains of Mupane. So it appears that Conway made a huge mistake with this one.
Buckreef is now being started up as a mine, but with big government ownership and uncertain economics. It may turn out well, or it may not. I imagine that the profit to be made is not much at the end of the day. Mupane is pretty small, and unless it gets lucky with exploration does not have much value left.
The only good thing one can say about Gallery is at least they did not pay $200 million in cash for it. Take note Mr. Letwin.