RE:RE:RE:RE:RE:RE:RE:RE:Timmins holding While most jurors with good economics/high margins are eventually taken out by major's or mid-tier's, of which create short-term up-side gains of 20%, 30%, 40%, or more, those shareholders currently holding Timmins shares at this stage of the companies growth curve would IMO see much higher gains, by forgoing any buyout, and letting the management team continue to de-risk, and develop the AP project.
With that being said I would still have to believe that after the feasibility and permitting are completed, there's still a better than 50% chance of being taking out in one form or another.
All of which lays in what direction the BOD, and major shareholders want to set the Timmins course. The course of either enjoying an immediate short-term profit spike in share price with a buyout vs enjoying a much larger gain in share price over the next couple years with AP & SF both in production together. Enabling cash flow coming from both mines to help exploit the huge resource potential of the SF & AP land packages, with an extensive, and aggressive exploration drill program. A program that could/would culminate in an substantial increase in resource, future production, free cash flow, and share price, multiples of what any take-out would provide.
Regardless of their decision, what is imperative for shareholders is that between now and the completion of the FS & obtaining all necessary permits to begin construction, that the current unrealized value of Timmins is brought out, and represented in a share price that's at least double than what it is today. We all understand for those that have done their homework that Timmins is currently heavily underpriced by the markets. Which may be great for those companies looking to TRY and add an high margin, low cost AP project to their project asset list, but not so great for Timmins shareholders.
For those not aware of the new canadian take-over bid rules effective earlier this year, here's a link covering the new changes which are favorable for shareholders:
https://www.canadianmergersacquisitions.com/2016/02/26/canadas-new-take-over-bid-rules-seek-to-level-the-playing-field/
Speaking of being undervalued - Timmins shares trade currently at only ~3.5 X forward cash flow, which is an extremely low ratio when compare to those of it's peers which trade at 2x, 3x, and above this P/CF ratio.
Why so undervalued when comparing Timmins with other similar miners remains a question to most shareholders. One of the reasons that I suspect, and surly others could be added on, is that: Retail investor, Fund investors, and Institutional investors have yet to be convinced that the current management team has completely turned this company around, and are waiting to see further evidence that Timmins is "financially" able to continue their quarterly reporting of FCF from SF, so as to meet their short term goals of both strengthen their treasury, and bringing along their cornerstone asset Ana Paula into construction early 2018.
Because of Timmins past financial weakness, having a stronger treasury is a must in fortifying confidence with all potential investors, from retail to institutional. With the continuance of positive financial quarterly reporting, confidence in the stability of the company going forward will no-doubt increase investor interest in Timmins.
One last thing, if having a strong treasury is a big plus for those new investors now sitting on the sidelines, would it not perhaps also seem prudent for management to seek-out terms, if favorable, for a line-of-credit using SF as collateral, not to be used necessarily, but as another means of adding financial flexibility, solidify the company image of sustainability in the eyes of those future investors. GLTA