Casey Research Buy Out Comments Comments:
(ICG.V, ICGQF, C$0.80, 486.5M SO, 517.5M FD, C$389.2M MCap, www.integragold.com)
This is a big win for us. The offer represents a 404.2% gain over our initial recommendation. We took profits, of course, and rightly so, because no one ever knows for certain how any of these speculations will end up. Fine. But what to do now? Fortunately, you have more than one choice.
We like the deal, and we like Eldorado as a buyer. It’s a turn-around story that, among the larger producers, has big growth on tap. Buying Integra will add a high-margin operation with a short path to cash flow, in a safe mining jurisdiction. For Integra shareholders who choose to Hold for EGO shares, there’s exposure to the upside in Inegra’s Lamaque gold project, as well as in Eldorado, via opting for shares in Eldorado. Yes, that dilutes our upside in Lamaque, but we would have suffered some dilution anyway, if Integra had had to raise the money needed to build the mine on its own. We encourage those who stay long to vote with management on this deal.
But what if you don’t want to own shares in a bigger, less volatile company? That’s fine; you can opt for cash as part of the deal.
Note that whether you choose cash or shares, the deal sets a limit on both, in combination. You may get some shares with your cash, or cash with your shares, depending on how the chips fall.
Another option is to go ahead and sell into the volume and higher prices this news will generate. either way will cash you up so you can buy into other juniors with more potential for higher gains than Eldorado.
Whichever you choose, congratulations on this successful speculation.