RE:RE:RE:RE:EO financing proposalschmoby,
You are quite right with your opening remarks about there will be no cash sale, and that the majors are only interested in something that is in the range of 4-5Moz. But, the subsequent argument (that seems to be based on a whole host of loosely connected items) that somehow leads to a conclusion that there is no upside potential for AZX.
Nobody is expected a cash sale of any company in the area, including the sale PRB which has a total RE of 1.4Moz. In one corner we have PRB (anchored by G with 13.7%) on the other AZX is anchored by AEM (6.6% FD) and ES (ES holding is even larger than AEM at 13.9% if all wts are exercised; AZX United (yes, it's us with almost 10%FD). Let's ignore IMG and Teck (1.6% FD each) to simplify the picture (they are expected to side up with AEM). As indicated, AZX is not expected to be left in a bankrupt situation by major shareholders like AEM and ES (he's in this for the money).
What would be expected/speculated? in the end (from now until 24 July) is some kind of a merger between PRB and AZX. It would be an all share swap, based on the valuation of the Au each company has in the ground. The surviving company would be PRB (well run by a good group of people). All this has to be approved by G, AEM, ES and may be a few other influential people (e.g. PRB BoD Chairman who is also AEM Director). This merger would be the first phase (QMX may be involved in this mix, but let's leave it out, again to simplify the situation). Let's recap.
- Phase 1: Merger between PRB and AZX with all share swap that would be agreable by all key people and shareholders of course. This is where AZX shareholder would receive the first upside, since AZX has been given an extremely low valuation by the market (below $20/oz in situ) with the un-updated RE. The upside woud come when the evaluation is done by comparing the resource each company has in the ground. Currently PRB is valuated with something like (119-25M cash)/1.4Moz = $67/oz in situ. They may spin off the non-core assets (inManitoba) to be sold for cash.
- Phase 2: The combine company under the leadership of a more skillful team (and support from all key players) will grow the resource toward the 5Moz range. They could probably do this in 1.5-2 years.
-Phase 3: The 2 majors, G and AEM, will duke it out to claim the 5Moz prize (ES will have to reveal his support). Upside for all shareholders.
Just my speculation folks while waiting for some kind of NR to come out from WH. Do your own DD.
Cheers,
GH
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Schmoby wrote: easycoder wrote: 15:1? With PRB at $1.20 or thereabouts there's no upside for an AZX shareholders. I have no idea whether PRB will figure into the sale or not - kinda hope not to be honest. Anyway let's get cash or shares in a major if we can.
There won't be a "sale" to anyone, there will an all share merge/swap if it happens. THERE WILL BE NO CASH FROM ANYONE.
Majors aren't interested in deposits of this size that haven't been proven up, too much risk. You need 4-5m ozs or some really spectacular grades near surface. If you are expecting a major to give you cash, you can plan on waiting until AZX runs out of money and goes to zero.
No upside..LOL!
1) A premium on current share price 15 x .07 = $1.05 current PRB price $1.18
2) $40m in cash
3) 85,000 2018 drill program in progress, planning 2019, will likely update RE dependent on drill results
4) stable, respectable, proven management
5) great property portfolio as well
Yes, no upside, not nearly as good as what AZX has right now....I never understand common sense over greed.
When you sell something it is only worth what a purchaser is willing to pay for it. If EO is successful we'll all be diluted and reversed, if he is unsuccessful AZX is out of cash and no plans to raise any in the near future, this means no drilling. Whichever of these two parties wins we will all lose, it's dead money at this point IMO.