my bet LMC is going to buy GUYhere`s an expert from IKN
back in
5. Okt. 2017, - diffrenece today is, alhough Leagold is down quite a bit as well
now GUY is buyable for them - Although other metals aren’t out the question, this company is obviously a project with gold in mind.
- LMC is the LatAm version of EDV. The formula works, it’s lather/rinse/repeat time.
- EDV bought late-stage projects, mines working sub-optimally, or companies with balance sheet pressure (subsequently alleviated by share placements) (also see how Crocodile Gold transformed itself and was bought out…same plan).
- EDV has at least two purchases in mind, even as it progresses with Los Filos.
I don’t want to make this a long-winded piece, so let’s get straight to the point. I’ll be very interested to hear what other ideas or suggestions you out there might have for potential targets, but after due consideration and plenty of chinwag with a range of contacts, here are my three calls as logical contenders. Two are best fits, one is a possible alternative.
For next purchase: Best call Argonaut Gold (AR.to). Argonaut (AR.to) has the right mix: It’s an operator, it’s in Mexico (same as Leagold), it’s been woefully run over the years and its assets are in need of a shot in the arm. After a string of bad purchases which AR refuses to write down, it currently runs a book value of U$627m, so considering that its operations turned a minor profit in Q2, just considering its market cap of approx U$347m (CAD$1 = U$0.80), the price/book of 0.55X points us at one dysfunctional company that could do with a new broom. Its market cap is roughly equivalent to LMC’s at the moment too, so it would work on a “merger of equals” marketing frame.
For next purchase: Possible call Guyana Goldfields (GUY.to): If it weren’t for the fact that GUY is 1.5X the market cap of LMC at the moment, this would be my prime choice. As things are, it might be too much of a reach at the moment. GUY operates the Aurora mine in Guyana and had a problematic Q2, which along with a piece of minor bad news about Q3 recently has seen its share price drop quite sharply. Again a producer, again a great fit, GUY also has some financial debt on board which weighs on its bottom line results and that’s a fit for the Woodyer model, too. However, in order for this one to be a live possibility we’d need to see its PPS climbing first because no board in its right mind sells out at lows unless under serious strain.