Resource Capital Gold Corp GDPEF

RE:RE:*****HALT THE SALE OF RCG IMMEDIATELY****

[LeftBook]

Secretive bids have the advantage that each bidder is making their own judgments about the value of the property.  

Presumably each bid has :
1. estimated the future value and cost of the properties appropriately.
     a. NPV $89.2M is an estimate for 208,000oz Dufferin
     b. There might be 1 million ounces at each property
     c. balance sheet is first order approximation of value as-is
2. estimated the value of the tax credits
     a. tax credits could be sold in open market at, say, 50c on the dollar
     b. tax credits might reduce theie tax expenses by $20M
3. estimated their ability to pay 
     a. amounts owed is a known expense.
     b. they can seek alternate financing
     c. liabilities are roughly offset by tax credits.
     d. Each bidder will be vetted for their ability to pay
4. make their own adjustment for risks
     a. each will do it based on their vision of project
     b. their own experience and financing
     c. they will try to minimize their cost
5. make a bid with the knowledge there are other bids
    a. they will maximize their bid

In short, they will make a bid on their estimate of value.

Highest bid takes it.

===

My estimate 

1. cash buyout  
    $31.3M assets + $10M tax credits = $41M
2. merger
   $31.3M assets + $10M equivalent of off balance sheet items (management/production) = $41M
3. asset sale
    $31.3M assets + $10M sale of shell and tax credits  = $41M


31.3 assets + upside
+ 10 tax credits/ de-risked
- 18.3 liabilities
- 2.2 DIP
= 20.8M

20.8M/175 = 11.9c/sh