RE:RE:RE:RE:RE:RE:RE:*****RCG. $1400 PLUS GOLD****)
The balance sheet provides a quick and dirty estimate of the value of the company.
balance sheet assets
- liabilities
= shareholder equity
A better estimate of the value to include the in-situ gold, the value added to Dufferin bringing it closer to production, and the tax credits. Let's call that value the real value or intrinsic value.
intrinsic value
- liabilities
= shareholder value
I was saying that RCG could go for:
$41.6 intrinsic value
- 20.8 liabilities
= 20.8 shareholder value
This can be broken down as ...
$20.8 RCG mining assets
+ 20.8 tax credits
- 20.8 liabilities incl SISP
= 20.8 shareholder value
There is a scenario where the mining assets are acquired for "free".
The scenario assumes the buyer has $20.8M of taxes to pay and has $20.8 cash to pay them.
The buyer acquires the tax credits of RCG freeing up the $20.8M of cash for paying the creditors.
In a nutshell, the buyer takes possession of the mining assets using taxes savings.
If the RCG assets can be sold for more than $20.8M then the buyer can make a second profit. If the assets can not be sold for $20.8M and the buyer has no interest in the property it might be better to pay the tax instead.
In this scenario Eric Sprott and other investors take a haircut on their investment.
They invested at an average of 14c/sh
They receive $20.8/$175M = 11.9c/sh
Note:
The liabilities are 20.5M.
18.3M+2.2M = 20.5M
For simplicity I round them up to $20.8M.