RE:Odds on takeover?Any thoughts on potential takeover targets for KL? I've heard speculation on Osisko bandied about - any other possibilities? Do they even need to acquire any more possibilities to bolster their reserves?
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I think KL definitely needs to bolster reserves. It is the only thing holding this stock back from being the Superstar Darling GoTo gold stock anywhere as the gold price starts rising exponentially from current levels.
The question is how? Will current exploration targets at Fosterville , Macassa and Northern Territories Aus. provide enough reserves? Novo investment is interesting but not proven.
Targets , I like Wallbridge-Balmoral but they still have to prove up minable reserve as well.
Pretium would be fantastic as it would add reserves with growth potential as well as production. Unfortunately it would take a brave management decision to do it as it would now take probably $20 / share -- $4 Billion CAD to do it and maybe more if other bidders get involved.
I like the reserves at Osisko but is the grade high enough? If you just want ounces Barrick might part with Novagold. I don't think it will be mined anytime soon but may have 50million oz but because of the remoteness and high capital required to construct a mine its not realistic even though they have most permits now. If all you want is more reserves on the books and aren't concerned with bringing it into production soon it might be ok to acquire for now and then dispose of it if other more profitable reserves are found elsewhere but again too expensive as unless gold goes ballistic it will probably not be mined.
I think any good large reserve target in Canada or Australia would be ideal to give the market confidence that we have long term reserves. If we later decide to farm them out or sell them outright there would probably be no loss in this rising gold price environment and if not too costly would provide a stronger base for our share price.
The advantage Kl has right now is they can acquire properties with cash or cash plus debt. At some time in the future they might be able to offer shares as well but right now the share price is too undervalued compared to peers that don't have the same cashflow per share.