Titan Minerals Highly Dilutive Offer .... Just some quick calculations ....
296,566,718 - Titan shares outstanding
488,947,392 - shares ot be issued to CGLD shareholders 3.1 X (166,876,328 - 9,151,363 shares Titan already holds
21,875,000 - shares to be issued at A$0.16 for A$3.5 million 8,876,013 - transaction fee to be paid to Bacchus Capital Advisers
816,265,123 shares issued and outstanding if the Titan offer is successful
On a fully diluted basis, Titan could have to issue up to 566,814,339 shares to Core Gold security holders. Notice that Titan does not include the shares to be issued to Bacchus Capital partners, (noted in the Pro Forma statements at the back of the Titan Circular)
On a fully diluted basis Titan could have as much as 894,132,070 shares outstanding.
( 885,256,057 + 8,876,013 )
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Now, let's be real generous with Titan's numbers, what would Titan's shares be worth if the hostile takeover were ever successful :
The Titan offer is roughly A$0.55 per Core Gold share and is spuriously based on Titan’s last trading price of A$0.18 ...
.... or using the AUD/CDN exchange rate of $0.91 X $A $0.55 = C$0.50 / share for each Core
Gold share
C$83,438,164 - ($0.50 X 166,876,328 CGLD shares O/S )
C$3,185,000 - (A$3.5 million financing X $0.91 exchange rate )
C$13,200,000 - (US$10 million debt facility X $1.32 exchange rate)
C$99,823,164 – Total "perceived" value of the Titan offer to Core Gold
C$99,823,164 / 816,265,123 shares issued and outstanding if the Titan offer is successful
Comes out to only
C$0.121 per share of value for Core Gold assets post takeover with
all the new shares issued and outstanding.
Seeing as we would receive 3.1 shares, what Titan is offeing us is really only C$0.375 per share, (on a fully diluted basis C$0.341 per share) as Titan's shares are basically worthless confetti paper, with unknown environmental legacy costs at Tulin, and a highly suspect Vista Gold Plant valuation due to the possible, probably nullification of the operating permits for the Vista asset.
Or, on a fully diluted basis
C$99,823,164 / 894,132,070 = $0.11 per share There are at least hree problems I see at the moment ....
Problem 1.
The currency of this offer is in Titan Minerals shares. No one believes that the tangible assets of Titan Minerals comes close to justifying an A$0.18 share price. See above calculations bringing their net TANGIBLE asset value down closer to A$0.0121 cents per share. In reality, Titan Minerals will more or less just be Core Gold’s Ecuadorian
assets upon completion of the takeover attempt. I would tend to expect that Titan will divest of its Peruvian “assets” or just write them off, as they have with most of their other supposed “assets” in the past couple of years.
Problem 2.
Titan MInerals would still have to deal with Core Gold's legacy debts. Not included in the above calculation. And Titan fails to mention anything about how they will deal with Core Gold's legacy debts, What they have raised and intend to borrow, does not cover most of Core's debts, And Titan needed money to pay for the US$3 million loan used to purcahse the 9,151,363 Core Gold share it received in the March 2019 private placement
Problem 3.
Most Non-Canadian residents will not even receive Titan shares, Titan will take up all those shares, and attempt to sell those new Titan share holdings into the Australian Stock Exchange on a best efforts basis, and the Non-Resident Canadian shareholders will then receive the cash of whatever Titan was able to dump those shares at into ASX, could be as low as … well you use your own imagination … and who would be on the bid side ? A$0.10 … A$0.08 … ?? Unless they have buyers lined up for block purchases at some sort of discount to the prevailing market price at the time.
Just some things to consider ...... while we all wait for news from Core Gold
One would have thought that Core Gold shareholders would have been provided some comments from our company regarding the rumours that started floating in public last Friday ?
It is not like they haven't had the whole weekend to coble together some sort of lame excuse
for the actions of directors Gregg Sedun and Javier Reyes ....
Personally, if the rumours are true about a $0.33 cash offer and some paper, and a $10 million financing, I'd take the cash and paper in a heart beat, if we were still going to have the opportunity to particpate in the upside of any exploration on our other projects, if, according to the rumours, the other offer is taking all of Dynasty Goldfields ..... remains to be seen ....
........just my humble opinions ..........
DO NOT TENDER TO THE TITAN MINERALS OFFER
GLTA