RE:News Releasedjstone,
djstone56 wrote: Well played Mark. Just enough content and facts to meet your legal disclosure requirements...but not detailed enough to get you into trouble. Just a few observations...
1. It's unfortunate that you and the Board arbitrarily decided against some of the smaller offers for portions of the Company. Now that we're making enough money to stay afloat, any one of those deals could have made us profitable enough to fund our own drilling on our other land packages;
2. Fair is fair...you're right that a $7 million break fee is excessive;
3. Even in it's current form, the 0.33/sh and Spinco offer is far better than Titan's offer for all non insider shareholders. Titan's current s/p is 10 times higher than it should be, based on it's assets and liabilities. They have no money and the proposed 900 million shares post takeover will quickly double if they actually intend to develop the properties. Massive rollbacks and excessive financings with their "sophisticated investors" will virtually wipe out any current shareholder equity.
4. It will be interesting to hear the take on this from the other Interested Party's side. Better hope they don't go public. Bargaining in bad faith and allowing Javier and Gregg to take part in a process that they agreed to scuttle doesn't look good for you as CEO. Someone may end up wearing this....djstone
Excellent points as always djstone !
Review :
Titan shares are basically worthless
https://stockhouse.com/companies/bullboard?symbol=v.cgld&postid=30458586 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$0.011 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. See Titan MInerals Half Year Accounts
https://www.investi.com.au/api/announcements/ttm/3449e75e-97b.pdf
Titan books A$11,952,365 of "goodwill" in "intangible assets" in relation to the purchase of Andina Resources in 2018. This is out of a total asset value of A$28,468,519.
Recent public documents reveal that their Vista Gold Plant operating permits are in jeopardy
of being nullified, so what value does that asset have ? And Titan has not made any public disclosure regarding the legal status of the Vista Gold Plant permits.
Appears the only solid asset that Titan has is the 9,151,363 shares of Core Gold that Titan obtained in a March 2019 private placement, but Titan had to borrow the US$3 million from a key backer of Titan Minerals to pay for those shares. And Titan Minerals had to use the Core Gold shares as collateral for that loan, a loan that has already had it's maturity date extended to (I believe) December 20, 2019.
Titan currently has approx. 296 million shares outstanding ...... so giving them the benefit of the doubt and using "tangible assets" of roughly (A$28,468,519 - A$11,952,365) A$16,516,154
Total liabilities are stated as A$13,259,851
A$16,516,154 - A$13,259,851 = A$3,256,303
296,566,718 shares issued and outstanding
A$3,256,303 / 296,566,718 = A$0.011 per share
And Titan is currently halted with an artificially propped up share price of A$0.18 .
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.
DO NOT TENDER TO THE TITAN MINERALS OFFER
I'll take the $0.33 in cash and the Spin Co. ...... then we bring in one or two of the other smaller offers for a JV on Copper Duke and Linderos Project, for upfront cash ... of course we'd have to get rid of most of the miscreants siting on our board of directors.
GLTA