RE:We were offered C$0.415 in real valueWith my previous post's numbers in mind (quoted below), does anyone else find it just a little more than coincidental that Titan MInerals first offer of 2.5 of their shares for each one of Core Gold's shares was just a penny higher than Zhaojin MIning's September 2 offer calculated to be worth approximately $0.415 ?
As stated on Page 9 of Titan's circular the closing price of Titan shares were A$0.19 on September 27, 2019, giving an effective offer of C$0.426
A$0.19 X 2.5 = A$0.475 X $0.897 (prevailng exchange AUS/CDN rate) = C$0.426
How could Titan Minerals have known to offer exactly 2.5 shares to just "beat" the September 2 offer that Core Gold had sitting in front of them .... unless there was a leak .... possibly Javier Reyes .... Gregg Sedun .... maybe someone else ..... ??
Once more, a few questions remain ..... and are directly a result of Core Gold's
LACK OF FULL DISCLOSURE to all shareholders. .
Why did Titan MInerals increase their offer to
EXACTLY 3.1 shares on December 9, 2019, within 10 days of director Javier Reyes signing two lock-up agreements on behalf of two banking institutions directly under his control, and 6 days after Gregg Sedun signed a lock-up agreement with Titan MInerals on behalf of shares held under Alcaron Capital. ?
How would Titan know to increase their offer to
EXACTLY 3.1 shares giving a perceived value of C$0.523 per share for Core Gold ? (Hint - The lock-up agreements signed by Javier Reyes and Gregg Sedun compelled them to report to Titan on any offer or negotiations ongoing with Core Gold ..... isn't that a conflict of interest ? A breach of fiduciary duty to looking out for the best interests of Core Gold and its shareholders ? )
A$0.18 X 31 = A$0.558
A$0.558 X $0.906 prevailing Exchange rate = C$0.505
Add in the effect of the A$3.5 million cash financing which more or less brings the perceived "value" up to Titan's $0.523 stated offer.
Now, Core Gold admitted that another offer from the other un-named interested party, (most likely Zhaojin MIning Industry), had been submitted on November 25, 2019. Shareholders have not been allowed to see that offer.
Did Javier Reyes and Gregg Sedun panic seeing the details of this other offer and realize that all of their well laid, year long, scheme of vending Core Gold's assets to Titan MInerals was in serious jeopardy of falling apart ? Sign the lock up agreements, and create uncertainty with the other minority Core Gold shareholders, scaring them into tendering with Titan without seeing the details of the November 25 Zhaoijin Mining offer.....
Does it not seem reasonable to conclude that the November 25, 2019 offer from Zhaojin
MIning Industry was valued at least in the C$0.50 range and included a significant cash component ? A cash component that Titan MInerals can not aford to offer Core Gold shareholders ?
Does it not appear quite probable that as a direct result of Javier Reyes' and Gregg Sedun's action to tender to Titan Minerals,
IN DIRECT CONTRADICTION to their own guidance to
Core Gold shareholders, that Zhaojin Mining pulled their November 25 offer and subsequently provided Core Gold with their December 12 offer .... A somewhat weaker offer that included $0.33 per share in cash paid to shareholers and addititional restrictions on the use of the C$10 million financing because Zhaojin could not trust the "integriity" , OR LACK THEREOF, of certain elements within our current board of directors and management ?
WHY WERE CORE GOLD SHAREHOLDER NOT PROVIDED WITH FULL DISCLOSURE OF THE DETAILS OF THE NOVEMBER 25, 2019 OFFER ? Tad wrote: Why are we trading at $0.21 ?
Tells you something about what the market thinks about Titan Minerals actual share value.
How did Core Gold directors manage to screw up the original September 2, 2019 offer so bad ?
Someone, please tell me ....
The September 2, 2019 offer from the “other interested party”, assumed to be Zhaojin Mining Industry, worked out to the following:
$0.225 / share in cash
$0.14 / share (assumption of CGLD debt (US $18 million X $1.33 exchange rate/166,876,328)
$0.365 / share
$0.05 / share (C$10 million financing at $0.25 for 40 million sharesi (206,876,328 O/S shares) $0.415 per share offer.
$0.415 / share of solid known value, unlike the Titan Minerals confetti paper offer of 3.1 shares for each Core Gold share. And Titan’s offer does not take into consideration the US$18 million in legacy debt that Core Gold has.
What would be a reasonable valuation of a debt free and $10 million funded SpinCo ?
What would the share structure be ?
I'm assuming that the proposed new SpinCo would not have started with roughly 206 million shares, so what would it be consolidated down to .... a 2:1 , 3:1 , 4:1 pro rata shares issued to current shareholders ?
At 4:1 we'd have roughly 51.5 million shares outstanding.
$10 million / ~51.5 million = $0.195 / share in cash
The new SpinCo would have had Linderos, Copper Duke, Zaruma and the Portovelo Processing Plant, as well as a 60% share of all oxide ore material being mined from the Dynasty Goldfields Project.
The new SpinCo would have had no debt, and would have been pushing out significant cash flow from production of the oxide material from numerous potential open pits targets of Dynasty Goldfields.
There would have been enough money to upgrade the Portovelo Plant, and sink some money into drilling at Copper Duke and Linderos. Once listed, imagine the run up in share price if any drill results proved positive on Copper Duke, or Linderos for that matter.
So...... with a debt free SpinCo, flush with C$10 million in cash with the “other interested party”, (again assumed to be Zhaojin Mining Industry), having a 19.9% equity stake, exactly what did our board of directors do that resulted in Zhaojin reducing their bid down to the December 12, 2019 offer ?
It sure looks like certain Core Gold directors were not bargaining in good faith on behalf of Core Gold and its shareholders, and were purposely doing things that "encouraged" Zhaojin to incrementally reduce their bid with each successive offer and counter offer ...... resulting in the lowering of the value of the final offer to such an extent that Titan MInerals could "afford" to make a confetti paper offer that could be perceived as being competitive with Zhaojin's offer..
Just my humble opinion .... I could be wrong ..... but highly doubt it.
DO NOT TENDER TO THE TITAN MINERALS OFFER
This is not over yet, by any stretch of the imagination.
GLTA