RE:RE:RE:RE:Reality: the fact that you didn't get a buyout announcement,riverrrow wrote: Gold is now trading at $1600 US which is about 10% higher than what TMR sold their gold for in quarter ended Sept. 30. If gold should happen to stay above $1600 that should more than make up for any gold recovery shortfall. The opportunity to buy TMR on the cheap may have passed. Nevertheless I couldn't resist selling some TMR shares to raise some funds to buy into a company with more buzz. GLTA.
Not bashing here; I am tempted to take up a position (I have a thing for distressed gold miners) but I'm going to wait until the strategic review shakes out. I've done some DD on TMR, though not what I would call extensive so take this for what it's worth if I'm missing something obvious.
My thinking is that RCF looks pretty deep underwater... taking a $4 /share or less buyout would be a pretty epic capitulation on their part. NEM doesn't look like they need cash so no real incentive to take a lowball offer. And, effectively, both of those parties have to agree for a takeout at lowball price X for it to happen, which makes it even less likely.
The only reason I think either of those major shareholders would take a lowball takeout would be if they believe the asset/plant/whatever is impaired beyond reasonable repair (or without epic amounts of cash, which is the same thing)... and if that's true who is going to want to buy it? And even if some major thought it was worth buying in spite of that, their shareholders would probably punish them for it... we just came out of an era where numerous directors and CEOs of gold miners walked the plank for reckless acquisitions of "bad" assets, even if "bad" is more perception than reality.
So I kind of think the announcement was more to tell the market that the two large block shareholders that have a controlling stake are open and willing to entertain another large block shareholder that is willing to put up cash (because RCF is already in too deep and NEM would get punished by its shareholders even if management wanted to provide the needed liquidity). I think generally large money players would shy away from financing TMR because they'd assume that those two large-block investors would not want a third major shareholders involved.. the slightly desperate NR basically told everyone that they're open and willing to that possibility.
So I think the probable outcome is that non-miner money comes in and funds TMR for this year's sealift as well as additional liquidity for upcoming debt repayment (just in case). Maybe a little extra for capex for the plant. Another reason I think a financing is coming is because it looks to me that in spite of steady selling pressure someone keeps hitting the ask to prop up the price at the $2.40 level... perhaps defending an under-negotiation $2/share financing.
If this ends up being equity financing, I would not at all be surprised if that money comes from CPPIB or similar. CPPIB has demonstrated that they're pretty savvy investors given the size of their portfolio. In many ways they operate like private equity yet have an extremely long-term outlook. Investing at home, especially in Nunavut (red-headed step child of Canada) is good PR and they'd be coming in at bargain prices.
Anyways, just my opinion of what I think is most likely to come. If It's a dilutive equity financing, I'll wait until the probable share price drop close to the financing price and start buying. If it's a takeout, I hope it's for a high price for you trapped longs (believe me, I know your pain).