RE:RE:RE:RE:RE:RE:RE:Listing QuestionsDon't forget that you've already paid for the spinco's, their value is currently included in AUG. Once Fury is created and the spinco's stripped out there's no way that Fury is going to maintain a $ 390 Million market cap but that's what this deal is implying so the 7000 shares of Fury for every 10,000 of AGU will fall considerably. What are the Canadian assets of AUG and ER going to be worth based on 110,000,000 shares per financing ? I'm thinking $ 1 to $ 1.50 tops.
So now you have 10,000 shares of two spinco's in your registered accounts worth $ 3000 each and you have to buy them out, something you already own.
So let's figure this out in real world terms, not pie in the sky.
You own 10,000 AUG @ $ 3.00 so you're in it for $ 30,000
AUG converts to 7000 Fury that falls to $ 1.00 as the Peruvian assets are stripped out.
Now you're down by $ 23,000
You have to buy the two spinco's out of your registerd accounts for .30 per share so that's 20,000 shares @ .30 = $ 6,000 so now your cost base is $ 36,000.
Now you're down $ 29,000
So to break even one of two things has to happen. Fury either runs to annd maintains a price of $ 5.14 or the Spinco's come to trade @ $ 1.45 each or some combination of those.
Regardless it's a dogs breakfast.
So many other ways to accomplish this even though it's comletely without merit. The only reason to do such a convoluted deal is to try to create the illusion of value and try to create a liquidity event for the boys who have been supporting the Co. for the last 5 years and who want to cycle out and come back to finance Peru seperately because that's where all the value is.
The ER guys get it and that's why that stock isn't going anywhere.
The next shoe to drop will be the terms to finance Fury for the $ 15,000,000.
Is any broker going to finance that collection of moose pasture at close to $ 3.50 ?
Even on a flow through basis that's rich !
It's going to be interesting to watch this unfold or unravel, whichever !
goldpolka wrote:
That makes sense.
I think that the valuation of both of the spincos (Peru companies) will need to be purchased from the TFSA or RRSP if held there. So, I suppose any capital gain from there up to the listing amount would be taxable outside the RRSP or TFSA as a capital gain. Then, once listed, I suppose one could just rebuy the shares in the RRSP or TFSA (or transfer the shares in kind back in at the value on that date).
It does sound like one should be ready with non-registered CASH to buy the spinco's from the registered accounts. They may be a good buy ... but these are likely the HOOPS that will have to be navigated I suppose.
But overall, if the whole thing increases overall value, I suppose the taxation issues are a nice problem to have.