Fiore Gold Ltd. FIOGF

Contact Management - Spinoff Golden Eagle !

[blackgold14]

In a recent video interview with Tim, he made it quite clear that the market is assigning virtually zero value to the Golden Eagle Project which has a resource of 2 million ounces of gold. He noted that comparable companies with such a resource are trading at a market cap of $300 million.  Not sure whether the $300 million is US or Canadian dollars.  Let’s be conservative and say that it’s Canadian dollars.  Since it appears that the holders of the 23 million warrants exercisable at and above $1.70 per share did not exercise the warrants on or before the expiry date of September 26, 2020, the company has a total of about 98 million shares outstanding right now.  I say “appears” because the company is still showing the warrants outstanding under the Investors section of its website.  So the value of the Golden Eagle project alone is well over $3 per share (Canadian) today.      
 
In the video, there was talk of the various alternatives to deal with Golden Eagle.  The complication is that Hecla property adjoins the company's property.  The edge of the pit, not the resource, goes onto the Hecla property where they have drilled and found substantial gold there - over 1 million ounces.  A JV between the two companies has been discussed or an outright sale of one company's property to the other.  

The best way for Fiore to unlock this value is NOT a sale of the property to Hecla.  Fiore already has enough cash (US$23 million at last report) and the market will not move the share price substantially if the company gets a wack of cash.  While a large cash payment would certainly help in building the company's cash reserve which will be needed if it wants to acquire a 50,000 ounce producer within the next two years, shareholders want more short-term realizable returns.  

Buying Hecla's property would be a huge mistake.  It would take a lot of cash and may require the issuance of Fiore shares - more dilution.  The development of Golden Eagle is a long-term project - a lot longer than Gold Rock which is slated to reach production in 2023.  The market wouldn't get too excited about a project that may take 5-10 years to reach production.  

The best way for Fiore to create shareholder value NOW is to spinoff the project into a new public company.  Current shareholders would then get shares in a new public company devoted exclusively to developing the project.   To truly create shareholder value, current shareholders should receive shares on a 1 for 1 basis (1 share of new public company for each Fiore share held) or 1 for 2 basis.  Anything beyond 1 for 2 is not creating substantial shareholder value. The new public company, not Fiore, should be the one to pursue the combination of both properties.  Combining the properties of Hecla and Fiore would create one of the largest undeveloped gold resources in North America - now that would excite long-term investors.
 
If you agree with my position, please contact the company and urge them to do the right thing – to unlock the value of the Golden Eagle project – to do so by doing a spinoff the right way ( 1 for 1 or 2 for 1 at the most) which would result in current shareholders owning a share position in a new public company. 
 
Considering the value of the existing mining operations and the future potential of Gold Rock to increase production and cash flow, along with the value of Golden Eagle, the current market capitalization of Fiore is simply ridiculous.   The company is clearly a takeover candidate.  Management better act fast to unlock value – otherwise an opportunistic individual or company with deep pockets will make a less than desirable takeover offer – basically a steal – i.e. offer a 50% premium to the current share price and have unsophisticated dumb azz shareholders agree to be bought out, instead of getting a fair, reasonable offer which would be over $500 million or $5 per share TODAY.