ARBITRAGE OPPORTUNITY: PREMIER GOLD / EQUINOX / I-80For anybody looking for a quick 7% return, Premier Gold looks to offer with relatively low risk, in my view.
Here's the pitch/math:
Equinox announced their plan to acquire Premier back in December. The deal was just finalized and shares are expected to de-list/relist/start trading in the next day or two (Google press release)
For each share of Premier (PG CN or PIRGF US) held you get .1967 shares of Equinox and .4 shares of their US spin-off called I-80.
Using the US$ price of each:
.1967 EQX = $1.70
.4 shares of I-80 at offering price of C$ 2.60 (US$2.08) = US$.83...deal was already done so this is set.
Total: $2.53
PIRGF price: $2.36
Difference: 7.2%
Note that I-80 could, in theory, move higher once trading begins. Then again it could trade lower, but sentiment does seem less bad vs. when deal was done and assets sound like they're high quality.
EQX short interest went down this week for the first time since they announced the acquisition but is still very high at 9.8mn shares (US$84.7mn). Some speculating that people were short to hedge any downside until deal was completed and will cover once Premier shares are added and trading resumes. Also, from a risk perspective, EQX's profile looks much better with Canadian HardRock asset that was prevously held by Premier/Centerra and is now EQX and Orion.
Obviously anything can happen but seems like an interesting trade.
Good luck!