What is Snowline worth to a major gold company See below from the CEO Forum
@DreadnoughtKinross will add $ 1.00 to the offer for GBR if it exceeds 8.5 million Oz. so it's presumed that they were valuing Dixie at just under that. Worked out to $ 211 per Oz. Yes some were complaining about $ 29 but shareholders were later told that Kinross was the only bidder that came close to offering that much. There was no MRE and the Oz. were not easy to define even after 300,000 meters of drilling. Kinross is completing an additional 200,000 meters of drilling to complete the MRE with a target of year end. We will probably complete 10,000 meters on Valley this year, maybe a bit more weather permitting but we'll have a better idea of the size of the Valley deposit this year than GBR did after 300,000 meters of drilling on Dixie, that's the difference between these deposits. Might take 50,000 meters to find the limits of this deposit and define every Oz. but I doubt we'll be around that long. Whoever said 7,000,000 Oz. probably means as defined by this years drilling but would probably also say that there's blue sky to triple that amount with more drilling next year.
@k.money.money You have to remember who owns this as well. If you think Keith Neumeyer and Crescat Capital are going to let one of the best gold discoveries in North American history be sold at a discount you're mistaken. This is a generational property that would be close to if not a flagship mine for any gold producer. I would think there will be a bidding war for this and due to nature of the ore body I would think it gets taken out at a premium to GB
@Dreadnought The question is who is going to take us over and what are they going to be willing to pay. Back to the Kinross/GBR deal for a sec. When Kinross bought GBR it was trading at $ 7.50 had a MC of $ 9 Billion and 30 Million Oz. in reserves so the market was valuing those Oz. at $ 300. so that was the value of K's currency at the time. By paying $ 211 an Oz. for GBR they were willing to pay 70 % of the value of their current Oz.s to buy more Oz.'s. The other majors were not willing to go that high and maybe only wanted to pay 50 % of the then value of their currencies or even less. Someone was saying he thought the majors might be unwilling to launch takeovers because their currencies, share values, were currently too weak while I say nonsense because the target Co.'s are also depressed so it evens out. High tides/ Low tides and all that. So let's look at the currencies of the majors ex. Kinross who has enough going on already and therefore is an unlikely buyer. Newmont is trading at $ 476 per Oz. while Barrick is at $ 521 per Oz. and Agnico is $ 566 at Oz. Any one of those could pay us $ 100 per Oz. @ 20,000,000 Oz. and those Oz. would be hugely accretive. Agnico has the best leverage so adding our 20,000,000 Oz. less the purchase price of $ 2 Billion should add as much as $ 9 Billion to it's MC. That's a net increase of 37 % to it's MC. Now I realize that valuations aren't based solely on Oz. but also on infrastructure, cash flow, etc. but the point is still valid that the Majors have very high valuations and currencies relative to the current price of gold and the price of gold looks like it has nowhere to go but up and so will their currencies and so will our 20 million Oz. We can also see from the dialogue going on here that there are other large deposits available but they all have really big warts and even the most recent takeover of GBR may prove to be at a price that's even higher than the $ 211 per Oz.because we still don't know how many Oz. are actually being bought for that $ 1.9 Billion. So someone please explain to me , other than cego, how a deposit as large and as clean and simple as this won't be of interest to every major and why it wouldn't fetch at least $ 100 per Oz. and maybe much much more. I think it's a lay down for $ 100 an Oz. and I'd be unhappy at that, $150 is my target for a $ 3 Billion takeout.