Savy MgmtConsider this. GCM had $300+M in their war chest prior to the Aris merger. They also stated months ago that, although they put out the bond ($360M) to finance the Guyana mine, they would use the funds at their discreation to return the best value. Those funds are with Aris now and GCM senior mgnt is on the Aris board. At the time I wondered why so much in bonds because they needed some $350M to develop the mine and GCM was generating $25M per Qtr. I figured they could have done nicely with a $200M bond issue. Those bonds were issued at 6.875% when interest rates around the world were extremely low. A bond issue now would be in the order of 10%+. Net result - cheap money!
We have said the float increased some 80% (75M to 135M) after the merger. Is it possible the new company will go on an aggressive share buy back program in the next few months?(say 10% of the float at a cost to them of $25M to $40M)? Maybe they have already started. Anyone know who bought the 2.9M shares on Friday?
I did say the stock has a potential to fall back to $2 to $2.40 range based on weaker earnings, higher interst rates and a lower gold price. I believe this is, for the most part, temporary. The world is awash in debt. Currencies will drop in value because governments keep printing money. Inflation is here to stay.
I am 70 and saw this in the 1970's. Gold went from $35 to $800 in roughly 10 yrs. (20X). The Dow/Jones was stagnet from 1965 at 1,100 till 1981 with a US debt to GDP ratio of less than 55%. Now it is north of 120% and I suspect it will get worse in the next few years. The US is in a tough spot. Their economy is 70% based on services (people's time). Both China and Japan hold $1T+ in US debt and total debt held outside the country is north of $7T. Countries are buying up gold at a record pace (2022 highest since 1967). Why? Because when the US $ rolls over, it will be hard!
We can all pick numbers for the price of gold but I do know the price tripled over a couple of years from 1972 to 1974 ($50 to $150) How do you feel about $5,000 gold by 2025 and what would that do for Aris? Keep the faith boys and girls. Comments?