RE:RE:Mexican business unit sale. A few Questionsokgonow wrote: they just sold 3 mines
the equipment alone at the operating mine (take a look at the pictures on their website) would far be in excess o0f 5 million .... i bet the trucks alone are worth 5 mill nevermind the plant ...AR spent 1 billion to build a plant!!!
even a used plant the size i saw would cost 200?300Mill
check for yourself
I think all of us that are left holding the bag as AR shareholders are very underwhelmed by what the Mexican assets fetched, and I can't help but feel that they were too hasty in disposing of them, especially in light of the POG. I don't imagine there's much salvagable value for the mining infrastructure (leach pads, mills, etc) and the trucks, along with any other heavy duty equipment is likely being leased, so there's no value there. Losing all the optionality is tough, and forgiving all of the payout obligations that Ana Paula had (even if taken in shares) is perhaps hard to explain. They should have at least pushed for an NSR on Ana Paula and San Antonio given what they forgave. Anyway, I guess the silver (or gold) lining here is that they're now off the hook for the estimated US$25M in closure and reclamation costs associated with the Mexican operations, and can now focus fully on Florida Canyon. The fear though is that they're planning, if not finalizing, the sale of Florida Canyon as well, and given the disappointing amount that was received for the Mexican operations, we might not see more than the C$0.60/share that they originally suggested the Spinco to be worth DESPITE Alamos subscribing for US$.99/share, and the POG having gone up considerably since that original valuation was mentioned. I think we would have the right to vote on this sale though, as it is effectively what remains of the company, and it would be hard to imagine the institutional investors signing off on such a deal. Perhaps Alamos purchases the other 80.01% for somewhere near what they paid for the last subscription and then just hedges most of the production with gold forwards or swaps, as they did to eliminate much of the Argonaut hedges. Gold futures are in contango, so they could probably fetch an average gold price through LOM of ~US$2700/oz.