Oh the games that we play.The objective of both Rudi and Ken is to bring their respective project into production. Imagine that, in form, their goals are in alignment. In substance, methodology has yet to be defined. Both projects on a stand alone basis are capital intensive and, neither has proven that they are economically viable. Combined, the project stands an improved probability of being developed with the resolution of the MTT. Rudi knows this. Ken knows this. What you see in the press is nothing more than posturing and price discovery. Neither of these guys are "stoopid" and realize that the gold cycle has a beginning and an end. To the extent that the continue to fiddle and diddle, they will effectively erode the value of the eventual sale price to Newmont. If you were Newmont, you would not advance funds to purchase the combined entity at the end of the gold cycle knowing that you will need to hold during the down cycle. That said, time is of the essence. Rudi knows this, Ken knows this. You can rest assured that they regularly are in contact and, actually NEED each other. The likelihood of either project becoming a mine without the other is minimal because of cost (dilution).
Both Rudi and Ken realize that their ability to raise funds without a clear path to production is finite and can change abruptly. I'm sure that Ken thinks the all in price is $1B and Rudi thinks it is considerably less. In a merger, the best price is one where neither is happy. The goal here is to unlock the Bazillions in value of the combined properties and no one will remember the path. Having participated at the senior level in the due diligence in the acquisition of 30+ private companies, I can attest that the combining of companies is not a fluid process. The seller always, always, always believes that his company is more valuable that the offering price. The buyer, on the other hand, wants to only pay a fair price. Due diligence in the pursuit of an acquisition is expensive and is not initiated if the likelihood of success is low.
Are Rudi & Ken talking? Yep, you can be sure of that. Are they making progress? Who knows? Winter is here so to speak. Drills and activities coming to a halt. That will have more time to chat. The clock is ticking guys.