RE: Predicitions & Buyouts - nopooYour DeBeers plot seems logical, as far as DeBeers bringing Star on line in order to finance the less-economic JV pipes. Couple comments to that: Perhaps DeBeers is craftier than we are able to ponder, and Steinmetz and Duplessis are actually DeBeerian moles designed to sway things in DeBeers' favor. Think about it, why would a high-up geologist working for 10-15 years at the richest DeBeerian mine in S. Africa uproot his entire family and immigrate to the cold north just to work on a small,unproven pipe for a small junior company like Forest Gate? Does that make any sense to anyone? Just too fishy for my blood and I suspect he's got plans that stretch far beyond Forest Gate. Would Steinmetz risk going up against DeBeers by teaming up with a 'rival' like Shore Gold? Remember Chapter 6 in your book, and what happens when sight holders make Monty Charles mad? Things I think about with DeBeers as a next door neighbour.
However, I also realize that DeBeers has blown it so far with big Canadian diamond mines so far (ie.Ekati, Diavik). Either they have smartened up fast to the ways things are done in Canada, or they are still going to blow it with the Star kimberlite.
Also, I consider the situation with Aber. I don't know their numbers, as far as tonnage, grade and valuations go and what the resource calculates out to, but I suspect Star is in the ballpark with them. Aber sold out 60% of their stock at $23 or thereabouts, so's my understanding, and still retain 40% and are trading in the $40 range. If you have some hard numbers with regards to the economics of the Diavik mine, please post them. They have probably been posted before, but a review would be good right now. I'm bringing this up because your valuation of $218 with a buyout price around $20, as you calculate, still seems awefully low to me. I see how you came up with that number, and that's why I wonder what Aber's numbers were for comparison, because their 60% buyout price calculates much higher than the predictions you make for a Shore buyout.
One last question. Why do you think a bidding war is out?