Post by
123buyholdhope on Dec 09, 2017 1:18pm
FG Long Term - Nevada Short
CBGDF continues its frustrating grind towards establishing what value its holdings (soon to be two separate companies) are actually worth. Re., French Guyana I don’t feel that the CBGDF 45% is going to be bought by anyone outside of Nordgold. Unfortunately, NG’s offer will be minimal compared to the amount of gold that they will procure through the Montagne d’Or deposit, never mind factoring in the Paul Isnard project's future potential.
Notice that Barrick has already invested large scale in FG exploration projects through Reunion Gold and Newmont, likewise, via the French miner CME. Why would the big boys now contemplate partnering for only 45% with a Russian gold miner who has shown no stomach for partners of any shape (100% would be a different proposition)? IMHO there will be no go ahead permit for Montagne d’Or until the outcome of the ESIA presentation, analysis, debate, decision, challenges, further decision, (court challenges?) etc. Yes, as I have said in the past, I think the mine will be built but we are talking a lot longer than most think. That is why NG talks about a 2022 first pour! That is why the big boys have invested in longer term exploration projects in FG that can happily search while the mine permitting battle wages. Why worry about buying 45% of an on hold mine when much less money allows majors to potentially achieve a similar objective.
Likewise, NG has no interest in further delineating more P&P or resource ozs at Montagne d’Or. They have plenty of oz already to eventually mine (more exploration once mine is up and running). Further any more gold delineation would only benefit CBGDF in terms of increasing the cost of a NG buyout offer, so NG won’t do this (unless they are interested in selling out themselves). CBGDF can only hope that greater pit economic analysis increases their oz value.
CBGDF is ‘trapped’ as a minority owner who needs permission to do any further pit/claims exploration/delineation (even if they had the money). I hope that Giustra and shareholders do not succumb to NGs probable coming offer. I think this will be below US $1 a share. However, holding the stock will I believe see the CBGDF SP rise well above such a buyout offer as the catalysts arrive e.g., mine permit, mine construction, 1st pour, delineation of further ozs, gold price increase (joint mine buyout offer?), indication that the CBGDF will pay a divvy based on ¼ profits (cash cow). Hopefully, CBGDF will take financing if it enables them to maintain a % well above the approx. 13% they are reduced to if NG solely builds out the mine spending up to $400 mill.
CBGDF requires patience from those who have a long term perspective. IMHO even buying in at the present price range will see a significant increase over the next 3 years well beyond any US US 20 – 40 cent share profit that a NG offer might bring. However, I have a different shorter term view re., Allegiant. CBGDF has already spent 7 years at Paul Isnard and if they do hold on they will see IMHO significant gains in the next 3 years. Yet, nobody wants this sort of timeline demonstrated in Nevada. My unrealized (dream) hope was that they sold out their Nevada claims at spinout with the tight share count to a major prepared to jump for below $100 mill on the Eastside potential, Bolo possibility and a top explorer/exploration companies 10+ other claims (i.e., Andy Wallace/Cordex).
We know Nevada is not FG! No legal wrangles. No Russian partner controlling exploration, building, selling etc. $4 mill + raised in the Allegiant bank. Majors in the area. Eastside already approx. 720,000 oz resource + 270,000 historical + according to Giustra approx. 700,000 ozs also identified outside the pit area. Bolo assays coming in by Jan 2018.
We are not drilling 12 claims (with any impact) with $4 mill so the focus is already more Eastside drilling with Bolo probably to follow. Giustra (and his major shareholders) like most of us wants a pay day (CBGDF would unfortunately be a giveaway). Wallace is not getting any younger so he wants royalty deal(s) signed. All might see Eastside as a saleable project if they can get this to at least a 3 mill + resource (Giustra said in a presentation in 2015 he did not want an Eastside JV). If Bolo is only average it might be included with Eastside as an offer. However, if Bolo shows real promise it would be a separate entity for a spinoff company to yet again build upon. The Jan., 2018 financing may get Allegiant to the point where its’ drill results in the next 12 months produce that buyout offer long term shareholders have been waiting for (not another 3-5 year JV).
As usual just my biased opinion as a long term holder - comments welcome