High River Gold Mines Ltd HRIVF

NORD keeps going down HRG Up, Why?

[WolfgangE]

I keep tracking Nordgold (NORD) on the London Stock Exchange (LSE).  It started at 7.80 US $ back on Jan 21 (I think) and is now only 6.75 for a loss of 13.5% so far.  So what is Mordy gong to do about it?  Meanwhile HRG has been gong up from about 1.22 to 1.36 for a gain of 10%.

I think Mordy will have to do some major marketing here and realistically speaking he cannot do it without also showing (for a  change) HRG ina favourable light since it represents close to 50% of NORD.

At present HRG witha  cap of 1.14 B (840 M shares)  had  a net profit of around 160 M $ in 2011 by producing 374 Koz of gold equivalent.

NORD on the other hand with a cap of 2.47 B $US and 359 M shares outstanding had  a net profit of approx. 210 M $ by producing 750 Koz of gold equivalent.  

Thus depending on how one looks at it the valuation for HRG should be at least 50% og NORD  but likely substantially more due to the superior profitability of HRG.  In addition HRG sits on around 200 M $ in cash and cash equivalent.  So the cap should be somewhere between 50 and 75 % of NORD, say 65%, thus a cap of 1.61, giving it a per share valuation of at least 1.91 and more if the cash held by HRG is factored in.

What do You think?

My 2 cents worth,  Wolf E

[1marketmaker]

Add Bissa Wolfman.  Nord is in the dog house because other properties and junk compared to HRG.  HRG should be a 3 billion company NOW and Prognoz makes it $4.  Add discounted future cash flow and this goes back to 3.6 billion.  Therefore that's $4 per share.  Why would I want to exchange my HRG shares for NORD. Not happening.   This game is being played out

[1marketmaker]

Once again iPhone editing on SH doesn't allow me to easily edit text so it's a little garbled.  What I was trying to say was that I do not need my investment in HRG quickly returned and I suspect Nord/Severstal/Mordy would like some share value turned into cash.  So knowing that, I believe they have a choice.  Start being FAIR to those of us who have been here supporting

[missouriminer]

As nice as it is watching our company's SP increasing I do not put it past these boys driving Nord's SP down just to make a low ball offer seem palatable......

[jmr9757]

Fortunately, Nord's problems don't really matter to the long-standing a value seeking HRG shareholders.   None of us are going to accept owning NORD, so we're looking for cash.   A  bid by Nord is an Insider bid and will require majority of minority sharehulder approval AND a formal valuation report, which will have to be highlighted in the bid circular sent to

[1marketmaker]

Exactly the reason that there will be no bid, but a share swap.  They get around it.  Nevertheless, there is no way I want anything to do with Nord shares unless it value HRG at $3.X billion, and I could care less what Nord is at.

[jmr9757]

I'm actually pretty sure they don't get around it with a share swap either. The share swap would actually be more onerous as they would need a valuation of Nord shares as well (can't imagine it would hold up if they tried to apply the liquid market exemption). Couldn't agrre more re not wanting to have anything to do with Nord shares. Period.

[tryte]

That would make sense, but then why are they letting HRG price go up?   There really seems to be quite a bit of upward pressure. I don't want to call anything but we could see our 52 week high again soon if this trend continues.