Post by
explorer49 on Jan 24, 2016 8:07am
The Village Idiot Strikes Again!
The Village Idiot (aka Kaiser) strikes again. "The downside risk for Peregrine Diamonds is the need to raise and spend another $20-$30 million to deliver a feasibility study for Chidliak, and the lengthy permitting timeline Canada's environmental agencies inflict on diamond projects located in the Arctic. In the current bear market climate, which is also bad for the diamond sector, Spec Value Hunters should assume another 100% dilution either through a 50% farmout that funds the project through production, or further equity financing. "A bigger company like Dominion Diamonds could "purchase" half the company for $40-$60 million with a hostile paper bid in the $0.20-$0.30 range to become partners with the Friedlands in what would become a private company. Such a move is justifiable based simply on the $50 million plus in exploration costs already sunk into Chidliak, but will likely wait for delivery of a PEA in Q2 of 2016. While such an outcome limits the potential for a five bagger or better, the prospect of a near term double or triple arising from a hostile bidder exploiting the growing market suspicion of a Friedland privatization agenda is a good reason to discount the risk of further downside below $0.10." The Idiot is starting to sound a lot like James. Wake up and smell the coffee! Neither Dominion (which has +100 unexplored kimberlites at Ekati and wants to buy Rio's 60% in Diavik) nor anyone else is going to make a hostile bid for PGD. Shareholders are in the for long haul which is going to cost a Billion dollars. The downside risk below 10c is certain!
Comment by
Kidlapik on Jan 24, 2016 9:44am
I don't think you could get 50% of the company for 0.20-0.30 through a hostile bid. I would not tender my shares for that.