QuestEx Gold & Copper Ltd. QEXGF

Takeover

[jfan22]

After listening to Skeena's Walter Coles give this interview my thoughts on the deal have done a 180:

 https://www.kereport.com/2022/03/31/skeena-resources-recapping-the-acquisition-of-questex-gold-copper-ltd-and-concurrent-sale-of-questex-assets-to-newmont/

He basically lays out that he thinks someone will buy QEX's tooddogone properties for $10-20M off of Skeena and that KSP/Inel/Kingpin will be essentially free to Skeena after this deal. I don't believe Walter throws numbers like this out without testing the waters and entering into preliminary discussions to sell Sofia. At worst KSP/Kingpin bought for only $10M, which seems low considering Inel is about to have a maiden resource.

That means that QEX in it's current state is definitely worth north of $1.2/share and that there are currently buyers for all 3 major land packages that QEX owns (Castle package, Sofia package and KSP/Kingpin). QEX is not a distressed company with assets no one wants and this deal proves that there is significant interest. This deal should be a wake up call to the market that QEX has been seriously undervalued on the open market and without further exploration it is worth more than $48.6M to buyers.

If shareholders vote against this deal there should be opportunities to create significantly more value. The only way that wouldn't be true is if management is incompetent. If Skeena can turn a profit buying at $48.6M and selling the parts, our management should be able to push it above that market cap through exploration and asset sales.

Based on section 12 of shareholder rights summary, there needs to be 90% approval of a buyout. The big players in this deal own less than 50% so retail has the final say on this deal.

https://questex.ca/site/assets/files/4254/qex-shareholder-rights-summary.pdf

[jfan22]

After posting this I think it's worth saying that I own Skeena and QEX shares and have been a longtime supporter of both companies. I am comfortable owning more Skeena shares and taking profit on QEX but it is my personal opinion that this deal is not the best way to create shareholder value for QEX shareholders.

[jcw604]

If theacquiring Corporationelects to proceed byway of takeover bid but fails toacquire the requisite percentageofthesharestopermitacompulsoryacquisitionoftheminority,theCorporationmayelectto squeeze out the minority through an alternative statutory process if it acquires a certain threshold percentageoftheCorporationsissuedandoutstandingshares.

[jcw604]

Checked the squeeze process. They just need to hold a special meeting with 2/3 approval and because of this provision, the real requirement is only 2/3.