Post by
templetooth2 on Nov 13, 2023 7:48pm
History and Repetition
Today, Calibre swung a very good deal, buying $40 million (cash deal) worth of Marathon Gold and buying the rest of the company for Cdn $345 million of paper. Marathon has a similar resource to Skeena, about 4 million oz. MOZ is supposed to come online at 195,000 annual ounces for 12 years, starting early '25. So about half the annual rate of SKE, and probably about a year earlier if you make allowance for SKE being unlikely to hit its mid-2025 start-up.
The more I weigh the aspects of this deal, the better I admire Calibre. They are using paper whose value is mostly based on an asset in Nicaragua, to acquire something of value in a good jurisdiction. This is remarkably akin to trading a yellow paper clip for a house in small town Saskatchewan. Or was it a pink paper clip?
I have no horse in this race. I am one of those who will NEVER own anything Nicaraguan, period. I briefly owned some Marathon, I think, back in 2022 but thank stars, didn't lose very much. As much as I've complained about the reverse-Midas touch that Coles has exhibited when it comes to raising money, Matt (Charlie) Manson at Marathon was absolutely murder when it came to destroying shareholder value.
I still maintain that Skeena should put the company on the auction block rather than trust management to swing a financing deal that doesn't obliterate existing shareholders. If the company tries to swing a $200 million bot deal next spring, it's gonna get Marathon-kind-of-ugly, as in the toxic financing that led to today's take-under.