I understand that IMG's offer is not the best but it seems reasonable to me in the circumstances. Nelligan will not see the light of day for around ten years if the deposit demonstrates feasibility. Nelligan currently contains 5.6M ounces of gold (2M indicated and 3.6M inferred) at an average grade of 0.85 g/t Au. pkoi a royalty company would pay to purchase a 1% royalty for approximately 17,000 ounces of gold to be received (representing 30% of the deposit based on the original claims having a 1% royalty) for the remainder, VSR has no royalty as long as he retains his 20% interest in the project (final non-dilutive interest according to the terms of the agreement). So, to summarize the short term value of VSR lies in a 1% royalty that it could sell to a royalty company... At what price... 17000 oz X $2600 Cdn = $44M to be received if Nelligan goes production within 10 years... As we must wait 10 years before possible production, this royalty is currently worth around 10% of its value if we discount it over time, i.e. $4.4M Cdn...
If a white knight shows up, what would his offer be? Would Pkoi offer more than what IMG is offering, knowing full well that it will have to wait 10-12 years before perhaps going into production??? That doesn't make sense!
IMG is the natural buyer of this deposit and of VSR. And VSR shareholders must understand that this offer is not final since IMG's stock may progress more quickly than that of VSR in the same 10-year period or pay the price of an interesting purchase offer, which would would result in a substantial increase in current supply.
Also, VSR shareholders must understand that if the company withdraws, it will have to pay a $2M penalty to IMG which I imagine would put the company at risk and would have a definite impact on the company's valuation. It's up to you to choose, but me and my friends will support IMG's offer because it is the best currently... and for the future.