Hi George,
I would have to do a lot of research to get the numbers right. HGC, has issued numerous options and warrants over the years to finance it's exploration activities. Everyone, please correct me if/when I'm wrong.
Miramar's market cap is around:
(60m shares + 3m "special warrants" + 3m "options and warrants") x C$1.40 C$/MAE share = C$92m
(Many of the "options and warrants" are way out of the money, but that doesn't change things much.)
So, for C$92m you get around C$10m in cash + 50% of Hope Bay + the 130,000 oz/yr Yellowknife operation. (MAE also owns a power plant.)
Now, the tough part is figuring out how many HGC shares there are:
From the 3rd quarter report, they had 148m shares (up from 102m a year ago). In addition, from the 2000 annual report, it looks like there are around 10m warrants which are relevant (this is a real rough approximation since there are so many issues at so many prices with so many maturation dates) plus around 5m stock options. (We don't know how many might have been issued in late 2001.) So let's estimate around 163m share equivalents.
So the price paid for HGC would be = C$1.40 C$/MAE share x .26 MAE shares / HGC share x 163m shares = C$59m.
Therefore, for C$59m you get very little cash + 50% of Hope Bay + various exploration properties which I don't know how to value.
From this morning's trading, however, it looks like they got the valuation right. Neither stock has reacted much.
Anyone else have any comments about the merger?
Best regards, John. |
