TVX Gold Message Board - Msg: 15613276

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Gold/Mining/Energy : TVX Gold

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To: LLCF who wrote (834)	4/4/2001 1:27:44 PM
From: russwinter	Read Replies (2) of 905

That seems to be an accurate assessment in the very short run. This is not a company that is unable to pay it bills and is not without considerable resources to solve the issue. But, time is of the essence. I don't think they can (takes time for deals to close) count on this big noteholder to just accommodate them. They need to sell some assets fairly soon to enable the whole convert to be paid off at par in March, 2002 if necessary. They should also be sopping up whatever they can in the open "retail" market. The fact that they've just sat on a normal course bid for over a year angers me. On the point of what to sell, I was looking over some NDY presentations from last year, and noted where they suggested interest in "greater involvement" in Latin America. They never pursued the initial game plan with TVX to expand there. I don't know if this means they will just go after some brownfields exploration deposit, or (more likely) take the rest of TVX's holdings. So NDY's interest would seem to be the remaining 50% and to end their rather worthless "partnership" with TVX. TVX would have enough to clean up the converts and end up with a flat balance sheet and Hellas. Valuing deposits: at that point we could see this progress a couple ways. Route 1 is to just sit on Hellas and wait for the right price. This seems to be the preferred route of juniors with desirable deposits. The problem is that the stock market values such assets at nearly zero and investors are left with ridiculous stock prices. Nobody seems to be able to crawl out of that hole. A similar situation is ELD which has half of a so-so working mine and a couple advancing eight million ounce deposits in Turkey that has an attractive 140-150 cost structure. It's not as advanced permit wise as Hellas, but the market cap of ELD is only US 22 million, add 13 million for net debt after working cap = only US 35 million enterprise value. From this, we can see how the market might also be valuing Hellas even with it's lower cost structure. The question becomes at what point does the considerable gap between private and public value get closed? I think the answer to that is a JV, or some kind of carried to production interest with a major. Even better would be a sale. Business as usual (praying for higher POG) won't work. In fact I'm amazed that there aren't more "value" vultures going after these uncontrolled shareholder situations. I suspect TVX may be one.

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