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Gold/Mining/Energy : Precious and Base Metal Investing

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To: marcos who wrote (970)	12/19/2001 5:22:31 PM
From: russwinter	Read Replies (2) of 39344

<what extent RCF will rape the minority shareholders > You're kidding yourself about this deal my friend. Here's the facts: This offer brings the shares outstanding up to about 115.6 million. The market cap (at the 5 cents paid by the pirates) will be US 3.7 million. The negative working capital and debt structure will reduced from the $1,265,000 PP proceeds to about US$3 million (a lot of payables were handled in October when they screwed the vendors) if my calc is right. Therefore the enterprise value will be US$ 6.7 million. I know mining assets are cheap, but doesn't that strike you as highway robbery for a million ounce deposit (cash cost 165-170) with an operating facility that has been put through the startup paces (Jim Steele to issue report on this aspect)? And for sake of argument, let's just call Marathon a freebie. And objectively, shouldn't a US$2.9m loan to a "syndicate" (in the Sicilian sense of the word) be an obstacle that should be overcome by any management worth it's salt. This is not THAT big a loan against this kind of property. And, I find it odd that they hired Haywood for a "financial solution", and then Haywood's advisor John Hicks becomes the new GEO CEO and this travesty gets put together. Was a real effort made to find a third party consolidation that might at least pay a legitimate price to rid this RCF paper or even just make the quarterly payments? I simply can't accept that a 39.7 million share PP at 5 cents, a 10% net project cash flow royalty, a 40% IRR, and who knows what else, is the legitimate financial solution that these pirates could come up with. They must think the GEO shareholders just fell of the cabbage truck. I'm outraged.

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