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Gold/Mining/Energy : Precious and Base Metal Investing

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To: Kaena™ who wrote (2219)	3/7/2002 5:20:44 PM
From: russwinter	Read Replies (2) of 39344

As I understand your question, you are asking how the remaining arbitrage works? Based on the the closing prices of both stocks here is the spread as I see it. You can plug in the GLG and loonie price as it changes : Take 4.61 for GLG X 1.55 shares = 7.15, do the currency conversion, right now 1.582 times= 11.31. The "exploration" shares are a bit of a guess as I'm not sure anyone knows much about the "early stage Nicaraguan" assets. We do know that the e company will have $1.50 Cdn in the till, and be worth a few centavos more for the "two percent NSR outside the Marlin area". Suffice to say that a cashed up Randy Reifel exploration company will probably trade north of net net (cash only) status. I'll say conservatively at 1.75? Add that to the 11.31= 13.06. The companies indicate that the merger should be complete by May 15th, and importantly you could do a tax free exchange to the GLG shares and that's a consideration for those who just want to rotate into a good mid tier name. I really wouldn't see the point in selling GLG and putting into to say TVX, KGC or AEM. Today's FGX close was 12.45, so if the stock trades flat there is another 61 cents to gain over the next two months. I haven't sold yet mainly because I'm not short of cash and see no "got to have" buys at this instant. I have plenty of juniors and did lighten up some when POG hit 300. I sold some remaining BAY at 3.35 today. My Dec/Jan energy picks are running wild now, so nothing to buy there. Message 17140045 I'm neutral (fine company, but not undervalued) on GLG and don't intend to hold it. This is just a reserve and beats a money market return, plus I have some 4.80 stock I picked up last April that needs to go long term cap gain. If I had to lean one way in the short run, I'd guess POG firms back up, and GLG does seem to enjoy a good trading correlation to gold. I would anticipate the 61 cent arbitrage spread narrows over the next several weeks and GLG firms some. Odds are we should scalp a little more.

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