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Gold/Mining/Energy : Newstrike Capital

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From: james flannigan	7/31/2013 7:45:22 AM
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Is Newstrike in play In a recent Wall Street Journal write up a headline stated that" Newstrike Capital Explores a sale".To write up that headline would suggest that the writer has picked up information on an interest by another company.Alamos gold CEO stated on BNNTV that the company was on the hunt for new target companies after its bid for a company failed and was taken over by Hecla Mining for around $700 million.This left a gap in the money Alamos wanted to spend to increase its reserves. Alamos is very well in the knowledge of Mexico properties.Newstrike is being touted as a very rich quick capital pay back deposit.Its high grade breccia core has about 1.5 million ounce just under 4gt.This ore is likely profitable even in $600 to $700 spot gold. So doing the math even in the current spot gold of $1350 Ana Paula is a cash printing press in production.With about 1/3rd of world wide gold production now uneconomic any buyer of Newstrike would find its self in a very rare situation of having a rock solid moat around its investment. It is a given that gold can not fall to the Ana Paula threshold of $600 or the entire gold industry would be bankrupt as no production world wide could be mined now in $600 gold. Then to top off this case Ana Paula has a gold miners dream deposit. Its not refractory ore and its at the surface.Its not on the side of a mountain its flat making mining easy and this deposit a must have for any aggressive gold mining company from Barrick, to Gold Corp and all the way down the ladder to Osisko or Alamos. The recent bump up off the bottom of the spot price of gold will get M&A now well under way smoking by the end of this year. On the list of JRs I would say NES is at the top of must have deposits.I doubt Newstrike largest share holder Lucas Lundin ( 40% owner ) would not even be open to an offer under $5 as he bought a large chunk of NES at $3.11 and then another 2 million block at $1.80. So I would expect any serious bid to come in at $5 with the buyer first talking to Lundin and setting a price with him that would be backed by him. Newstrike CEO Richard Whittle has made it clear that he will sell AP for the right price.With the stock price in the dumps as of late the action could heat up over the next few months. James

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