RZZ/GZZ action - From Calandra yesterday:
Heads-up on Abitibi Royalties: You might think 15,000 shares of trading in an obscure Canada mining equity gets barely a sniff of interest from snobby Quebec investors. Mais non. Ca va pas.
Serial CEO Glenn J. Mullan's Abitibi Royalties (TSX:V.RZZ, Stock Forum) is getting attention today Tuesday. The Osisko joint venture partner at the Malartic hails from the Abitibi Greenstone belt in Val-d’Or, Quebec. Abitibi holds two pieces of property claims at Canada’s largest gold mine: Canadian Malartic Mine, which is the work of Osisko Mining.
Mr. Mullan tells me the takeover headlines swirling around Osisko have prompted greater exposure of Abitibi's net smelter royalty and 30 percent working interest at Malartic.
Abitibi shares have doubled in mere days because of that greater attention and a PDF file making the rounds. There is no other news out there from Mr. Mullan's company.
I have owned RZZ since the July 2011 creation of Abitibi from a three-way distribution of Golden Valley Mines (TSX:V.GZZ, Stock Forum). The three-way spin was Canada's first equity distribution to do a triplet. The other two companies were a uranium developer and a nickel property -- both of which I still own as KZZ and VZZ. [Mr. Mullan of Montreal and Vancouver is a TCR family member.]
Here is something straight out of that investor presentation circulating in Quebec and Ontario: Abitibi says, "Hypothetical Profit Allocated to RZZ: $63,000,000 Hypothetical Value* per RZZ share: $6.85."
RZZ, or Abitibi, has 10 million shares outstanding, so it is worth about $10 million right now. About 30,000 RZZ shares in Canada have changed hands this month of April. This is more than any month, I believe, since January 2014.
The company could start receiving a Malartic royalty as soon as this year of 2014, I understand. Whether it distributes anything to shareholders remains to be seen.
Golden Valley Mines owns about two-thirds of Abitibi. So GZZ will receive royalties as well via its stake holding.
My royalty meter will be gauging RZZ, along with my other royalty-related holdings: Eurasian Minerals (TSX:V.EMX, Stock Forum) and TCR 8 member Angkor Gold (TSX:V.ANK, Stock Forum).
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