Just some quick calculations ....
296,566,718 - Titan shares outstanding
488,947,392 - shares ot be issued to CGLD shareholders 3.1 X (166,876,328 - 9,151,363 shares Titan already holds)
21,875,000 - shares to be issued at A$0.16 for A$3.5 million
8,876,013 - transaction fee to be paid to Bacchus Capital Advisers
816,265,123 shares issued and outstanding if the Titan offer is successful
On a fully diluted basis, Titan could have to issue up to 566,814,339 shares to Core Gold security
holders. Notice that Titan does not include the shares to be issued to Bacchus Capital partners,
(noted in the Pro Forma statements at the back of the Titan Circular)
On a fully diluted basis Titan could have as much as 894,132,070 shares outstanding.
( 885,256,057 + 8,876,013 )
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Now, let's be real generous with Titan's numbers, what would Titan's shares be worth if the hostile
takeover were ever successful :
The Titan offer is roughly A$0.55 per Core Gold share and is spuriously based on Titan’s last trading
price of A$0.18 ...
.... or using the AUD/CDN exchange rate of $0.91 X $A $0.55 = C$0.50 / share for each Core
Gold share
C$83,438,164 - ($0.50 X 166,876,328 CGLD shares O/S )
C$3,185,000 - (A$3.5 million financing X $0.91 exchange rate )
C$13,200,000 - (US$10 million debt facility X $1.32 exchange rate)
C$99,823,164 – Total "perceived" value of the Titan offer to Core Gold
C$99,823,164 / 816,265,123 shares issued and outstanding if the Titan offer is successful
Comes out to only C$0.121 per share of value for Core Gold assets post takeover with
all the new shares issued and outstanding.
Seeing as we would receive 3.1 shares, what Titan is offeing us is really only C$0.375 per share,
(on a fully diluted basis C$0.341 per share) as Titan's shares are basically worthless confetti paper,
with unknown environmental legacy costs at Tulin, and a highly suspect Vista Gold Plant valuation
due to the possible, probably nullification of the operating permits for the Vista asset.
Or, on a fully diluted basis
C$99,823,164 / 894,132,070 = $0.11 per share
There are at least three problems I see at the moment ....
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Problem 1.
The currency of this offer is in Titan Minerals shares. No one believes that the tangible assets of
Titan Minerals comes close to justifying an A$0.18 share price. See above calculations bringing
their net TANGIBLE asset value down closer to A$0.011 cents per share. In reality, Titan Minerals
will more or less just be Core Gold’s Ecuadorian assets upon completion of the takeover attempt.
I would tend to expect that Titan will divest of its Peruvian “assets” or just write them off, as they
have with most of their other supposed “assets” in the past couple of years.
See Titan MInerals Half Year Accounts
investi.com.au
Tit boks A$11,952,365 of "goodwill" in "intangible assets" in relation to the purchase of
Andina Resources in 2018. This is out of a total asset value of A$28,468,519.
Recent public documents reveal that their Vista Gold Plant operating permits are in jeopardy
of being nullified, so what value does that asset have ? And Titan has not made any public
disclosure regarding the legal status of the Vista Gold Plant permits.
Appears the only solid asset that Titan has is the 9,151,363 shares of Core Gold that Titan obtained
in a March 2019 private placement, but Titan had to borrow the US$3 million from a key backer of
Titan Minerals to pay for those shares. And Titan Minerals had to use the Core Gold shares as
collateral for that loan, a loan that has already had it's maturity date extended to (I believe)
December 20, 2019.
Titan currently has approx. 296 million shares outstanding ...... so giving them the benefit of the
doubt and using "tangible assets" of roughly (A$28,468,519 - A$11,952,365) A$16,516,154
Total liabilities are stated as A$13,259,851
A$16,516,154 - A$13,259,851 = A$3,256,303
296,566,718 shares issued and outstanding
A$3,256,303 / 296,566,718 = A$0.011 per share
And Titan is currently halted with an artificially propped up share price of A$0.18
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Problem 2.
Titan MInerals would still have to deal with Core Gold's legacy debts. Not included in the above
calculation. And Titan fails to mention anything about how they will deal with Core Gold's legacy
debts, What they have raised and intend to borrow, does not cover most of Core's debts, And Titan
needed money to pay for the US$3 million loan used to purcahse the 9,151,363 Core Gold share
it received in the March 2019 private placement
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Problem 3.
Most Non-Canadian residents will not even receive Titan shares, Titan will take up all those shares,
and attempt to sell those new Titan share holdings into the Australian Stock Exchange on a best
efforts basis, and the Non-Resident Canadian shareholders will then receive the cash of whatever
Titan was able to dump those shares at into ASX, could be as low as … well you use your own
imagination … and who would be on the bid side ? A$0.10 … A$0.08 … ?? Unless they have
buyers lined up for block purchases at some sort of discount to the prevailing market price at
the time.
Just some things to consider ...... while we all wait for news from Core Gold
One would have thought that Core Gold shareholders would have been provided some comments
from our company regarding the rumours that started floating in public last Friday ?
It is not like they haven't had the whole weekend to coble together some sort of lame
excuse for the actions of directors Gregg Sedun and Javier Reyes ....
Personally, if the rumours are true about a $0.33 cash offer and some paper, and a $10 million
financing, I'd take the cash and paper in a heart beat, if we were still going to have the opportunity
to particpate in the upside of any exploration on our other projects, if, according to the rumours,
the other offer is taking all of Dynasty Goldfields ..... remains to be seen ....
........just my humble opinions ..........
DO NOT TENDER TO THE TITAN MINERALS OFFER
GLTA
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