Okay, I'll try and put some numbers in. I'd rather be conservative than
optimistic. It usually feels better when your expectations are exceeded.
Let's assume 200,000,000 ozs of gold. Let's assume 10,000,000 proven.
Let's assume the purchaser is willing to pay $25/proven oz. and
$5/indicated oz. Let's assume the POG stays at $300 or lower to year-end
so those price/oz figures stay low.
$25 x 10,000,000 = $250,000,000
$5 x 190,000,000 = $950,000,000
So that would equal $1,200,000,000. Divide by 100,000,000 shares = $12
$12 divided by 84% ownership = $10 approx.
Goodwill isn't part of a mining deal. You pay that for brand recognition
or a client base. If I was GE I would try to get a %-based future
production royalty on the 190,000,000 indicated. If the ozs are there
$5/oz is a
gift. It's understandable they have to be proven up first and that will
take time. But get some future value for them and any further discovered
reserves and maybe gear the royalty to the price of gold as well. This
royalty would be worth a few bucks to the share price as well.
So overall, I see a price somewhere between $10 and $20 in a complete
takeover. If there were 200,000,000 proven ozs then I can see $50/share,
but that isn't the case.
Feel free to tear my logic apart...
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