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Gold/Mining/Energy : ARP - V Argentina Gold
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To: marcos who wrote (1548)12/9/1998 5:31:00 PM
From: John Fairchild  Read Replies (1) of 3282
 
The angle I like here is that drill results will be out probably this week. We now have a safety net in the ABX offer, so mediocre results will not kill us but more high grade holes will send ARP on it's way to higher ground. I believe that Barrick has recognized hole 90 as defining what the properties potential is even though many of the alleged experts appeared to want to see the limits of the Amable zone by other drill holes. Obviously ARP wants to show the world what they have by way of analyst inspection of the property. Barrick is now under the gun to try and make an offer they feel stands a chance of acceptance but fails. Now a clear signal is sent to the investment community that Veladero is a mine. With ARP declining the offer of $5.50 we immediately see that $5.50 is minimum value based on the drill results so far. So what is Barrick's strategy now? Did they low ball the first offer with the intent that a second higher offer will represent an ultimate high end value for the property. Quoting an offer that represents a premium to previous trading days seems simplistic when everyone recognizes that trading range at this stage is more dependant on hole by hole results.

I guess the point I am trying to make here is that it is too soon to put a price tag on ARP. The value could be significantly higher than Barrick is offering. That recognition could come within days or within weeks. But I think we now know what the minimum value is because of Barrick's offer.

John
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