Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : TVX Gold -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (800)	3/29/2001 9:35:53 PM
From: baystock	Read Replies (2) \| Respond to of 905

I appreciate your efforts to think things thru. But I have a problem with the statement below: <<The following would have to occur for the dooms day scenario to occur. The company would make no attempt to retire the note through an asset sale, development venture in Greece, or would fail to carry out any aspect of the note buy back at all, or just allowed the thinly traded stub to trade for a buck as we approached maturity. In that climate of extreme neglect, we would see conversion to stock at these absurd prices, and there would be 227 million new shares issued (263 million total). But my threshold enterprise value would still be the same: 225 million.>> I disagree with you assertion that TVX at $1 per share is absurdly low. The market cap including debt would be around $260 million. This is a high market cap for a company producing only 250K oz/yr, especially from mines that are jointly owned with others. Yes, I realize that they have promising deposits in Greece. But these are undeveloped properties in one of the most socialist countries in the world and there is some kind of litigation pending. And there are the usual risks associated with bringing a mine into production. Even if the common share price were to drop to zero the market cap would be still around $225 million (I have ignored the net working capital of $46 million). I agree with you that this is the end game that is playing out over the next 12 months. I suppose Batista was waiting for the POG to spike and bail the company out of this problem. Hopefully there is now competent management in place that is working overtime to avoid the scenario of the common shareholders getting wiped out, by disposing of enough assets to pay of the bond and yet retain enough assets that there is still substantial value left in the company.