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.

Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: ItsAllCyclical who wrote (35755)	2/22/2006 9:06:24 AM
From: rnsmth	Respond to of 108650

DEZ trade just came across @ 4.99

To: ItsAllCyclical who wrote (35755)	2/22/2006 9:22:07 AM
From: hubris33	Read Replies (1) \| Respond to of 108650

Thanks IAC. Yes, DEZ is a great company and I'm sad to see them go. I think it will be interesting to see if the management team hangs around. If memory serves the head guy Humphrey was a Lt. at GG under McEwen. The rest of the team was old BGO/EGO guys. I guess if a guy sees himself as a builder of a company from scratch, perhaps he needs a new challenge once his latest company graduates from the junior status? Apparently with 1.2MM oz of proven shallow reserves, USGL could use a good 'startup' operations kind of guy. Hey, can you help me with a bit of personal ignorance? I am wondering why the 4% spread is typical? H3

To: ItsAllCyclical who wrote (35755)	2/22/2006 10:19:46 PM
From: hubris33	Read Replies (3) \| Respond to of 108650

AC - Hey just listened to the CC on the DEZ/AUY merger/acquisition and found a few things that were germane to our previous discussions, so I thought I might share them. 1. The deal values DEZ 'gold in the ground' at $100 per ounce! 2. DEZ brings fully 1/3 of the combined total of P&P reserves, 20% of combined M&I Resources and 50% of Inferred Resources. 3. DEZ brings about 22% of the combined 2006-projected Gold production and should rival Sao Francisco for the largest gold production site. DEZ's mine is likely the most complex of the combined mines as its rival in Oz produced is a heap leach operation. 4. Going forward to 2007 DEZ's mine is projected to be 33% of the combined company's gold production. 5. Price premium paid for DEZ is 21 to 29%. My initial perception is that DEZ BOD sold us out way to cheaply. Yes, I know DEZ faced CapEx issues and was a one trick pony. However, the level of sophistication, efficiency and ore potential far exceeds the price paid. I think shareholders got screwed. Only $100 per oz for gold in the ground, DEZ has rights to a trend 150 km long and has explored only 10% of it. [This is equivalent to DEZ owning the length of the Cortez Trend in NV and having only explored one or two of the properties of the Cortez Juniors.] Second I continue to like the easy, straightforward style of Bruce Humphrey. I cannot say I was enamored with Peter Marrone. Not as straightforward, but seems a bit like Telford who took over GG. If it’s out there he'll go after it and take it over. One of the 'great' ideas for achieving synergies between Brazilian mines is to rob the new trucks found at DEZ's mine and ship them off to another site. I guess DEZ's mine will be able to achieve the targeted 150% increase in production with old worn out equipment? THAT kind of mentality will kill morale at the acquired place faster than anything...been there, done that. That said, I do not know about the companies that AUY used in the presentation as 'peers' but AUY did not rule out further 'accretive' acquisitions, so I'd suspect that if any of these companies have significant Latin America/Brazilian operations they are a take-over target. Peers listed are: Canterra, Glamis, IAMGold, Meridian, Agnico. IMHO Marrone doesn't want to be the head of an Intermediate Gold Company, he wants to be the head of a Major! OK, so who has comments, ideas, points, information that can add to this discussion? How are others going to vote their DEZ shares? Are DEZ holders "selling on the news" or holding for additional value from AUY? For those considering selling, are cap gains taxes a factor in selling DEZ shares? Anyone selling their AUY shares? Anyone holding DEZ and shorting AUY? H3