Ann: White Rock to Acquire AuStar Gold, page-15

I can only speak on behalf of myself and haven't had a detailed look at Austar but my opinion is the following...

1) Going Concerns: Austar had serious going concerns with not enough cash to even keep running for another quarter according to their latest quarterly so why not wait till Austar enters administration and pick up the assets for cheap instead of paying a ridiculous premium.

Instead of doing a PLS and reaping the rewards like they did, we are paying a premium of 56% for a company that is about to go under. Unless I've had one too many drinks tonight and reading this all wrong, I just can't comprehend that and understand how that is in the best interests of WRM holders.

Yes they have $500k that will be recorded in the current quarter but that is still not enough to get them out of trouble. Yes, the company claims that production and recoveries will increase but once again, I don't see how they could have survived another quarter.

8.7 Estimated quarters of funding available 0.17
They only have $334k left and burnt $2,015,000 in the last quarter.


2) The premium: 56% premium based on the last 1 month weighted average. You would think there is multiple bidders to pay that much.
NST acquired/merged SAR with a zero premium and we are paying a 56% premium for a loss making 'producer' with only $334k in the bank.

Based on the 53,667,358 AuStar Gold Shares, the deal will be worth $22,604,691.1896 in equity and that is excluding the options so potentially more. Does WRM receive assets that will increase the market capitalisation by that same amount?

3) Relationships: Matt Gill is the Managing Director and CEO of White Rock Minerals and also a Non Executive Director of AuStar Gold. Make of that what you will.

4) The market sums up exactly what I think of this deal.

AuStar is 15.25% up while WRM is down 6.96% percent. So a wonderful deal for Austar and if I was a holder of Austar I would be over the moon but as I am a holder of WRM, I will wonder what this management team is/was thinking.

In my opinion, WRM would be better off if they have never gone after this merger/acquisition.

5) In my opinion, WRM would be better off completing a DFS on Mt Carrington and progressing it to a FID and then securing a JV or raising the funds themselves to bring Mt Carrington to production.

Pre tax cashflow of $126M at only $2300/oz.
82% IRR.
Pre production capital cost of $39M and payback within 14 months and all of those figures excludes the silver resource.

Mt Carrington could then use the profits to explore its Alaskan projects more aggressively.

ALL IMO. DYOR