Hi smooge,
thanks for posting this Crux Investor video interview with GLP yesterday (which was released to Crux Investor subscribers earlier in the week).
I would particularly like to discuss the comments made by GLP in this above interview, specifically:
1. "fast track a consolidation of the tenements there"
2. "potentially a spin out or merger" and
3. "bring together the oxide and hard rock resources".
Based on these latest comments from GLP, and as I have alluded to many times on this forum (as well as on the GSR and the GAL forums), I believe that as soon as the "official" assay results from the current respective drilling programs have been tabled at the end of this year, these serious "spin-off/merger" discussions will begin in earnest.
As opposed to a "merger", a "spin-off" is usually a way for the parent company to transfer "assets" into a new and often smaller entity.
However, in this case, such a "spin-off" would result in CNJ being only left holding its East Greenland "assets" i.e. the parent company (CNJ) would be left holding a far less valuable collection of "assets" (in the short term at least).
IMHO, I therefore believe that the current "spin-off" option/company that has been alluded to several times by CNJ and GSR in past announcements this year, as well as now by GLP personally (in this latest Crux Investor interview), is far more likely to be more of a "merger", and therefore, I will now refer to it as such for the rest of this post.
Before I continue, and just to be 100% clear, I see the major shareholders in this newly "merged" company being i.e. GAL, CNJ and GSR (with IGO also highly likely to be included).
I see this newly "merged" company being immediately worth far more as a thus new, separate and entirely independent entity i.e. it will immediately own all of the MTJV/Mt Thirsty/Norseman tenements, accordingly all of the "oxide and hard rock resources". As a result, it will be a conglomerate and as such a much larger and far more valuable business.
It goes without saying that existing GAL, CNJ and GSR shareholders should receive equivalent shares in this new company. Therefore, I only see major advantages for existing GAL, CNJ and GSR shareholders.
Therefore, I believe that potential GAL, CNJ and GSR investors will also soon begin to see this newly "merged" company as a potentially highly attractive investment opportunity. Not only because it will be holding a highly valuable and potentially massive oxide and hard rock resource, but also due the excellent standing of GAL (and possibly also IGO who are also highly likely to be included, or indeed end up being the major shareholder?).
Additionally, not only will this newly "merged" company have a number of highly credible "major" shareholders (and a very "tight" share register to boot?), and own a highly valuable and potentially massive oxide and hard rock resource, it will be run by a totally new and far more professional management team, which given recent events at CNJ and GSR, will certainly a attract a whole new type of investor base i.e. sophisticated and institutional investors, who suddenly see this newly "merged" company as a far safer bet, and thus a far more attractive investment opportunity.
I should also be noted, that this newly "merged" company would be a far larger entity i.e. it could easily have a market cap (MC) of well over A$500 million from day one, which would put it immediately in the All Ords Index (top 500 companies by MC), which will of course also attract sophisticated and institutional investors.
Over the coming weeks and months I look forward to hearing more from GAL, CNJ and GSR (and perhaps also from IGO?), about their plans for this newly "merged" company.
Finally, it goes without saying, that should CNJ release some very good "discovery" news out of East Greenland (Ryberg and/or Mestersvig), it could well be the East Greenland "assets" that end up being "spun-off" into an entirely new and completely separate and independent entity (listed on a northern European Stock Exchange?).
Best regards!
Mark
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