The decision to invest in DEG and acquire DGO was the one of the better decisions of GOR, and makes up for horrible spending on exploration and corporate costs. I'm a happy shareholder in both GOR and DEG this week.
However, I can't believe more pressure is not put on GOR management by institutionals now to unlock value in this Company which has been underperforming for years.
A lot of people forget that the sale of 50% of Gruyere generated a huge tax payment which gave GOR franking credits. Because of the small dividend, the franking credits have continued to increase. If GOR was to sell nearly all of the stake in NST (or receive cash from someone like Agnico), then GOR could pay out a massive fully franked dividend. $92.7M franking credits is equivalent to a $309 million fully franked dividend.
If anyone has any interest in DEG, why would you not simply take out GOR. 50% holding in Gruyere, 17% in De Grey, ~20% in Yandal, tax benefits of franking credits, and synergies by getting rid of a whole lot of unneeded corporate costs.
If this NST/DEG transaction does come through, if management don't come out with a capital management plan that makes sense, shareholders should vote against all director elections and the remuneration report. Time to act in shareholders interest. They cannot blow this gain away like they have to date.
I'm hoping they are not looking to try and bid with someone like Agnico and get a minority interest in DEG (e.g. 30%) in exchange for current equity and a cash top-up, but that is what I think they will try.
GOR Price at posting:
$2.09 Sentiment: Hold Disclosure: Held
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