ago - takeover target, page-5

AGO being a TO target is brought up on these threads every other month. AGO's small, multi deposit production strategy would be of little interest to the likes of RIO and BHP, and probably FMG, all of whom have major expansion plans of their own in the tens of millions. I could only see strategic rationale for them to move, such as keeping out competitors, rather than production volume or synergy benefits at this stage.

In the years ahead post merger AGO will be able to develop larger production centres, possibly with its own rail, which may be of interest, but that's many years away.

Market cap is important. Post merger, AGO's market cap will be $2.5b. Using a simple rule of thumb of a 40% takeover premium, any predator would need to stump up ~$3.5b to get a look in. Chinese appear most likely, but that's a lot of dough and they seem content taking stakes in large, long life assets at present.

AGO has gone for smaller scale, low capex mines to start with, unlike many of its peers, which is now generating plenty of cash and market value. Looking forward to AGO finding/developing its own larger, long life assets with this cash now coming in.