From a cash perspective, I agree this would be a good fit and would likely see a re-rate for both companies once the financing is finalized. The big issue here is the accumulated losses. I am 99% sure that Anteo couldn't use the accumulated losses as they are not in the same field as MHM. MHM have roughly $25M worth of accumulated losses which would be a major loss for shareholders compared to finding a mining company to merge with where this could be exploited.
In my opinion, and should my understanding above be correct, BSR would be a much better prospect to merge with. They are a gold mining company based in Senegal and have just had their mining licence approved. They require minimal cash to start mining and have a great tenement to explore on top of roughly 5 year mine life (both feasibility and scoping study).
They would then be able to exploit the 25M accumulated losses meaning they will be paying no tax for a long time to come. They do own 70% of the tenement at the moment so the accumulated losses could result in it becoming easier to buying the outstanding 30% should they prove up a bigger resource.
Had they had no AL I would prefer the merger with ADO.
For the record I am a holder of both ADO & MHM. I have held BSR in the past but currently do not hold.
MHM Price at posting:
3.5¢ Sentiment: None Disclosure: Held
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