Yes I totally agree with you. The offer assumes that DCN shareholders can't do the calculation and throwing it some scaremongering by the BOD into the mix, they are hoping that the majority of the shareholders will take up the offer.
If my calculation of $70-76M is right in term of the positive cashflow just on the milling/processing operations and the TO cost is $111M, then effectively GMD is effectively buying all of the other DCN assets(milling plant and gold in the ground) for just $41-35M. Is that reasonable to DCN shareholders? I don't think so.
Effectively if the TO is successful, they can retire all of the GMD shares allocated to DCN shareholders with just effectively $41-$35M of net cash. The money that they had raised in the $100M would be sufficient to do just that over the course of 1.5years and there will be some money left while effectively still minimising GMD share dilution.
DCN Price at posting:
10.5¢ Sentiment: Hold Disclosure: Held
