Share
1,473 Posts.
lightbulb Created with Sketch. 716
clock Created with Sketch. 05/11/21
06:58
Share
I’m still curious why WGX left it so late to throw their hat into the ring.
Originally posted by BerserkWarrior:
↑
Interesting and I think many valid takes on what has transpired. Shareholders have ample reason to feel disappointed with the drafting of the FFR agreement however I keep hearing the mantra that GCY 'overpaid' for FFR. That's one thing I disagree with. If you look at gold transactions over the last 18 months the purchase of FFR's proven resource (the Melville deposit), it's in line with averages paid. The problem was that GCY came to the game beaten down- they had few options other than to hang out the 'for sale' shingle which with hindsight they should have done or purchase higher grade feed for the Dalaranga mill which is the way things ended. On raw numbers the FFR transaction was fair, it played out less than optimally for GCY & favourably for FFR holders because they were paying for it with very cheap GCY script & had to give away 'too much' of the combined entity to get it away. Make no mistake GCY either needed the FFR transaction or a predator to take it out. As a standalone entity GCY will I think look to be in a solid position once the Melville ore is being processed. It's an asset, not a liability though the value of GCY's infrastructure has been diluted through using discounted GCY script for purchasing market value reserves. The strategic value of the mill isn't diminished to acquirers that still covet its capacity to process their own reserves that they can't otherwise process. Further, little or no mention is ever made in commentary of the substantial tax losses that GCY carries- these are large and worth their face value to an acquirer generating accounting profits.
Expand
Totally agree mate, the FFR deal was, at the time the best offer that GCY had in front of them. My thinking was that the board needed to find something better than what they had in front of them, just to stay alive at the current POG. I also think they new their was no way out of the deal, but were 100% committed to moving forward and having Melville running through their plant, with possibly (most likely) more and better grades coming with more exploration.
Originally posted by Killa68:
↑
Hi Coke, Just picking you up on 1 of your points above. GCY Board is at fault here as they did not leave room to extract themselves from the deal they signed with FFR. As it has transpired, WGX could have offered 1 for 1 and we could have all accepted, but the deal was never going to happen as GCY management signed a deal they should never have signed and locked us into it. Not sure how you work out that they are not "at fault" as it certainly appears they had no idea that they had signed such a deal. Otherwise why did they not tell the world when WGX made its first dance request that they cannot get out of the deal and cannot accept any deal without FFR's express consent. They have wasted a lot of people's time and cost all shareholders a lot of money. Obviously the major shareholders were also not aware of the restrictions on the signed deal. So i have a simple question for both ASIC and the ASX - was the market fully informed ?
Expand
I think it will be interesting in the board room in the coming months, and I’m sure we will see some interesting changes coming.
(20min delay)