re: Ann: GML: CTO: Citigold Takeover Bid for ... Elude: I'm not shocked and it's not necessarily a bad move. If Gateway have good (Alkane Reseources like) prospects which they can't finance though to a resource estimate this takeover will be good for shareholders in both companies.
Holding CTO is a bit like having a call option on gold and this acquisition fits nicely with that strategy. The takeover also partly mitigates the single mine risk associated with a current CTO investment.
From a distance I could look at the facts and reach an opposite conclusion to your own. That is, IF CTO were not bullish about achieving their production targets they would not (or at least should not) be going down this path.
At the time of the last share placement I knew that CTO were on the look out for junior purchases and even went as far as discussing some possibilities with them on the phone. We discussed narrow vein mining in Victoria, the price differential between CTO, ALK (my other hold) and others. We noted that many small juniors are tightly held to the point that takeover offers unlikely to succeed unless a significant premium is paid.
From Gateway's perspective, a takeover by a mid tier operator is superior to a similar offer by a major (less dilutive and with a superior upside potential).
Cheers
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Not investment advice
re: Ann: GML: CTO: Citigold Takeover Bid for ... Elude: I'm not...
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