Ann: PRU: Perseus acquires 15.03% interest in Orecorp, page-28

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nordesmic

4,284 Posts.

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28/11/23

21:17

Post #: 71155459
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Originally posted by grunyans ↑

The way I see this playing out is the following but I could be wrong…

* The scheme gets pulled asap and ORR and PRU will engage in discussions
* Due to the PRU Sissingue mine (247koz) only having three years left, they need a replacement
* The Mayas Sand Gold Project in Sudan was earmarked to replace the above however the FID is on hold due to country conflict.
* I don’t believe PRU were initially interested in ORR but due to the Sudan developments, it has had to pivot and look at alternative methods. ( Hence late to the party )
* The ORR ounces and project will be up and running just as Sissinque is winding down - Replacement ounces
* The 19.9% stake in ORR at 52.5 will form the basis of the takeover and they will then use a 63% premium ( using their Orca takeover metrics and approach )to buy ORR out for 80-95c in cash and PRU shares
* SVM are happy as they get a stake in a producing gold company in addition to doubling their money in 4 months

let’s see how close I get?

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I’m not sure the premium in the Orca deal can be applied here in the exact same fashion. Given a decent chunk of shareholders were likely to accept ~60c from Silvercorp, it seems unlikely Perseus is going to suddenly put in an offer so much higher. Part of the premium they have is their scrip is a far superior currency to Silvercorp scrip.

Still I don’t think Perseus are here to muck around over a few cents. 70c offer wouldn’t surprise me at all. It’s also good to have some heavy hitters on the register of Orecorp like Nick Giorgetta, who presumably can extract some more value for all.

ORR Price at posting: 46.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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