Ann: Update on Westgold Intention to Make Takeover Bid, page-29

Hi Beserk,
whilst I can understand where you are coming from, though Dalgaranga alone has 6 years of production left, albeit, 3 full years at around 75k, then a further 35k for 3 years. (my calcs) The cash generation, after all costs (sustaining/non sus), admin, tax etc still ends up being well over 150% of GCY current E/V. Just take a look at the broker reports to get a feel for the numbers.

So.. whilst BDC does need a cheap plant, it would be highly inefficient to move Dalgaranga's. Now if GCY has only 1 year of gold left, different story.
FFRs single deposit, will add perhaps 80-120k, or... approx 2 years of mine life, with a bump in ounces for perhaps 2 years (i.e. 90 FY2023/24 then back to 75k for another 2 years, then lower etc.

I guess in the end, FFRs greediness and GCYs MD of... just wanting to get the deal done, has led to GCY being in a weaker position that it perhaps needed to be (but of course, that is hindsight, as WGX did not make an offer for GCY before the large fall in the share price, because they likely did not want to pay approx $220m ($0.60 share price with a 35% premium) for its assets, but... $100m (E/V $90m). that is a different matter.

The situation has worked out well for WGX. But... that is fair, they were patient.

I do very much agree with you about why the board should reject WGXs offer.

I do wonder... if perhaps GCY could have done a different deal with FFR (again with hindsight). Why not have simply paid for the gold deposit in shares (say... $15m worth), and then FFR would not have had to spin anything off... as they could have stayed the same company, without 1 decent grade deposit. I have no doubt the MD of FFR wanted a nice transition to GCYs larger entity, plus of course, they were getting a very generous offer. Perhaps that sort of option was looked at, but FFR said no, we want it all.

We know that Richard Hay was speaking to MGV from recent presentations (and others like Adaman in regards to Snake Well, but.. for whatever reason, nothing could be agreed to. So I still understand why GCY went for something. More gold is needed for the plant.

It almost feels like the ball is in FFRs court. If they still want a deal, they are the ones who have to renegotiate, otherwise.. they are likely to see the merger fail. In either case, I am not budging. After going through the EAR T/O, being patient is very important, but NO ADVICE being given!