@wassaThe way I see it Spec, GCY is a better than 90% chance of being swallowed up by WGX.
What we know so far...
* Peter Cook has publicly stated that Westgold will look at purchasing GCY again if the opportunity arises (GCY is asset rich, reserve poor and under a 100 million market cap). Sounds like the perfect opportunity!
* Westgold is reserve rich and processing infrastructure poor. Dalgaranga Processing plant can operate at up to 3.2mtpa if fed fresh oxide rock. This adds potentially 75% more to Westgold's processing profile at a cost of below 20% dilution.
* Gascoynes processing plant currently processes ore at a rate of $13 per ton cheaper than WGX's Murchison Processing Plants ( Last quarter WGX processing cost was $27 per ton whilst GCY was $14). At 3mtpa this is a saving annually of $39,000,000 per annum in processing costs.
I can see the potential for the combined WGX/GCY entity to package up the
Fortnum Processing Plant with Starlight UG, surrounding small open pits, Peak Hill, Glenburgh, Mt James and Mt Egerton.
They can either sell outright to a miner like GOR or DGO, or they could potentially sell of a portion of the project to a JV partner or just list as a spin off IPO.
This would recoup a large portion of the GCY investment whilst still boasting a production profile of up to 6mtpa with what looks like a more efficient wheel and spoke model with multiple mines feeding multiple processing plants.
If and when WGX purchase GCY, I will remain a holder of WGX. WGX has a great deal of upside if this obviously synergistic takeover eventuates.
(20min delay)