You would be correct that its too cheap if the 927k ounces were defined in the reserve category, but its only a resource so the offer seems realistic, even a bit generous since MGV shareholders would get a significant stake in the future upside of WGX and enable MGV shareholders to make good past losses on here. Only some unknown portion of the resource will get included in the reserve, and the acquirer is taking all of this risk.
Does anybody know if MGV's underground deposit is narrow vein - the grade looks good but there would be heavy dilution during mining of the ore grade if its narrow vein stuff.
I wonder what due diligence WGX has done for this proposal - could be another case of over-optimisim like DCN's takeover of another company for its reserves/resources.
GLA
loki (holding some WGX)
MGV Price at posting:
30.0¢ Sentiment: None Disclosure: Not Held
