Snake got your tongues?
Where are all the downrampers now?
reopened at 3.3c to 2.0c, 28 July 2015 to 28 August 2015
now 2.6c
No change for 7 months!
Volume trading has been massive 1.3B shares traded since relisting, who are all these buyers?
Snake, "high risk" means it may or may not happen over 10% chance depending on the IOP and valuations then, its not a certainty.
The focus is this debt deal which reduces debt substantially, strengthens the balance sheet in direct proportion to the equity issued and reduces loan interest expenses on the expense ledger also. More importantly it removes the bond covenants as to breach and removes the death card permanently from the prospects as creditors take shares and want shares.
The AGO business will survive thereby, the real question as to what happens to the SP thereafter with extra equity issued. On fundamentals it shouldnt change much as the balance sheet improves but as we saw in MBN, a 22 bagger up occurred thereafter as the death card was wiped out.
I said long ago that a takeover of AGO would make sense from -
FMG - many synergies, WA based, friends with AF, rail nearby, cost effective, high debt v MC issues
MINRES - lost $50M on wasted $2B bid for consmin that was better but lost, showed interest in brownfield acquisitions, strong cahsflows
RIO- lost $2B on failed africa IO mines, CEO sacked, focus on WA, many synergies, needs to expand floor plate tenements, existing workforce at low cost, wanted acquisitions on greenfield sites though
If any bidder wants AGO they must bid between now and the EGM with an offer on the debt.
FMG MINRES RIO could all wipe the AGO debt with cash but FMG & MINRES would keep it a WA operation and FMG could share its rail and create shoots for AGO mines unlike MINRES or RIO.
To me a bid by FMG makes the most sense. But AGO can survive and prosper on its own with the support of its bondholders especially now.
This debt deal is bullish for AGO as it shakes out any buyers/bidders or it shores up its balance sheet by agreement and solidifies its business operations to be more profitable with less debt and bondholders as shareholders.
Whilst bondholders dont want shares normally at 2.6c they could easily make a large fortune on those shares if AGO shares went up in value. The dilution is offset by the lower debt and death card removal.
AGO is growing revenues, profit producing with rising cash at bank...so far so good.
