In the other thread it was pointed out that CGT will be raising $30m at 5c (at least according to AFR). This is a significant amount of capital given that they have $17m already in the bank and most would have thought they'd be cashed up until production is expected to start at Ballarat later this year.
This may be a long shot, but could CGT be looking to raise the capital to takeover GBM (Greater Bendigo Gold Mines)?
It would provide them with control over some significant Victorian Gold assets and two plants.
Further to this their Castlemaine deposit is closer to Bendigo than Ballarat (almost half the distance) so carting ore to Bendigo could provide significant cost savings if they are intending on bringing Casltemaine to production faster than otherwise expected (using this extra cash).
$10m - Buy GBM $10m - Develop Castlemaine ahead of schedule $10m - Working capital/contingency
I don't know, maybe I'm way off, but would be interested to hear what anyone else would expect they are going to do with $30m... surely that sort of capital points toward a purchase rather than just working capital...
CGT Price at posting:
52.0¢ Sentiment: Buy Disclosure: Held
