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02/06/21
13:34
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Originally posted by DigDagg:
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I was listening to Rick Rule this afternoon. There were two issues that I thought were relevant to shareholders of De Grey. The first was that it is every investors dream to invest in a nickle stock (five cents a share stock) that goes to over ten dollars a share and becomes a tier one miner with over $10 billion in recoverable resources. He likened it to a man's fantasy to sleep with every one of the Victoria's Secret models - totally unobtainable. Do we have news for him on that score. The second point was of more than academic interest. He said that he had been at a mining conference and the CEO of one of the gold majors came over to him and said that because the majors had not been active in exploration for the past 12 years they are going to have to buy explorers with good prospects "at prices so high that even you would laugh". De Grey may become a takeover target. I don't want it to be taken over, I would rather ride it to full production. But if it is taken over we can at least be assured that we will get a good price for our shares. Likely a very good price if more than one of the majors are bidding for it.
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Originally posted by DigDagg:
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A takeover at $10 billion is far too cheap. That is only $8 a share and I have to ask if that price would make Rick Rule laugh. That price would be fair if there were only 10,000,000 ounces of recoverable gold in the deposit. I think that we all know that there will be far more recoverable ounces in Hemi and the other intrusions at Diucon and Eagle alone. There is no allowance for the possibility of the discovery of another Hemi. Given what was said to Rick Rule I would expect nothing less than $20 a share for De Grey at this stage and probably higher if two or more majors are bidding against each other. Your first option was much better for an opening offer. It comes close to $4 per share special dividend plus still holding 50% of a fully funded and developed tier one producer with the 50% of the blue sky still in our pockets. I would start to be interested at that price but I suspect that it could go much higher than even that, especially if the price of gold is moving back above US$2,000 an ounce and showing every sign that it will be heading towards the US$3,000 an ounce price level. As the price of gold goes up more ounces become economic to recover and that increases the actual number of real ounces in the resource. I don't think that we want to leave money on the table for free. I like the way that the board are playing the MRE. They are not rushing it because if they release it with numbers that are too low the takeover bidding will be low balled by the majors. The majors are waiting for the MRE to come out and wisely so. That is because if they come in with an initial low number they will be blindsided by an MRE that shows they were trying to steal the company from the shareholders - and thus lose credibility as a serious buyer trying to deal genuinely with the owners. The board may well be dragging their feet on the MRE because the more that time passes the more that the resource increases in size owing to the very active drilling program. It is important to show that the resource is extended at depth as that will double the size of the resource without increasing the discoveries. So, lets see the results for more depth extensions in the MRE and hope that we get an announcement of the discovery of another intrusion system on the exploration tenement before the take over bidding commences.
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Would be great to see any of those scenarios you mentioned eventuating diggdagg, How many different companies could afford that though? who would be the most likely candidates to pony up $8- $20 a share?