Gold Price, page-284

I'm a very recent arrival on DEG's share register, so I apologise if what I'm theorising here is a past debate that has been put to bed.

DEG has a market cap of $2.54B
GOR has a market cap of $1.97B
GOR owns 19.97% of DEG

Larger Australian and International gold companies will have looked at DEG's resource with some envy, but the price is a bit steep for all but the largest pockets.

Then there is GOR's blocking stake which would mean taking out GOR too. Big money!

I have know idea of the working relationship between DEG and GOR management is and would welcome to pointed in the right direction on this. But with DEG currently researching its options on how to finance its mine, then surely a merger between DEG and GOR would be a consideration

Looking at GOR (which I also have a holding), they are made up of:

• a 19.99% share of DEG. 0.1999 * $2.54B = $0.51B
• half of the operating Gruyere mine shared with Goldfields
• and not much else

This values the half share of Gruyere at $1.97B - $$0.51B = $1.46B

I imagine that Gold Fields would be willing cash buyer of the other 50% of Gruyere at around $1.46B

A merger between DEG and GOR together with the sale of 50% of Gruyere to Goldfields would:

• create at $2.54B + $1.97B - $1.46B = $3.05B company
• release $1.46B in cash which would cover the cost of mine development and then some.

It all makes sense if DEG and GOR are friends, else forget it.