I was lucky enough to have shares in VLA when it got acquired this year. Prior to the take over, the share price was getting hammered lower and lower over several months despite, great news and external parties taking large stakes. The share price went from $0.95 down to as low as $0.61. The take over offer was $1.75, which looked good compared to $0.65 when the offer was made, but poor compared to the $1.20 the share price had hit in the previous twelve months. Gold Road share price behaviour seems to be following a similar pattern, which makes me feel somewhat suspicious that the share price is being manipulated lower with a low ball offer in the wings.
Gold road enterprise value is currently at USD250 per reserve ounce compared to bigger miners which are at USD600 per reserve ounce (AFR Article today), GOR shareprice would have to increase 140% to come into line with USD600 per reserve ounce, which would value GOR at $1.60 per share. GOR is not a major or producing, so it clearly isn't an apples for apples comparison.
The gold price has come off 10% from its recent peak, while GOR has come off 22% from $0.82. Also, Goldfields paid $0.86 a share. AUD 15 million in additional project costs does not seem to justify the recent sell off.
The short term driver of the share price is likely to be the gold price, although I am concerned the price is being manipulated for take over purposes.
I am expressing my opinion and the above is not investment advice.
GOR Price at posting:
66.0¢ Sentiment: Buy Disclosure: Held
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