Furbag, I agree on the sentiments above and once the two companies merge they will have a market cap of around 900M (200 and 700). The upside here is that independent analysis believed ORR should have projected MC between 600-800 depending on the financing of the project. The financing issue is now removed and SVN believe they can complete this cheaper using a staged approach but using existing cash funds. SVN is also sitting at a near on 5 year low due to market conditions but they are still operating as per their guidance and have zero debt, cash in bank and replacing all ore that they have mined. When the takeover goes through, the share price will be around 4 dollars per share but think it has the ability to run through to $12+ once the mine is up and running (MC 2.7Billion).
I was listening to Rick Rule recently who spoke glowingly about the approach and management skills of SVN Chairman Rui Feng which provided me with more confidence that this is the right company to take over ORR and develop this orebody. If this was taken over by a larger company (Anglogold) then the upside in share price is reduced as the orebody would not be a company changer.
Personally I think now is the right time to buy as the ORR price could shift quite quickly on the back of the SVN price, court approvals, arbitrage, financing announcement etc. People like Nick Georgetta do not make this deal if they do not believe there is upside here.
Finally, 71% of ORR was held by the top 20, plus SVN own 16% - I think that's the reason for the lack of interaction on HC.
I like them and will buy more.
ORR Price at posting:
48.5¢ Sentiment: Buy Disclosure: Held
