Hey Joel, Honestly, as I have more time to ponder things, I just struggle to understand why WGX did not make this offer sooner.... They have had quite a bit of time since GCY made the offer to merge with FFR....? Sentiment was likely worse for GCY holders back then, but now... many will have already sold out, so who is WGX preaching too? The big holders?
Then... you have WGX buying 10% (something like that) in AME, yet... they have not done so in GCY, yet are making an actual T/O... WGX board has changed, so perhaps they are pivoting after thinking things through regarding AME (no plant...), compared to GCY plant but not great resources. The first thought is that WGX views plants as being more valued than resources, in the sense that more gold can be found, but... building another plant, is much less likely.
I am not overly worried about the resource update from yesterday, sure.. it was not a great result, but then, WGX has sort of been more open about their failings in regards to exploration. 8-10 years in reserves means they don't have to rush to find more (unlike say RRL, or... GCY for that matter).
The fact they have not been able to get some sort of agreement with a major holder (of GCY), to sign up to the current offer, paints a clear picture to me that this is just the first offer.
For something left of field, EMR might even have a tilt at GCY (they have $100m USD facility to use...).
Quite a strange feeling, have a holding in both companies. WGX is undervalued... GCY is more so... yet... combined, they will un-doutably, be worth more. Risk vs Reward.... GCY higher reward, greater risk, WGX lower upside, but... lower risk (particularly when looking at the E/V of WGX).
I think.... for this to get over the line.. the offer will need to be..... high $0.40s ($0.50 will get it). Though if the top 3 in GCY back the GCY MD... nothing will change. I do know that I am sitting still like a turtle. These things take time to really play out (in the past I have been too impatient... CDV darn it! etc).
The sector is bruised and battered... yet I feel its the best time to make these sort of moves.
WGX Price at posting:
$1.63 Sentiment: Hold Disclosure: Held
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