Totally agree, both appear very undervalued fundamentally. Still struggling to see how this is considered a fair price though based purely on Assets.
If I wear my WGX hat I would love to see this deal get done. Wearing my GCY hat I believe this is miles off being a fair offer.
With price rises in the building sector, building a plant such as GCY's 3 year old plant now would cost far north of 100 million. Wayne was quick to mention the creditors circling GCY, yet if you look at it's balance sheet, it's 12.5 million net cash at present. Add in their 5 million dollar in the money hedge book, 1,186,000 in gold resource and 339,000 in gold reserve, this offer is actually not even close to covering current assets, even when subtracting their 50 million in non current liabilites.
Have a look at GCY's last few announcement's regarding the Glenburgh's resource extension, Hendricks shallow orebody intercepts and the Slyfox UG deposit. When these are added to their production profile along with Melville, GCY will be a 100,000 ounce per annum producer. When it is up and going, free cashflow per annum will be getting close to WGX's 100 million takeover offer. For FY21 GCY's FCF was 75 million!
Lets not forget their $160,000,000 in accumulated losses which will have tremendous value for WGX.
Back to the drawing board Cooky. As much as I would love to see a deal, there is near on zero chance this first offer will be successful.
WGX Price at posting:
$1.64 Sentiment: Buy Disclosure: Held
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