sh activity, page-15

Hi Reiner,

I do think its possible although I wouldn't be brave enough to say likely. Zijin want an overseas entity to hold its gold mining interests and if like happened with GDO the chinese add some fucding strength to "their" entity then NGF could have a market cap of 250-300m in a couple of months and launch a merger/bid on someone like FML.

Don't forget NGF is pretty much net debt free. Consider this scenario.

NGF currently has 850m shares at say 20c = A$170m market cap with Zijin owning close to 20%.
Zijin subscribes for new shares to get to 50% at 25cps so that's roughly 500m new shares at 25cps which raise A$125m.
Now NGF at 25cps is worth A$337.5m in mkt cap with Zijin owning a smidgen under 50% and more importantly NGF would have A$125 net cash. Then they look at FML with all its upside and make a scrip bid 1 for 3 valuing FML at about 8cps. Combined group then looks like the following:

Approx 2.75bln shares at 25cps = mkt cap A$687m (right now combined market value is c A$375m but add A$125m capital injection into NGF = A$500m). Combined comapny looks very attractive in terms of production of close to 350,000 with millions od oz's in reserve/resources, heaps of cashflow to explore and the prospect of a possible elephant at TI.

Now, it proably won't happen but its a scenario I could live with and I hold both companies. I think what the chinese did with GDO may become the model for gaining effective control of companies like NGF where they are clearly listed vehicles for longer term capital growth through acquisition.