Hi Kelp, I understand your arguments that the merger will...

Hi Kelp, I understand your arguments that the merger will improve BMO`s position with higher upside potential going forward.

Again, let me explain why I am not overly excited:

BMO shareholders will only hold 4.4 percent in the new Gold One company. At current sp, Aflease valued at 110 Rand (= AUD 0.16) in exchange for one share in Gold One. BMO valued at AUD 0.008 requires 20 shares for one share in Gold One, which is also valed at AUD 0.16. Therefore, abitrage does not make sense, which meaning there is no significant advantage for BMO shareholders compared to Aflease shareholders.

The new company, Gold One, has no current cash flow from production and insufficient financial resources requires a capital raising latest in June 2009, only halt a year from now. As you said, there is no problem at all, someone will be excited in the 15moz resource base. Maybe, at present there is no proof on that item. In current capital markets funding is very limited, even for existing producers with huge resources.

If you say BMO/Gold One is a speculative buy, it is fine with me. However, I dont see the company not as a no-brainer.

Cheers
Malom