I can't see WGX seeking out a merger with GCY, but for argument's sake let's say it happens.
Comparing the two on Enterprise value would be the fairest way to calculate a merger.
I have estimated that WGX Sept Q profit will be $12,500,000 and GCY loss will be $10,000,000.
WGX MC = $388,000,000
WGX cash as of Sept Q = $194,000,000
WGX EV = $194,000,000
GCY MC = $130,000,000
GCY cash as of Sept Q = $21,000,000
GCY EV = $109,000,000
Basically 2 to 1 sound's reasonable for GCY however WGX would rightly assume that the true value of their company is not being accurately reflected in their current MC.
IMO WGX looks very cheap when compared to GCY and most other Aussie miners.
WGX Merger, page-2
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