This press release from Gold Reserves (GRZ) yesterday tells how Rusoro Mining (RML.v) made an offer for the company (well, they called it an "expression of interest"). RL responded to the GRZ press release with its own PR today (all very calm and relaxed sounding, too).
In it, GRZ said that RML.v offered an all-paper two-shares-of-RML-for-one-GRZ, so with RML currently at $0.80, this puts the takover number at $1.60 (if you use the Kinross/Aurelian school of logic, anyway). Not surprisingly, GRZ rejected the offer immediately, as it is as cheeky as it is lowball. But when I saw the PR, I had one of those "RUH ROH" moments, as it looks like there's an offer you can't refuse in the pipeline. In ballpark terms, it goes like this;
In it, GRZ said that RML.v offered an all-paper two-shares-of-RML-for-one-GRZ, so with RML currently at $0.80, this puts the takover number at $1.60 (if you use the Kinross/Aurelian school of logic, anyway). Not surprisingly, GRZ rejected the offer immediately, as it is as cheeky as it is lowball. But when I saw the PR, I had one of those "RUH ROH" moments, as it looks like there's an offer you can't refuse in the pipeline. In ballpark terms, it goes like this;
- RML makes a dirtball lowball offer (done)
- GRZ rejects the offer (done)
- RML says, "Well, I suppose we could go to three papers for one, but that's about it."
- GRZ then gets a visit from Venezuela's mining ministry (MIBAM) who explain that the Rusoro offer is one they can't refuse.
- GRZ is prised out of Brisas in much the same way Hecla was recently ousted from its Venezuelan operations, which were then coincidentally awarded to Rusoro.
In yesterday's PR, it does seem as though GRZ is willing to negotiate on this. CEO Belanger pointed out that GRZ has plenty of tangible and non-tangible assets, and although RML would be interested in the CAT diggers etc, what the Russians really want is the 10m oz Au and 1Bn lb copper sitting under Brisas (and right next door to Las Cristinas..ahem ahem). So I can easily see an endgame here, where GRZ spins out all assets and the large wodge of cash it has at bank, then hands over Brisas and hightails it out of the Imataca Forest.
But whatever happens, it's pretty clear that RML is the vehicle being used by Venezuela to get its hands on the yummy gold deposits in the area. As soon as KRY goes bankrupt, they're likely to get Las Cristinas, too (and don't expect an offer for Crystallex, ok? Serious companies tend to pay money for other serious companies, not empty shells pretending to be valuable).
But whatever happens, it's pretty clear that RML is the vehicle being used by Venezuela to get its hands on the yummy gold deposits in the area. As soon as KRY goes bankrupt, they're likely to get Las Cristinas, too (and don't expect an offer for Crystallex, ok? Serious companies tend to pay money for other serious companies, not empty shells pretending to be valuable).