Found the following note regarding a recent buyout:
"The most recent acquisition by Goldcorp has been that of the Cero Negro Project almost a year ago for close to $4 billion. This move proved to be quite profitable especially for investors as it meant that Goldcorp would have an increase in its net income, which has now grown to nearly $2 billion. This acquisition proved to be an instant success as resource levels for both gold and silver were increased to about 4 million ounces and 36 [million] ounces, respectively."
So close to $4B (actually $3.6B) for 4M oz Au and 36M oz Ag, or about 4.7M oz Au eq. Especially interesting since the estimates were much less when Goldcorp made the acquisition, although they probably had information or at least some idea that the reserves were larger than stated at the time ("Proven and probable reserves jumped from 2.1 million to 4.3 million ounces of gold and 20.5 million to 36.2 million ounces of silver.") If SFMI can provide drill results that indicate that estimates of over 4M oz are accurate (5-8M oz according to the Idaho Bureau of Mines), then if 2.5M oz Au eq (the original amount at the time of sale) goes for $3.6B, then what does over twice that (5-8M oz) go for? $7B? That's over $7 each for all the shares of SFMI and GHDC combined.
Of course, that's for proven reserves. It would take a lot of drilling to PROVE that kind of reserves. But how much drilling would it take to show that the kinds of grades (>2.5 oz/t) that WEM averaged for years of mining extend 2000 feet down to Sinker level? Or that those grades are encountered at a number of points all along the 1-2 mile extent of the major veins? Geos at the majors understand what those kinds of results would mean, and wouldn't need all the infill drilling necessary for a 43-101 resource calculation to understand what kind of resource WEM represents. So is $1, $2, or even $5 a share out of the question, even after only initial drilling results are in? I don't think so...
Original article (also follow the links in it): Goldcorp Likely to Swell Higher on Cero Negro Project This Year link
