RH,
Even taking $5.00/s and $2.90/wt as AEM did would deserve the congrats, in view of the $4.11 (some 3.42 USD/s?). Bet that the $5 deal with G was not a simple deal. It would probably has something else attached (could be payback for past favour, or for some future consideration). Hence, the total value per share AEM tendered should be worth more than $5.00. Clever AEM!
If I were Dave, I would structure the sale of Probe as follows:
- Spin off Borden Gold as a subsidiary of PRB
- Grow Borden Gold resource to something sizable, e.g. 8-10Moz (currently it has ~8Moz counting the lower grade (<1gpt which requires POG >1300/oz). With some more drilling in the high grade zones including the wedge, etc. an additional of 2Moz high grade would be within reach.
- List Borden Gold, if desirable (should be able to get a listing for this subsidiary with its resources and some cash given by PRB). Once listed Boren Gold can raise money on its own to support its activities.
- Distribute Borden Gold shares to PRB shareholders (PRB retains a fair chunk of it)
- Actively seeking a buyer for Borden Gold (to monetize PRB Borden Gold holding), or just let Borden Gold run its course.
In this scheme, PRB shareholders still have the RoF assets, some cash in treasury, and some land parcels in the Kapuskasing District: East Limb, and lands outside Borden Gold property, and Borden Gold holding. There is no need to do a listing the New Probe (with all kinds of potential issues (see pages 49-50 of Info Circular) as in the current deal with G. It would be the same Old Probe with Borden Gold spun off.
Note: Even without the G deal, AEM would be expected to exercise over 5M wts (@2.10/wt before May?) putting ~$11M in PRB Treasury. In April $4M royalty is due. In other words, PRB is flush with cash (some $30M plus $15M coming in about 2 months = $45M) to carry out additional exploration to increase the resource, hence it's kind of difficult to understand why Dave and the BoD jumped in head first for the G deal which is a bad one given the current situation.
Just my speculation.
goldhunter
