Ann: GGB: Off-Market Takeover - Close of Offer , page-5

re: Ann: GGB: Off-Market Takeover - Close of ... I dont know whether to be wildly excited or nervous about this announcement. It appears that they have done what I hoped, in taking equity in a new company that will list on the ASX in due course. Obviously, this will take longer than a straight takeover but its a solution to a knotty problem.

If we assume that the market close price of GGG on friday (21p approx) determines the project value, perhaps it will work like this: 21p = 32.5c * 165m - $20m cash = $33m for 50% so EV for project is about $66m at present.

The new company could list with either more shares to GGG in return for its cash, or do a new raising to new shareholders. Either way, the control in my view is out of the hands of AZX and we will finally see the exploration team consolidated and this squabbling ended.

Perhaps it could work as follows using a 40c IPO price:

AZX holding 84m shares
GGG holding 84m shares
new investors / GGG cash injection $20m = 50m shares

issued capital 218m shares @ 40c = mkt cap $87m

using EV/oz that works out to be about $25/oz for a junior with a large resource and a big drill program which is cheap as chips. I dont think it would be long before it had a takeover bid on the table.

In any case hats off to AZX and GGG management for doing the right thing and doing a deal to resolve the deadlock. I hope it leads to bridges being built from both sides and an end to the acrimony.

Here's hoping both stocks have the deserved big rerating. Both should be double the current price.