underperforming ... takeover, page-2

yes sp - just imagine the and price without the kcn bid??? my guess, about 35c. also keep in mind, that it could be another 3 or 4 years, before there is a mine on the andean tenements. first of all, andean would have to prove up more ore, and then for funding purposes, that would have to be proven to a desired standard (jorc). then there are all the feasabiltiy studies - that they do these days - eg - scoping study, prefeasability study, bankable feasability study. then finance needs to be raised, then there is the construction period. an andean shareholder would have to think about all of this, and then think about the kcn offer. kcn offer a very attractive exposure to the immediate (well - almost immediate - there is a very small amount of hedging) increase in the gold price - good exploration potential, good chance of expansion to about 300,000 0z per annum.

watso has just had a look at andeans last quarterly - and what does he see - ah, as expected, when a company is having fun, the money just flows out. exploration expediture of just under $1m for the half year, and administration expenses of just over $1m. watso can see more issues, to raise money, over the next few before any mining takes place. from memory, watso seems to recall that kcn will spend us$9m on exploration this year - if watso is correct this amounts to about 12m australian dollars. from memory, andean shareholders would end up with about a 25% interest in kcn - which means that andean shareholder share of the exploration expenditure is about $3m dollars - and kcn's exploration is funded from cashflow. keep in mind, that kcn has the cashflow to fund this level of expenditure for the foreseeable future.

watso has not had a port for 2 weeks, and is enjoying writing this, as well as enjoying his port

watso is in two minds about the takeover. it could well be that kcn will aquire a andean, which in the end will not justify the price - but there is a chance, that there could be a lot more gold on the tenements!!!!?????

a cash bid will not happen - watso is certain of that. so what is the alternative - a bid from a canadian company, which sells at earning multiples higher than kcn - keeping in mind that north american gold mining companies sell at higher multiples than australian gold mining companies - in all fairness, that means that north american gold mining companies are over priced compared to their australian counterparts

anyway, to date, andean shareholders have not flocked to the offer - and watso does not particularly care. the andean shareprice is trading at a insignificant premium to the kcn offer, and will no doubt fall, when the kcn offer is closed.

watso extends congratulations to andean shareholders, who have accepted the bid - you have done well