In reply to my previous post - yeah, I'm replying to myself - crazy eh?
On further reflection, I think the board believes they are making a strategic decision regarding the capital raising to Sprott clients at 25 cents, and it may turn out that way, certainly for the sophisticated and institutional investors of Sprott.
For small retail Aussie investors however, it's all about avoiding losses now, so IMHO you need to have an average below 30 cents, as a simple risk strategy. If that involves buying at the 25 cent offer, then so be it.
I've done some more research, and so here is how I believe it works.
All of the major gold companies that mine in Ghana, Mali and Burkina Faso, are listed or based in North America.
It is one of these companies that will make the takeover offer for WAF.
And Sprott is based in North America, with institutional clients invested in these large gold companies.
All of these companies have Sprott, and sophisticated and institutional investors of Sprott on their books.
So you get the drift now - right.
This funding option for Sprott, is just the first move in a game of Chess, and a lucrative one for Sprott, and for the eventual acquirer of WAF.
Sprott will be positioning their wealthiest clients into WAF at 25 cents, those same clients will also be positioned into the major North American gold company that will make the offer for WAF. This is how the game is played. Small retail investors, if lucky, are sometimes thrown some scraps, and are expected to be grateful for these.
In the last 50 years, 90% of the world's wealth has been concentrated into 3% of the population, this is just another technique for that transfer.
What do WAF get in return?
Well, they get Sprott's endorsement in North America, amongst institutional investors, and at various conventions and publications.
Sprott will also introduce WAF to companies who will make the takeover bids.
Folks - this is no more than quite simply a "Game of Thrones" amongst the majors.
So don't get caught with a loss. Make sure you have an average below 30 cents, and then sit and wait. You may not make much (and probably won't), but you shouldn't lose much either (if you are patient).
If the takeover offer involves scrip, then a lot of Aussie investors don't have accounts with North American brokers, and may sell on the news.
If I had to make a guess on time-frames, then I'd look at the annual reporting deadlines for North America and Australia.
Many North American gold companies report in April/May, so at that point they have a good idea what their profits are, and intentions are going to be for their coming financial year.
Combine this with Aussie tax loss selling in late June, when prices are often beaten down (with the excuse of tax loss selling), then I'd say a likely takeover offer will come next July, at about 35 cents.
For the next 6 to 9 months the price will be kept between 20 and 26 cents (after the capital raising), perhaps with one or two (very small) spikes in between.
Welcome back my friends - to the show that never ends.
Gw
WAF Price at posting:
29.5¢ Sentiment: Hold Disclosure: Held
(20min delay)
