WAF (ASX) WAF valuation

Originally posted by nordesmic ↑

eshmun, I have no idea if the quip about a takeover by B2 at 50 cents is true but sounds in the realms of possibility, and may have been a ‘fair’ offer (same as Macquarie price target, coincidence?).

Doing good feasibility, construction and drilling work is the way to improve value otherwise like you say. The team WAF have for construction seems pretty impressive given the construction manager (Matthew Wilcox) has built two mines in Burkina Faso for Nordgold in the last few years.

The change in substantial holder notices relate to Van Eck Gold INIVX fund and 1832 Asset Management. Van Eck are big holders and bought plenty more in the placement. 1832 sold 1.4M shares. I wonder if this is who Richard referred to as sellers. They are a Canadian fund and were also offloading at the lows in EAR from memory. Not sure how much their fund flows affects their selling in WAF. Given the lack of demand even if they have to sell a couple of million shares it can knock the share price.

I’ve always said I thought that B2 would be the one to make an offer but if the WAF share price keeps getting marked down then there other parties who could be interested (Nordgold for example).

While the gold price has gone up of late it has been a built of a stealth move and very few developers or exploration stocks have seen their share prices go up a lot, so WAF is not alone there. If there was sustained sentiment change from a gold price above $1350 for example then I think exploration stocks will start moving. The other possibility is that the market starts to get more excited about M&A based on these mega mergers and shortage of good projects, and starts to bid up good developers. It might only take an offer from a major for a peer in Africa for example to reset the market’s expectations about value in African gold stocks.

A lot of mentions of B2 as a target themselves following the Newmont/Goldcorp deal. While Fekola is getting to true Tier 1 status that a major would want, the rest of B2’s assets are only ok. 2 x ~200koz operations and 2x smaller operations in Nicaragua. Don’t think someone like Newcrest would want to buy them (NCM being mentioned as a company looking to do a deal with someone).

B2’s financials released last night show they will have net cash probably in the next 6 months. I was also interested that the budget they have for exploration in Burkina Faso is not exactly aggressive with only $3M for the next 12 months to expand Toega/Kiaka. Toega is not going to be a standalone project anytime soon with that little exploration and probably won’t even be upgraded to an indicated resource. B2 have no other development opportunities. They seem to be focussing on expanding Fekola as much as possible but I think they would want a development project as well.

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Hi Nord,

Thanks for your comments.

As far as the Canadians selling I thought they (1832) sold minimal shares compared to Van Eck and the Giant Squid who were buyers and are all stars and stripes players, headquartered in New York.

Weren't Sprott takers in the new capital raising as well? Sprott are Toronto, Canadian based.

If anything it's probably the Australians selling into US and Canadian hands. I heard a very reliable rumour that Argonaut went cold on WAF due to security concerns and Euroz, a big supporter of the stock, is reported to have had a bad year in 2018, reporting a loss of $2.1 million for the 6 months to Dec 2018.

https://www.businessnews.com.au/article/Euroz-reports-net-loss

WAF is quoted in the article about Euroz above.

Eshmun

No.	Vol.	Price($)
23	36001	$1.49

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36001

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No.	Vol.	Price($)
1	3670	1.360
1	4785	1.355
4	42574	1.350
2	26140	1.345
1	4986	1.340

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3670

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4986

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Price($)	Vol.	No.
1.370	46444	4
1.375	84504	4
1.380	66843	2
1.385	20785	3
1.390	109785	4

Price($)

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1.370

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1.375

84504

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109785

(20min delay)
Last $1.49		Change 0.013(0.84%)		Mkt cap ! $1.866B

Open	High	Low	Value	Volume
$1.51	$1.51	$1.49	$1.894M	1.263M

WAF valuation, page-165

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