In respect of the AIM market it is a fickle, very fickle, it is market maker controlled for a start, it is known for massive percentage gains and losses, investor sentiment can turn either way in a flash. It will be a exciting ride for Crusader shareholders, totally unlike the ASX, news really drives share prices on AIM.
Take the recent drop in the Stratex share price it has fallen from 2.3p to 1.15p on tiny volumes. The current market cap is below cash + equity stakes in a number of listed companies which could be worth 1p a share (£4.5m) more alone, even the new CEO commented on the low share price ahead of the acquisition. In my view Stratex shares are a gift at current levels.
To answer the question above, there are very few 'quality' gold stocks on AIM, few with a proven resource as high as 2.7m oz let alone with a clear road a to production. IF the new company is promoted correctly I can see significant interest for the stock, the current low valuations of both companies offer UK institutional and new retail investors the chance to get in near bottom.
The chart I posted a few weeks ago shows how 'the market' likes companies closing in on production, I expect to see the new entity gain from this up cycle. It seems management have a plan to drive a re-rate as well!
Anyone who has read the Scheme Implementation Document will be aware that both companies are currently gagged from speaking in detail about the new company's intentions, there is a strict timeline on this, more will certainly come out in due course.
I am wondering if there will be any asset sales, project disposals or new JV's by either Crusader or Stratex post merger. Why focus on Borborema when Juruena seems closer to production? How much could Posse be sold for? Will Stratex sell their 30% stake in Thani-Stratex, it could fetch $4m-$5m on IPO. Will Stratex sell or dispose of their minority interest projects?
It seems pretty clear both companies stock prices are in limbo until more news is release, with Stratex currently valued below cash I have been buying and see a much improved picture by Q4.
Expand
