The boards of Exterra and Anova were interconnected by a common director, I believe. The amalgamation, IMHO, occurred because it would have been difficult for Exterra to raise or borrow money to mine Second Fortune (SF). The amalgamation certainly did not cause SF to fail. SF is what it was two years ago, a highly risky small mine, that now turns out to have half the grade and twice the ore dilution planned, with the same fixed milling and trucking cost, all of which makes it pretty worthless in my opinion.
A different story with Anova: Around $40MM market cap with a 1 million oz (resources) project, and $8MM in cash pre-amalgamation (if I remember correctly). All the money, in addition to $3MM in a bridging loan that they now can’t repay, has been spent on SF. Both SF and Big Springs were pledged as security, in my opinion, because nobody would have lent money with SF as security alone (this is assuming all actions so far were taken in good faith).
I myself sold a good part of my holding immediately after amalgamation, because I felt that based on all the information available, the risk had increased significantly and the money raised for Big Springs was now being spent on something totally unrelated, and of dubious value. Exterra holders, of course, were afforded the opportunity to vote on the merger, and to have the fairness and equitability assessed in court. Had the same been afforded to Anova holders, I am fairly confident that the ‘deal’ would not have proceeded (I think there is a week point in the system here?). I understand that former Exterra Holders feel the pain of losing money just like Anova holders, but pre-amalgamation Anova (without Exterra) was worth a lot more than Exterra in my opinion.
All IMHO & DYOR
Good luck to all remaining holders
p.s. glad to be out
AWV Price at posting:
1.7¢ Sentiment: Sell Disclosure: Not Held
