It seems everyone is concentrating on the dividend, but the fact...

It seems everyone is concentrating on the dividend, but the fact is that the company is right at this point in time backed with 62c in cash if the deal goes ahead. This does not take into account future production at WD which is now generating over $5m a month with gold prices at $1,500 or the $30m of royalties we will start receiving shortly. Add to that Hazel Creek and other tenements.

Some are saying that there is a risk the deal fails due to the need for shareholder approval and IVA, Sin Tang, Soul's, etc may not approve. But there is also upside risk in the sense that any of these companies can voice their disapproval of the sale price by making their own bid for the shares. The fact that Xstrata are willing to pay this much for the asset is not a negative thing - if the deal does not go ahead, it is not like the assets disappear. EXS is now in play.

Once MA does the briefings and the market realises what is happening here, there is only one way the share price can go with that amount of cash backing and the production still to come.

One last point on the tax (I used to be a tax lawyer). It is not true that tax needs to be paid on distributions by the company. The company will likely pay an amount of tax on the profit from the sale, however this will be reduced by the amount of tax losses that are carried forward by the company (which there should be given we only made a maiden profit recently) and what the cost base of the CCP asset is (which includes exploration and development costs not already deducted). The tax (or at least a portion of it) then gets effectively distributed to shareholders as a franking credit so we are not double taxed.

I am looking forward to seeing the quarterly next week which should make some of the numbers clearer.