HummsI agree with you completely. NCM has taken a 33% stake post...

Humms

I agree with you completely. NCM has taken a 33% stake post capital raising in the knowledge that they will make money. The acquisition of the NCM assets gives both CAH and CQT shareholders significant exposure to gold producing assets now. And it is quite evident from recent share price movements in the XGD that producers are rising (explorers far less so).

Also as you say, NCM has access to assets which CAH and CQT clearly do not. The merged entity's proposed capital raising is clearly to make an acquisition which they have already identified, quite possibly (if not definitely) an acquisition made possible through the merged entity's association with NCM.

Brob

In answer to your question ("Why is it not fair?"), some of the information you provided in your post (particularly regarding CAH's contribution to production) is grossly incorrect. I extracted this table from the Grant Samuel report:

"The following table shows the relative contributions of reserves, resources, production and share market valuation that the two groups of shareholders will make to Evolution (prior to the Asset Acquisition)."

While the higher grade underground resource at Edna May is modest at this stage, a small increase in grade will significantly increase profit at Edna May because it is profitable at < 1 g/t (hence CAH's focus on establishing underground operations). It should also be noted that mineral resource remains open at depth and strike and it is shallow (550m below surface). As you say Edna May costs are a concern. I agree fully, but hope once and for all they have been resolved and will trend down significantly.

In terms of whether the merger is "good" for CQT holders, I simply don't know. It largely depends on your risk tolerance (the merged entity is less risky with potentialy less upside). Valuation is subjective hence the differing opinions, and it's a complex deal.