I was put onto merger today and from discussions with a number...

I was put onto merger today and from discussions with a number of people involved it looks like a great deal.

AWC has cash, however, their project is quite reliant on doing a deal with the Jerritt Canyon processing facility. However with the recent take over its unlikely they were going to do a deal on favorable terms with AWV. More than likely they would play the waiting game, bleed out their cash reserves and either dilute AWC holders or pick it up for a song.  AWC is not a project that would spend the CAPEX for their own facility so they really need to do something else while they wait.

A bit more reading here - http://elkodaily.com/mining/canadia...cle_605d9414-8871-5695-878c-4c430c230929.html

EXC on the other hand has a low CAPEX project that needs cash. The market was hesitant as this was obvious, but once producing it will spit out plenty of free cash flow. There is a lot of exploration upside here also, however, without cash they weren't doing a lot.

The deal that gives 1 AWV for 2 EXC has now put a nice arbitrage play to the market (i.e. - 4.6c on EXC = 9.2c AWV and currently 10c = 0.8c profit). It's likely this gap will close and i believe will be driven by the AWV share price as it's the larger of the two.

That said, given this will be a larger entity and will bring the best out of both projects (EXC can go to production with the cash and AWV now isn't desperate to deal with Sprott). My take, it's a great result for shareholders of both companies. I expect that there is more certainty around both and it will attract more investors to the story. Now with a number of brokers involved, it will begin to get more exposure with investors and with more roadshows/marketing i'd expect this to begin to trade above the deal price (AWV 12.5c/6.25c EXC).

I wouldn't have bought either company prior to this deal, but i have entered today and will continue to accumulate. Given the merger will more than likely proceed, it will make sense to buy which ever is cheaper as part of the arbitrage. In this case, EXC is still at a discount to the merged AWV deal.

Any research and constructive comment appreciated.