merger upside

I've been a LT holder of AAG and have always appreciated the contributions on this page. Sunburntland, jtaylor, swordfish and others helped keep the faith, particularly in those dark days post-Fulcrim when the SP was bumping around at 13 cents.

The biggest hurdle for AAG is not proving up a project, but raising the funds to develop it. Add a processing plant to mine development costs at Big Bell / Golden Finger and you're looking at $130 million or more. A real challenge for a company of only $60 million market cap, shallow shareholder base and limited market visibility.

Another challenge, which I think jtaylor or another picked up recently, is the lack of surface resources that could drive the early, cheap tonnages to fund underground mine development. The optn pit optimisation studies, released in the last quarterly, were underwhelming.

The lack of market visibility and awareness has been a source of frustration for LT holders. The reality is AAG is one of dozens of minnows aspiring to transition from explorer to producer. A glance through the WGR forum would reveal a similar level of frustration by LT WGR holders!

The benefits of the WGR merger for AAG holders as I see it are:

* $130 million market cap company with all the advantages of size - e.g. increased market presence and visibility, significantly greater flexibility in accessing funding, more institutional investors (who have restrictions on what size cap companies they can invest in)

* lower risk profile - going from a one project / one commodity company to a two project / Au-Cu company

* Fast track to production. Rover would appear to be both a more profitable (mid-$500s cash cost) and lower capital cost project. It is also more advanced than CMGP which means closer to first gold pour which appears to be the market trigger for SP revaluation.

* Project pipeline. There's no urgency to develop both projects simultaneously. Which means it is more feasible for WGR to raise the funds to fast-track Rover 1 to generate the cash flows to help fund the more capital intensive CMGP.

These are my views anyway for what they are worth. I understand and share the frustration of LT shareholders. That 40 cents a share by last Christmas was going to fund a holiday to Europe!

But I don't share the view that we are "giving away" AAG. We will still have the same shares but in a company twice the size, with twice as many projects and a fast-track to capital funding, first gold pour and SP revaluation.

DYOR and good luck to all holders.