re: what is mgl worth in a takeover?
Prices for completed drilled projects accompanied by a BFS have risen with the Gold price.
The large Gold producers (The Majors) will be looking for big deposits even with lower grades, all the time.
It is also possible that a sale can be made prior to a BFS, although there can't be a guarantee. _______________________________
Assume that the prospective sale value will be some $75/ounce at a Gold price of US$550 and a 2.7 gr/tonne gold grade for the MOTO project.
The MOE options will be exercised in May; there are some unlisted Options and warrants to convert at some time, a grand total of 273.1 mill shares, say 275 mill shares (diluted) when the offer is made.
They reported 11 mill ounces on 14 Nov and were drilling extra ounces at a rate of 1 mill ounces/month or 3 mill ounces in 3 months.
I don't think that 16 mill ounces on 1 July 2006, will be a problem. If they continue drilling that may increase further; they may do that to advertize the size of the resource and the price goes up with the size of indicated/measured resource.
Let us assume that they will have 15.88 mill ounces; MGL, MOE's 98% subsidiary will be entitled to 10 mill ounces of that according my previous calculations.
MOE has 98% of MGL, so the value to MOE could be: 0.98*10 mill ounces*US$75 or US$735 mill or A$980 mill (A$=0.75US$)
That is A$3.56, say $A3.50 per MOE share (Fully diluted).
The current MOE share price is A$1.13 but overnight MGL rose 26.7%.
IMHO, there is quite a large upside left should any sale take place this year or early next year based on the data given.
Subject to audit. Please note that this resume should not be taken as advice. There is risk.
Gerry Readers, please do your own research and you decide if and when to buy, hold or sell any stocks or metals/commodities.
MOE Price at posting:
0.0¢ Sentiment: None Disclosure: Held
