takeover target, page-3

Hussy, the full article.....but nothing really of substance.

Keep in mind too that they have $43.5 million in cash, no debt and around 15 million unlisted options that are in the money, that would convert into about another ~$11 million. I'm sure it's on the radar of a few majors and even more so of the extra potential from current drilling targets.

I doubt if it would be given away on the cheap.

ARTICLE:

http://www.theaustralian.com.au/business/dataroom/papillon-resources-seen-as-takeover-target/story-fnjw8txa-1226818002092#



MARKET sources are speculating that the mining sector could be the one to watch for the next major takeover, and the first to happen may be a tie-up between gold companies on the back of the recent rally in the commodity price, with Papillon Resources among those grabbing attention.

Throwing weight behind the theory are a few major deals to have recently unfolded in North America and Australian asset sales, with Northern Star buying assets from Canadian giant Barrick.

Globally, Gold Corp is moving to buy Osisko Mining Corp for $C2.6bn ($2.63bn), which some say demonstrates that such opportunities are worth pursuing and that the big names are looking around for opportunities with quality asset bases.

Some say there is every chance that Papillon, an emerging west African miner listed in Australia, is a takeover target.

It owns a project in south western Mali called Fekola, and has been tipped as a company high on the list of those focusing on quality assets rather than production. The company's share price has rallied from 90c in December to about $1.22 and its market capitalisation is about $415m, which some consider well priced, considering its Mali project is well developed.

However, about $300m needs to be outlaid for the project to be built.

A deal with a 30 per cent premium on market capitalisation equates to about $520m, taking the cost for a buyer to about $820m, factoring in the project costs.

The logical buyers for Papillon would be London-based Ran Gold and Toronto-listed IAM Gold, which has two nearby mines in Mali.

Generally speaking, shareholders haven't been keen on companies growing production for the sake of it and taking on more risk.

Some investors urge management to focus more on getting assets to work more profitability and efficiently rather than looking for opportunities.

But recent deals show management teams may opt to take the more ambitious route.