Saturday, 13 July 2013

Junior Gold Mining M&A - Alamos Gold to Buy Esparanza Resources

Alamos Gold announced a friendly takeover of Esparanza Resources for approx C$69m having been recently beaten to the much larger Aurizon by Hecla.
Run by the ex Minefinders team (acquired by Pan American Silver) they could have sat on cash ($36m at end 2012) so what has prompted an immediate sale?
Again only a few very recent buyers will be making a profit on Esparanza even though the stock was up over 30%......MORE

Esparanza had previously made deals with Pan American Silver , a $35m financing at $1.70 / share only months ago and a deal on other PAAS properties so there seems some possibility of a counter offer, discussed here at IKN who seems unimpressed by the company. Rick Rule has been more positive some time ago, but the sale suggests they have been unable to progress financing and there have been recent permitting problems

Unsure how long the latest EPZ presentation will stay up - HERE

The focus was a relatively small but low capex and low operating cost open pit in Mexico. This matrix shows NPV 7% from the 2011 PEA valuing the acquisition on around $1050 gold, although cost inflation is likely to have moved the metrics.

But they couldn't find the additional financing

No comments:

Post a Comment