Re: kry endgame disscussion
in response to
by
posted on
Apr 15, 2009 04:24PM
Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America
I was going to complain about being called a pumper, but after thinking about it rationally, you're right. That scenario alone is unbalanced.
Scenario 1)
Around May kry starts arbitration process. Stock price drops. Around June to October, Infinito's arbitration case gets settle, and they win, big time. ABX would be crazy not to exercise their buy back cause. But kry’s arbitration case is in the shadow. With gold prices being where they are now and where ABX think it might be going, and not wanting just a simple role reversal where ABX is now the operator and kry in arbitration for damages to drag on for years, especially with the Venezuelans wanting the project to start this year, they offer to buy kry out for cost of investment alone. Besides, they need the equipment and engineering plan, and there is value in kry even without crystallex. I believe kry invested ~$300 million, so at $300 million (chump change for ABX) for 300 million shares, $1 per share is a reasonable offer.
If this scenario plays out, your best play is to sell NOTHING until November-December and for nothing less than $1 a share (note, share price is currently $0.27 a share).
Scenario 2)
Starting around May kry share price starts to move up. Over 30 million shares will trade. May comes around kry starts arbitration process. Stock price drops slightly. ABX comes in and offers a low ball all cash offer of around $2.50 a share. Around June to October Infinito's arbitration case gets settled. The Venezuelans (sorry for the previous derogatory remark) finally issues the permit. ABX ups their offer a bit depending on the outcome of the case and how many shares they manage to acquire.
If this scenario plays out, your best play is to sell NOTHING until November-December and for nothing less than $8.50 a share. There will be other offers... Or we can go in alone with debt financing.
Those are the endgame I see. Anybody got another? I can think of worse scenarios, but they are not logical, at least not with the facts that I have. Let’s keep this discussion rational. I’m not a pumper, but being a share holder, I am bias. If you see something wrong with my thinking, point it out and I will correct it. Or go ahead and offer your own scenario and what strategy we can use to maximize share holder value.