Re: Takeover Rumours from Denver
in response to
by
posted on
Sep 11, 2008 05:23PM
San Gold Corporation - one of Canada's most exciting new exploration companies and gold producers.
Rayanne,
I don't think you need to worry. This price plunge is a reaction created by rebalancing of holdings of large funds as the price of gold has fallen and other economic factors have come to bear. I think we have seen the worst and that we will soon be moving back upwards. The price these last days does not reflect the value of the company, IMO.
I also expect to see the price of gold itself going up again soon. There have been attempts to prop the US$ which causes gold to drop, but you can only prop so long when the reality is not there to hold the dollar up. I expect we will see more bank failures/crises shortly showing that the credit problems in the US are still far from over.
SGR doesn't need to raise cash for some time..... by the time it does, I think we will be past this current dip. Elementwise had posted a cash flow projection a couple of days ago showing it was possible to make it through to self-supporting status without much additional fund-raising. If prices stay in the low range, it might interfere a bit with exercise of warrants, but again, I expect that there won't be a problem by the time it matters.
If there is a low-ball takeover offer, the company has a back-up plan to make sure we don't lose out ("shareholder rights plan"). I don't think an offer like that is coming now, and if it did, it would take some time to call a shareholders meeting, etc. to deal with it; by then the market scenario would likely be quite different again, so I cannot see that a low-ball offer would succeed.
San Gold is a solid company executing a strong development plan, IMO. While they are not perfect, the plan is coming together and their financing is intact. I am confident that this is a company we do not need to worry about.
All the above is my personal opinion. There will be other opinions and I hope that they are shared.
Best wishes.
NorthLion