Been There,

With an assumption that G came in with a low-ball, as usual. So, if AEM want to be playful it could throw the hat in the ring to tease G a bit. You are quite reasonable/generous to give a timeline of 3 weeks, since my crystal ball says something is going to happen a lot sooner than that. Give people a week to digest the info. In fact I would guess that PRB has been on the cross-hair of quite a few seniors, some of which could have intimate knowledge about PRB potential and its worth. Bet that next week would see a counter offer, and the first one would be AEM. Two potential scenarios

1. Nickel and dime: A counter-offer would trigger a second offer from G, based on past behaviour. This low-baller would not start high with te first offer. Depending on have high AEM want to go for its first shot, and second shot, and the max it can afford, AEM could cash out later if it decides that enough is enough. This would result in a lot more than the $40M as indicated for cashing out 7.3+5.6=12.9M shares. If the offer is raised from $5 to $6/s then the additional gain would be another $12.9M. Let assume further that AEM max offer would be $8/s and G would match it and AEM decide to cash out. That would result in an extra 12.9 x 3 = $38.7M (almost 100% increase from $40M).

2. Going all the way: AEM may want to play it all out by structuring an offer that G cannot match, say abit over $8/s plus a new PRB that would please current PRB shareholders, e.g. ~$30M in the treasury and a package of properties that include the RoF and some promising Borden claims (all the claims outside the Borden Gold deposit). AEM can include a potential JV agreement with the new PRB, so if the new entity stuck gold again, AEM would gain as well. For example a 30/70 JV which could be increased to a better ratio, depending on AEM future investment could be acceptable to PRB shareholders. In effect they can let Dave do the exploration work for them on some or all Borden properties (outside the Borden Gold deposit plus enough real estate around it for build the mine). To derisk the situation, AEM could bring in a partner (hello Yamana?).

In my opinion, AEM with or without a partner has enough firepower to have a run at PRB to a successful conclusion, especially if their offer is in the form of share swap (they don't need millions and millions to pay for the deal, just like the current proposal from G).

Note: Currently with the POG within striking distance of the 1300 level, PRB Borden Gold has about 8Moz of economical deposit, including an extractive high grade zone (>5gpt) which is expected to be growing (infill, the wedge, SE extension). There is a good possibility for Borden Gold deposit to reach the magic 10MozAu, which should command a higher price than Iamgold paid (some $600M for about 7Moz) for the low-grade (less than 1gpt) deposit at Cote Lake. Would $900M be a reasonable price for 10Moz with a potential to hit other deposits in the 70km strike length? And the RoF properties are just like Sleeping Beauty. She would wake up when she's good and ready.

goldhunter