HAS THE MARKET BECOME TOO DEPRESSED?
Iamgold to buy Trelawney Mining for C$585 mln
Fri Apr 27, 2012 10:43am GMT
April 27 (Reuters) - Iamgold Corp will buy Trelawney Mining and Exploration Inc for C$585.3 million, to expand its gold assets in northern Ontario.
The offer of C$3.30 per share represents a premium of 42 percent over Trelawney's Thursday close on the Toronto Venture Exchange.
In light of the out of the blue take over bid today for Trelawney investors must ask them selves has the market become too depressed in the JR gold space so much so that a wave of take overs may be at hand as the continued market delcine in the share prices of gold JRs with assets in the ground starting at 1st of Feb has made the major miners sit up and take notice to the gross undervaluations?
In the case of TRR it seems so.The shares of TRR were trading near 52 week lows and Iamgold decided to take advantage of it.They are offering about $100 per os for TRR and its 5.9 million oz deposit grading a .82 gt.
I suspect the market has put in a bottom as the majors need to replace reserves and are likely to do so now at the bottom rather than at the top.This brings to question is PEM ripe for a bid.I say yes.Midas gold indicated to me an interest in PEM at the 2012 PDAC. The stock was trading at twice its current valuation at that time.PEM was cought in the market down draft and to add insult to injury had to pull its 43-101.This also has depressed PEM shares.But a closer look at the situation implies that a new 43-101 is just around the corner in the month of May as per the company.That could be a prime motivation for cash rich Midas to make a move on PEM getting a claen bill of health at the Friday deposit.I have heard there is another company interested in PEM.Cleaning up the 43-101 would go along way to make PEM a very attractive buy out target with the current share price trading at a 90% discount for the Friday deposit to todays TRR bid.
I suspect PEM shares are at a bottom and are going to sharply improve in the near term.One thing is for sure investors may not price shares of million oz jrs correctly but the majors will.
If are at the start of a wave of takeovers.Deposit rich JRs are in play.If Midas was interested in PEM to visit its property three times,then they must be thinking that the shares are much cheaper now.
James |
