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Bob Kirtley spent many years working on Oil projects including some in Alberta, such as the tar sands installations in Fort McMurray. He lived and worked in many different countries, as that is the nature of the construction business. Planning and cost control are key to a projects success and... More
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  • Newmont takes out the Fronteer Gold Incorporation  2 comments
    Feb 3, 2011 7:45 PM | about stocks: GOLD

    By Bob Kirtley

    04 February 2011

    FRG Chart 04 Feb 2011.JPG

    The hot news today is that Newmont Mining Corporation (NYSE: NEM) (and Fronteer Gold Incorporation (FRG) have announced that they have entered into an agreement by which Newmont will acquire all of the outstanding common shares of Fronteer Gold by way of a Plan of Arrangement.
    Under the Plan of Arrangement, shareholders of FRG will receive Cdn $14.00 in cash and one  common share in a new company (”Pilot Gold”), which will own certain exploration assets of Fronteer Gold, for each common share of Fronteer Gold.  The cash consideration represents a premium of approximately 37% to the closing price of the common shares of Fronteer Gold on the TSX as of February 2, 2011 and equates to a value of approximately Cdn $2.3 billion for Fronteer Gold (excluding Pilot Gold). 

    We draw your attention to the premium paid which around is 37% above the stock price and wonder will this serve as a bench mark by which other target companies will set the floor for any negotiations regarding the takeover of their organization. There are any number of candidates out there which no doubt appeal to the bigger players who are finding it enormously difficult to grow the resources organically and must therefore hit the acquisitions trail in earnest.

    No doubt the rumour mill will go into over drive and names will be forthcoming with almost certainty that they are the next one to be devoured at a spectacular premium. The news should give a boost to the mining sector in general and especially to those companies who are sitting on substantial reserves. On the down side the danger is that we get sucked in by the chatter or white noise and chase prices higher of certain companies, who are not on the wanted list, so take care out there.

    Fronteer Gold owns a 100% interest in the development-stage Long Canyon project, which is located approximately one hundred miles from Newmont’s existing infrastructure in Nevada.  The proximity of Long Canyon to Newmont’s Nevada operations provides the potential for significant development and operating synergies.  Fronteer Gold also owns a 100% interest in the Northumberland project and a joint venture interest with Newmont in the Sandman project in Nevada, among other assets.  Fronteer Gold has total attributable Measured and Indicated gold resources of 4.2 million ounces and Inferred resources of 1.7 million ounces at Long Canyon, Northumberland and Sandman.

    Good bye FRG, we wonder who will be next…..


    Over in the options trading pit we have just closed 3 more winning trades, so we now have 62 winners out of 64 trades, or a 96.87% success rate.

    If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.

    sk chart Jan 2011.JPG

    The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

    So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

    Stay on your toes and have a good one.

    Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

    To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

    For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

    For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

    Stocks: GOLD
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Comments (2)
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  • deshepherdishere
    , contributor
    Comments (2) | Send Message
    The deal sucks except for management which gets to continue by starting all over again with pilot gold. My forecast for fronteer when I bought them at 12 dollars was 18 to 20 dollars this year.Newmont should be offering a share swap of 1 newmont share for 4 or 5 oo fronteer gold plus shares in pilot gold.
    And what´s happening to Fronteer´s uranium shares?
    Reject the deal!
    4 Feb 2011, 09:32 AM Reply Like
  • Bob Kirtley
    , contributor
    Comments (919) | Send Message
    Author’s reply » From what we can ascertain both parties are happy with the deal, so it looks as though it will go through as is.
    9 Feb 2011, 07:53 PM Reply Like
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