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Our Favorite Gold And Silver Potential Takeover Candidates (Part 1)
- Investors should consider finding quality explorers and developers, since miners will need to replenish existing reserves.
- We expect acquisitions to increase significantly over the next few years, regardless of the gold price.
- Exeter Resources is a convincing acquisition target for a company like Kinross because of its location and price.
Exeter Resource: A Takeover Candidate With A More Feasible Mine Plan
- Rick Rule was negative on XRA last year.
- Exeter has since revised its mine plan for Caspiche.
- Exeter has $35 million in cash and no debt.
- An acquisition of Exeter by Kinross makes sense.
Update: Exeter Resources Expands Its Water Drilling Program
- Exeter Resources recently expanded its water drilling program after first holes show good water results.
- Management expects last two holes will continue to show that water resources can support the Caspiche project.
- Water results are one of the remaining unanswered questions regarding Caspiche development and may be the last straw that an acquirer needs to pull the trigger.
- Exeter Resource released a new Preliminary Economic Assessment on its Caspiche project.
- The new PEA makes Caspiche a highly scalable project with a low cap-ex cost.
- The company has a solid balance sheet with $35 million in cash and no debt.
- Exeter's stock price is being discounted based on "old views" of Caspiche being a high cap-ex, low grade deposit.
Exeter Resources: Investors Should Expect A Higher Share Price Or A Buyout
- Exeter's new PEA shows that Caspiche can be developed as a low-CAPEX mine with a fraction of the original water usage.
- Exeter's current share price is at levels that reflect its previously financially unfeasible, high-CAPEX Caspiche plan and Exeter could have a 30-50% upside to get to price levels that reflect.
- The newly demonstrated optionality of Caspiche offers potential acquirers two different ways to develop the project based on high or low gold prices.
- Kinross's nearby Maricunga mine is expected to leach its last ore in 2019 and Exeter would make a nice, cheap target to shift resources over in time for mine decommission.
- A new Chinese law to remove government approval for acquisitions under $1 billion may bring in Chinese acquirers as Chinese-Chilean trade relations are extremely strong.
$140 Of Gold For 1 Paper Dollar: I'll Take That Deal
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