Inevitability – In Some Sectors M&A Is When, Not If
While M&A activity takes place in all industries, it is more inevitable in some. Technology has a lot of M&A but it is less inevitable than two others. Biotech is very inevitable in that most smaller biotechs, if they discover a potential blockbuster drug or treatment, get bought out by a large drug company. The other inevitable industry is mining, especially gold and silver mining. The large companies need to replace reserves and do so by combining their own exploration and development efforts with purchasing reserves of new discoveries by juniors and smaller exploration companies. The two giants in Nevada gold mining are Barrick and Newmont. I believe that before another year goes by, they will engage in a bidding war to buy out GSV. We don’t yet know how valuable GSV’s Nevada projects will become. When results get released and valuations of reserves can be established, we should see GSV rise and the opening salvo by one of the giants take place. Not to be outdone, the bidding should be aggressive. Looking at the number of shares outstanding and a few other metrics, I can see a final price in the $2.50-$3 per share for GSV. A lot depends on where gold is priced at the time of any offer. The longer out into a year from now, when the gold price is presumably considerably higher, will determine how close to a $3 price. GSV has been leading the miners and metal price for at least a year. It headed down before last year’s everything crash and led back up after the March 23rd bottom. It has led on the way up and on the way down during this major correction. It has now carved out a small inverse H&S bottom over the last ten trading sessions. If you buy in to my thesis that they will eventually be bought out, today represents a great entry point if you aren’t already in.
I like your thought process.
Buying successful explorers is a much more efficient way for Majors to acquire ounces in the ground.
Fingers crossed on GSV and the other magnificent 9 🙂
Cheers
I promised myself I would never by this dog again, and I just did. Got in at .60. I thought it can’t go much lower. Famous last words.
If this marks a low and you are never under water, try to stay patient and you should be rewarded. Good luck.
Were you able to buy more shares at .50?
I didn’t get .50 but in the .55 area.
It’s hard to believe it hit .50 a week ago.
I’ve looked into this miner and don’t see it going above 1.00. It doesn’t have enough ounces to attract a big miner to bother bidding for it unless we have a big jump in gold. I’m getting out at 1.00, if it makes that, or .90.
You may be correct but the deal NEM just announced this week doesn’t appear to be that large either. The industry may be at the point where you have to do many more smaller deals because there aren’t a lot of large finds around.
Excellent point, Sir CM!
A few smaller deals, are better than that one whopper of a deal (just like in fishing)!
I made my first catch of FRERF today, @ 0.0409 per share.
Thanks to all the Tenters for the nuggets of info and wisdom!
GL
Pressed the send button too early … wanted to share how wary I’m of this PM bull market.
To buy FRERF, I used the proceeds from realized profits in NGD and NSRPF. Did not add a single penny of cash!!!
Sold 7.43% of my NGD holdings (long term, 11/8/2019)
NGD bought at 0.8480 / sold at 1.7711
Sold 7.21% of my NSRPF holdings (held since 5/25/2017, LOL )
NSRPF bought at 0.5641 / sold at 2.65
GL
Thanks for the heads up, by the way. I’d stuck it in my stinky file of failed investments, and now I think I’ll break even on it one day, LOL.