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Paramount Gold and Silver Corp. (PZG) Message Board

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  • Reply to

    Paramount – Coeur Merger Valuation

    by robey743 Feb 3, 2015 1:05 PM

    I thought you were optimistic now I realize you just didn't comprehend that portion of the agreement. "Comprehend means to take in the meaning, nature, or importance of; grasp" Have someone read it to you several times slow and you may get the fact that $1,470,000 is the purchase price of for 4.9% of the Spinco stock. $8,530,000 is a loan from CDE to PZG. ( Loan means the grant of temporary use or in this case a capital contribution) ".A capital contribution is a contribution of capital, in the form of money or property, to a business by an owner, partner, or shareholder"

    You shouldn't take credit for the numbers used but you definitely deserve credit for the lack of knowledge in how you used them. A company that has $10,000,000 cash is not valued at $200,000,000.00 no matter how you do the math. Try to focus on the fact that 4.9% of spinco was purchased for $1,470,000.giving the value of spinco at less than $30 mill/167 mill PZG shares equals a share value of 17.6 cents.

    Stick to giving definitions. While you aren't very good at that you're even worse at math.

  • Reply to

    Paramount – Coeur Merger Valuation

    by robey743 Feb 3, 2015 1:05 PM

    Fiftycentmo

    I’ll address first the `optimism’ you attribute to me:

    1 - Optimism is a feeling; granted, a positive feeling
    2 – Positive feelings have been identified and labelled by the `short and distort crowd’ as a `pumping’ action.
    3 – Pumping a stock, (in the markets) according to the `short and distort crowd’ demands said `pumper’s’ intelligence be denounced. And naturally/obviously, (according to the `short and distort crowd’) said denouncement leaves them as the ones to believe, the ones to follow.

    I cannot take credit for the numbers I posted. Coeur set the value for Paramount and SpinCo when they agreed to and announced the terms of the ‘M & A’ agreement.

    Note:
    “From Sedar filing, December 18, 2014
    The Merger Agreement provides that, prior to the Spin-Off, (1) Coeur will make a loan to Paramount in the principal amount of $8,530,000 and Paramount will contribute all of the proceeds of such loan to SpinCo as an equity contribution*”

    *An equity contribution is an investment in an asset that gives an ownership interest.

    Like it or not, Coeur, (and Paramount) designated where said $8,530,000 monies would be applied. Thus Coeur, by agreeing to terms, set the value of Spinco. $8,530,000 + $1,470,000 = $10,000,000 for 4.9% of SpinCo.

  • Lawyers got this.

  • Reply to

    Paramount – Coeur Merger Valuation

    by robey743 Feb 3, 2015 1:05 PM

    I like your optimism on Spinco but I can't agree with it. PZG was trading in the 70 cent range with the Mexico property and you have the value of the new company at $1.14 without the Mexico property. By your math, the less property they have the higher the stock price per share. I would very much like for you to be right but I just don't see how you can be.

  • nice post slamming those two rascals that are haunting all the miners boards,svbl is a steal at .14. Justshows how disliked this sector is.Check out northair,coeur has about 13% and a nsr ,they were very close to buying that earlier in the year.Its about .08--

  • petersen-there is so much going on with palmarejo and adding that high grade jualin which needs a tunnel and rochestor expansion-krebs said all coming together 3rd quarter 2016.Then there is buildout of preciosa for 300mill,that will add 10million oz a year,,In their feb. presentation they also mentioned stock buyback and bond repurchase..Coeur capital is worth quite a bit ,two components were almost purchased for 65 mill when market was better,that maybe spun off to finance preciosa-just a feeling no facts on that-bridget at investor relations is very competant and would be better suited to answer that-she is investor friendly-try a e mail or phone.

  • Reply to

    The Math -

    by wonderwater2000 Jan 5, 2015 9:50 AM

    Two15

    Here's my take on the Spinco valuation.

    From Sedar filing, December 18, 2014
    The Merger Agreement provides that, prior to the Spin-Off, (1) Coeur will make a loan to Paramount in the principal amount of $8,530,000 and Paramount will contribute all of the proceeds of such loan to SpinCo as an equity contribution*, and (2) SpinCo will issue to Coeur, in exchange for a cash payment by Coeur in the amount of $1,470,000, newly issued shares of SpinCo common stock amounting to 4.9% of the outstanding SpinCo common stock after issuance. Paramount and SpinCo will then enter into a separation agreement, and Paramount will effect the Spin-Off by paying a dividend to Paramount’s stockholders on a pro rata basis all of the shares of SpinCo common stock then held by Paramount. After effectuating the Spin-Off, Paramount’s stockholders will own approximately 95.1% of SpinCo, which will be a standalone, publicly traded company, and Coeur will own the remaining 4.9%.

    Immediately following the completion of the Spin-Off, the parties will consummate the Merger,

    Coeur’s initial cost for 4.9% of SpinCo is $10,000,000… The negotiated agreement stipulated that Coeur, to become a minority owner/partner, must provide a loan of $8,530,000 to Spinco, (Coeur, as a minority owner/partner cedes control of said monies to the majority owner/partner; think current Paramount shareholders) the cost to Coeur would be thus; Coeur’s cost for 4.9% of SpinCo is a cash payment of $1,470,000 and a loan of $8,530,000 for a total of $10,000,000… If the `new’ Company does not go bankrupt, if the `new’ Company is successful and repays the $8,530,000, then and only then can you say, Coeur paid $1,470,000 for Paramount and 4.9% of Spinco.

    That said, Coeur has essentially placed a bet of $8,530,000 on SpinCo’s success; a bet that may be lost as a result of SpinCo’s failure to succeed.

    *An equity contribution is an investment in an asset that gives an ownership interest.

  • I think most of us PZG investors are sold, no problems there. My question is when will CDE start paying a dividend once again? I would hope if we see sustained silver prices north of $40 they will start.

  • 5 producing mines in diversified locations, 3 in north american ,producing 34-36 million silver equivilent oz's,a almost 50-50 split with gold,a royalty-streaming division that makes free cash flow,2 major projects-preciosa a 10mill a year project just waiting for higher metals and joaquin a 70 million oz deposit in prolific santa cruz plus 295mill in bank.along with investments in strategics.All new management from mine managers up and new corporate headquarters and staff-long life mines and hugely successful recent exploration results-there are disruptive posters that are spreading missleading ,convoluted historical information-goldnogood,dumpplatium and golddump

  • Reply to

    The Math -

    by wonderwater2000 Jan 5, 2015 9:50 AM

    I think it is better to buy PZG as you are riding lock-step with CDE via the .2016 conversion and the you get the SpinCo (Paramount Nevada Corp.) spin-off just before the conversion. The price of PZG is only .2016 of CDE's price and is not reflecting any value of the spinco which the PZG shareholder will get. The CEO of PZG had indicated in past years that Nevada properties were the better half of the company but changed his tune lately to indicate that the Nevada properties only represent 20% of PZG. So if CDE buys 80% of the company for a .2016 conversion of their stock (then 90 cents) then you might say that the remaining Nevada properties were worth 20% of a whole which would have been 22.5 cents. So what might the spinco be worth if the deal was being struck today with PZG at 1.44/share .... 1.44 divided by .8 = 1.8 x .20 = .36 per share for the spinco. However, that 36 cents per share is not being reflected in the price of PZG and I believe you will get some value for those Paramount Nevada Corp shares. So if CDE rises to 10.00/share dragging PZG to 2.01 (10 x .2016) and that is 80% of a whole, the other 20% could be 50.4 cents (2.01 divided by .8 = 2.52 x .20 = 50.4) So if you buy CDE you get CDE. If you buy PZG you get PZG whom's value is being dictated by CDE and you get the spinco which at this point could be another 22-36 cents a share. If you sell PZG today then you have given away the spinco for nothing. So I would hold PZG or buy PZG rather than buying CDE. I do not know why the market has not given value to the spinco reflected in PZG's price. Just my opinion.

    Sentiment: Strong Buy

  • Reply to

    The Math -

    by wonderwater2000 Jan 5, 2015 9:50 AM

    I think it is better to buy PZG as you are riding lock-step with CDE via the .2016 conversion and the you get the SpinCo (Paramount Nevada Corp.) spin-off just before the conversion. The price of PZG is only .2016 of CDE's price and is not reflecting any value of the spinco which the PZG shareholder will get. The CEO of PZG had indicated in past years that Nevada properties were the better half of the company but changed his tune lately to indicate that the Nevada properties only represent 20% of PZG. So if CDE buys 80% of the company for a .2016 conversion of their stock (then 90 cents) then you might say that the remaining Nevada properties were worth 20% of a whole which would have been 22.5 cents. So what might the spinco be worth if the deal was being struck today with PZG at 1.44/share .... 1.44 divided by .8 = 1.8 x .20 = .36 per share for the spinco. However, that 36 cents per share is not being reflected in the price of PZG and I believe you will get some value for those Paramount Nevada Corp shares. So if CDE rises to 10.00/share dragging PZG to 2.01 (10 x .2016) and that is 80% of a whole, the other 20% could be 50.4 cents (2.01 divided by .8 = 2.52 x .20 = 50.4) So if you buy CDE you get CDE. If you buy PZG you get PZG whom's value is being dictated by CDE and you get the spinco which at this point could be another 22-36 cents a share. If you sell PZG today then you have given away the spinco for nothing. So I would hold PZG or buy PZG rather than buying CDE. I do not know why the market has not given value to the spinco reflected in PZG's price. Just my opinion.

    Sentiment: Strong Buy

  • Reply to

    The Math -

    by wonderwater2000 Jan 5, 2015 9:50 AM

    Damn this thing's been nothing but up lately.

    I got out at .85 when the deal was announced.

    Big mistake, shoulda held and got out now.

  • Reply to

    The Math -

    by wonderwater2000 Jan 5, 2015 9:50 AM

    2 per ton is good for Nevada now days. Can only hope it extends for a long way on property Thanks for the update..

    Sentiment: Hold

  • Reply to

    I'm in CDE...

    by hopeful200 Feb 4, 2015 2:31 PM

    Great volume today. Nothing but good things happening with CDE/PZG. (1) We are getting Sleeper for zero. (2) Silver is ridiculously cheap and will provide a better return on investment than gold when things start moving. (3) Silver is what CDE and the new property are all about. I think the investors are starting to realize this. Just do the math, if CDE (without sleeper) gets to 20, we'll have a 3-4 bagger here. If silver really starts to move, could be significantly bigger than that. Great risk/reward. You have just feel it. And then there's Sleeper???????????

  • ...wish I was in both and not in some other stocks right now that aren't moving like this. Anyone who thought the merger was a stinker of an idea initially, I'll bet he/she has changed his mind by now. Just the mere notion of the merger has created a climate allowing for these 2 companies to pull away from the proverbial pack, IMO.

  • Reply to

    The Math -

    by wonderwater2000 Jan 5, 2015 9:50 AM

    hey fifty -look at drill reults pershing gold right next door to coeur and rochestor mine,coeur holds 10,million shares,rasmussen stated they were sending him looking for gold,he also has found a high grade like the old dayds ofnrvada right next to their pit under infrastucture-pershing founf 20z per ton material this set of results one of best in nevada in a couple years-

  • Reply to

    The Math -

    by wonderwater2000 Jan 5, 2015 9:50 AM

    Think I get it. Merger based on % and not specific price - I read that wrong - must have. Now that we broke $1.30 - both in merger are up - thus % remains the same. Still no understanding of value of SpinCo - but you are right I think - go long with CDE. I bailed once on Mirant and SO roared back - lost on that. By number is 100K plus shares however the average price per is $2.34 or close. It's been rough since that fall - missed it completely after darting in and out for years at a nice profit. CDE has a good chance of coming back - unknown of course is will I ever go beyond my average. Bad decision - but all hope is not lost. Looks like to me - the higher both go now - is all good news - with a hope it continues. I would be delighted to come out where I went in - anything else would be great - but I am just trying now to figure out if there will be an exit strategy. Going long with CDE seems to be the best way and only way I see currently to at some point - soon or much later - make it back to original value and beyond. Each time I have bailed - it was a mistake. Not this time I hope. We live with our decisions and I have no problem with that - I just see a bit of light way down at the end of the tunnel. Thoughts as of this date?

  • The following is my understanding of merger values for Paramount shareholders.

    Paramount News Release - December 17, 2014

    $10,000,000 for 5% (round-off from 4.9%) of SpinCo
    1% = $2,000,000
    100% = $200,000,000

    SPINCO VALUATION
    5% = $10,000,000 – Coeur Mining
    95% = $190,000,000 – Paramount Mining
    Paramount Fully Diluted Shares: 167,295,469
    $190,000,000 / 167,295,469 = $1.14* per share SpinCo valuation for Paramount shareholders

    Pursuant to the Merger Agreement, Coeur will acquire each share of outstanding Paramount common stock from Paramount’s stockholders in exchange for 0.2016 of a share of Coeur common stock (the "Exchange Ratio"). In addition, Paramount stockholders will receive their pro rata* share of the outstanding shares of an existing subsidiary or a newly incorporated subsidiary ("SpinCo") of Paramount.

    Coeur current share price = $6.36
    Paramount current share price value - $6.36 x 0.2016 = $1.28
    Paramount shareholder `actual value’ - $1.14 + $1.28 = $2.42 per share

    *My interpretation of pro rata share, (pro rata means `in proportion’).

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  • Reply to

    PZG will never be bought by CDE

    by seano24 Jan 12, 2015 10:56 AM

    me too I just don't like these lawyers interfering.

PZG
1.71+0.02(+1.18%)Apr 24 4:00 PMEDT