i agree with this on several points. I don't see how Kinross can pawn this on the shareholders. It's very definitely NO accretive at least for 3 more years.
No goddammed wonder the HUI and XAU can't breakout with idiot mergers like this we've seen from the likes of Yamana and GG (Glamis).
As for Red Back, I think most will be MORE than happy to back into almost 40% position of Kinross - now on its way to 3 million ozs.
Red Back may be a fine company with great assets, but for $7B I think Iamgold would have been a MUCH better purchase as that also gives them a great African foothold AND nice Canadian and South American assets to complement their own.
I am glad I sold my Kinross $32(34?) warrants that expire in the next year or so, I don't see a chance in hell of that barring $1650 gold ala Sinclair by Jan 2011.
I thought by comparison Newcrest did much better paying a similar amount for Lihir.
I thought the Aurelian deal was ok long term, they didn't sell the farm to buy it and it is a very lucrative long term gold play. But this doesn't make sense to me. I would think gold miners would want the most bang for their buck, not nabbing a high flyer on a tear and buying the whole kit and kaboodle at all time highs.
Personally I think they should have looked at GORO. They could have bought them for 10% the amount of money and gotten potentially 200,000 ozs of zero cost production high grade ore, which helps skew cost downwards. That's what I call accretive value.
Yes it is possible that the Reback shareholders will vote yes. But Kinross shareholders will vote no. I was assuming the no vote since Kinross shares will drop to the price that the market perceive as fair value for the Red Back Mining shares. The premium will disappear. Also Kinross's float will ballon to over 1 billion shares. Barrick with 900 million shares is trading at $40 and they mine 8 million ounces a year. There is no growth potential with that amount of shares since in 5 years they will be half of Barrick current production. The most the shares will be worth is $20 if it were trading today.
....Having been a ARU shareholder at the time that Kinross bought it...I would have to say that everything that you have stated is probably a fact!
Kinross had the "deal" with Aurelian all sown up before any votes took place! Kinross was basically a silent J.V. partner that already had many shares...and had that ARU management in their "pockets" with big payoff deals in place!!
We, the retail share holders, (who had profited greatly in the Early days of the Bonanza discovery) fought like hell to not be "bought" ...but it was all an exercise in frustration, because it was a deal that was already done in the Company's "back room"!!
Best Regards,...I hope this deal fails soon, so that the share price can rise some...then I might make my way to the "exit door"!! Long for Cash