The largest domestic silver producer is searching out more acquisitions after its $337 million purchase of Orko Silver Corp. last week, keeping an eye out for smaller deals close to existing assets. Chief Executive Mitch Krebs said in an interview Monday that, “There are some incremental-sized deals that could have an impact on our existing assets between now and 2016 that we’ll turn our attention to,” also saying that the company will think about deals smaller than Orko, but big enough to be meaningful enough to the company.
Sentiment: Strong Buy
Hello Max I've been away from the board for awhile, working with the knights of Columbus on some community service projects. Hope you doing well PGLC has not been burning up the markets lately it looks like. What's your guess on when they would attempt such a takeover though it is my opinion that the board would not be interested in a takeover at this juncture they've come too far on their own, but at the right price I'm sure they would consider it
welcome back. My logic is this:
CDE recently stated they had money for more investments after that bought that Mexican Sivler property recently that were complimentary to existing mining operations.
CDE is investing $30 million over the next few years to upgrade their Pershing Packard facility just noth of Relief Canyon.
PGLC need funding for this year to get to production and find more resources.
So I expect CDE to buy more equity first - about a 10% dillution - and fairly soon after PEA is published (end March).
I see synergy between Pershing Relief Canyon property development and CDE Pershing/Packard expansion. My guess is later in 2013 when production is near to up and running. If they are going to buy out PGLC this year then they will have to do it fairly soon as otherwise they wont be able to afford it.
Current buyout would need to be 100% premium - thats $240 million at todays market cap. If PGLC shares hit $.90 later this year (I think they have a good chance) that will make the buy out $480 million and CDE can't afford that.
So going to be an interesting year for PGLC investors whatever happens. I am holding and won't be selling PGLC when my CRGC shares are swopped likely by the end of this week.
Either way i smell a nice bottom forming on this stock. had its pop to 60 then fell backand now forming a base. Maybe nice crwal back into the 50's. IF cde bought them out id guess what? 90 cents maybe?
I can't deny that would be sweet. The last line "meaningful" may mean something. Is this big enough for them to go after? Its a small project at this point but the land could hold alot more. But I like your positive attitude. LEt CDE buy them !!
CDE announced in Jan very significant defelopment plans for their Rochester/Packard mine complex just north of PGLC. So they are ramping up their existing production anyway - PGLC would fit in very well with that. I don't think it will happen in weeks but I am now convinced the business logic is there as PGLC get in to production.
Toll loads from CDE to PGLC facility also makes sense as CDE have stock piles of ore waiting for leach pad space.