Friday, April 1, 2011

Endeavor Mining - How to Grab a Tiger By the Tail

Endeavor Mining

* 80,000 opy gold


*

$200M Cash


*

$295M Market cap ($2.57/sh)


*

114M o/s

*

TSX listing


vs.

White Tiger Gold

*20,000 opy gold


* 20M Cash


* $382M Market Cap ($3.35/sh)

* 114M o/s


* TSX listing

Endeavor's problem has always been sitting on a hoarde of cash and not knowing what to do with it. Endeavor also has experience going a round or two with the Russians (aka. Severstal).

With Century Mining currently sitting at a meager 47c ($180M m/c), Endeavor Mining could very easily purchase the entire operation lock, stock and barrel and still have $20M left over in the bank. The Endeavor/Century Mining combination would produce between 180,000 -210,000 opy by 2012. (almost twice the gold that the WTG/CMM combination is proposing). This new EDV/CMM company could easily achieve a market cap of $1.5-2 Billion.

So please keep driving down the share price Mr. Finisky. It won't be long before a competitor steals Century Mining right out from under your nose and sends White Tiger Gold back to Moscow with its tail between its legs!

8 comments:

PayDay said...

If someone wants to fix the spacing in this post they are free to do so.

nt300 said...
This comment has been removed by the author.
nt300 said...

I was doing some reading up on Endeavor and they seem to be one of the best candidates for a solid future proof merger with CMM. Awesome find PayDay, now all you need to do is give them a quick e-mail.

NSX001 said...

Oh I really like the sound of this from the Endeavor article.

"I also have faith in the ability of CEO Woodyer and company to continue finding valuable partnership opportunities in the junior gold mining sector, which is often where the greatest gains are realized."


How the h*ll does one get a hold of some one at this company? I wonder if they're already aware of our situation?
NSX001

Yellow Tiger said...

PayDay, thanks for this terrific post.

I am a Canadian corporate lawyer who has advised on numerous acquisitions in this space and also a minor shareholder in CMM.

I agree with Uall's previous post about the wisdom in seeking a white knight/additional buyer for CMM given the tremendous opportunity to acquire a significantly undervalued producing company. Endeavor is a great one to consider.

In response to NSX001's question, here are my suggestions (not to be construed as legal advice or an endorsement):

1) A simple pitch (ideally 1 page) should be prepared so potential acquirors/their advisors can quickly see through the misinformation being spread to the significant opportunity in CMM.

This document should contain:
a) reasonable and conservative estimates of the significant assets of CMM (including cash costs of production);
b) a discussion of the additional advantages of acquiring CMM (assets in a mining friendly jurisdiction, already producing San Juan mine, on the verge of cash flow production etc.)
c) a discussion of risk factors/liabilities and how to overcome them (these include: dealing with a significant shareholder like Finskiy, alleged liquidity issues, which would be less relevant to a significant producer)

2) The next step will then involve figuring out who logical acquirors are. In addition to Endeavor, two other companies that would benefit from a highly undervalued gold producer like CMM would include Kinross and AEM. There are many more.

3) The next step would involve tailoring the pitch to highlight the benefits to the specific acquiror.

4) The final step is bringing the pitch to the attention of senior members of the Corporate Development/Business Combinations/Mergers and Acquisitions advisory teams of the potential acquiror. Other parties to present the pitch to include (a) investment bankers(who often pitch acquisitions to acquirors) and (b) members of the special committees of the acquirors (their identities can often be obtained on SEDAR in information circulars) and possibly advising lawyers/auditors.

Carib, you have done a terrific job with this site.

To move this forward, it would be advantageous to host two documents on this site which can be collaboratively edited.

The first is the pitch. UAll, your numbers have been pretty reasonable and you appear to have a decent grasp on the process. Would you mind preparing a first draft for the group to comment upon?

The second document is a spreadsheet of potential acquirors and their contacts (shouldn't be too hard to track down). This document can also contain their responses.

Carib, you've done a great job of creating, maintaining and rallying the members of this site. Are you able to host each of these documents? Google docs is an alternate option.

Have a great weekend.
Yellow Tiger

Ron S. said...

Thanks Tellow Tiger,
I am not an expert in this process
but wonder the prudence of posting all you suggest. Good direction though.

Input from the group is an ideal I hinted at myself, however, perhaps the input should be put towards selecting a commitee the majority approves of and having them work on a private webspace.

bigjohn37 said...

Yellow Tiger, welcome to the Blog, and thanks for your excellent advice (we need it!). I have two questions for you: (1) would you mind to join the Blog? (2) Do you own any CMM shares (i.e. do you have a direct stake in our battle)?
Thanks, and I do hope you will join.

bigjohn37 said...

Yellow Tiger, I apologize; you did say that you are a minor shareholder of CMM (I should have read your post more carefully!),