According to Stewart Thompson, Eric Sprott loves the deal between ECU and AUMN.
OK, I guess numbers 4-8 have me convinced it's probably a good deal for both ECU and AUMN.
From tonight's Midas report on the proposed merger
posted on Jun 27, 11 07:52PM
On Friday June 24, 2011, ECU Silver Mining, Inc (ECU) and Golden Minerals Company announced a definitive agreement to combine the two companies, representing a merger of equals and, "creating a new leading junior silver mining company with a portfolio of growth projects, primarily in Mexico and Argentina. The company combined will retain the Golden Minerals name and remain headquartered in Golden, Colorado."
For many months, ECU President, Steve Altmann has sought a business combination in order to strengthen the company and enhance shareholder value.
In my opinion, this is an extremely positive development and provides the following benefits to ECU and its shareholders:
1) Removes the $16 million debt from ECU’s balance sheet.
2) Golden Mineral’s $104 million cash position allows ECU the capital to further develop mines and expand production at Valardena.
3) Golden Mineral adds a highly qualified production management team to ECU’s equally-talented exploration team.
4) Since ECU shares (currently valued near $1/sh.) will be converted into Golden Mineral’s shares (currently valued near $20/sh.) on a 20:1 basis, it will remove the massive float of ECU’s 317 million shares outstanding which allowed the hedge funds to manipulate the stock via naked-short positions.
5) The combination will allow much greater access to the capital markets for future growth.
6) The merger will provide much greater institutional and analytical support.
7) The combined company will now be listed on both the NYSE AMEX and the TSX providing increased liquidity and visibility.
8) Golden Mineral’s mine portfolio contains a (potentially) world-class El Quevar Project in Argentina which provides further geographical diversification to ECU’s Mexican-based mines.
The transaction is supported by both Boards of Directors as well as major shareholders of both companies. It is expected to close in late August-early September, and proxies will be mailed to shareholders for voting in July 2011.
Wistar W. Holt
June 27, 2011
Thanks SoccerDad! I'd give you more hat tips if I could on this post!
What a month for ECU. The price of silver is up 16% and the stock tanks to 0.74 off 24%.
It's not just ECU. It seems like the mining sector as a whole has been beat down. I'm not sure why this is, but I think it's people waiting to see what happens with the debt ceiling. The Mighty Turd has stated many times they will raise it, but this is not common knowledge among most people. Too many of the sheeple watch the mainstream media, and think that somehow Washington might do the right thing. Hehe, that will be the day!
Everyone here should know by now what path our supremely intelligent politicians will choose. We should be loading up while the mines are cheap. If a stock is dropping it has no affect on earnings. The mines are racking it right now, and it should only increase as our situation worsens. Earnings will keep increasing, and valuations will get better and better.
This is just what I think. I am not an "expert" and could be totally wrong. However, I am 90% sure we will all be much wealthier by December. Just hang in there, and don't forget to buy physical!
I did not make myself clear. I own 8 silver miners. Some were down 2-5%. First Majestic was up 21%. SLW, SVM, USSIF were all up on the month. ECU stood out for its poor performance by a big margin.
Could be the upcoming merger with Golden Minerals?
So Golden Minerals fell 19.11% today... OUCH.
I'd buy more if I could right now. I think this one will be a winner long term. Too many great properties.
I've just been mesmerized at the miners that have been on sale these past two days... it was a really difficult choice choosing which to get it. I chose almost according to what sold off *the most* as a relative value. Still got a bit of cash left... let's see what Monday brings.
Golden Minerals seems to just keep make fresh lows. WOW!
More downside risk? or are we due for a bounce?