I am thinking about the synergies of what SPR can become in the long term, not the short term. I understand their is certainly some benefits of a merger for quick bang for your buck but..........
At this stage SPR has High grade, low cost production on nearly 3 Moz, which will not stop there and will most likely become double in the short term.
SPR will be one of the lowest if not the lowest cost Gold mine in the country, they will not be mining thin vein like BGL, NN and PEPPER are massive ore bodies and still open at depth.
Im not saying that RMS are cooked, but they haven't really got anything exciting other than the 20% of SPR and like you say, may have $1B in the bank by end of next year, so will many other gold miners, but they need more production at a lower AISC if they are to grow, or they will eventually be taken out by someone else, at an even bigger discount to where they are at now.
In all honesty, I would reconsider my thoughts of a deal, if it was something like a 3 way tie up of SPR, WGX and RMS, now the synergies their would change my thought process.
I guess it boils down to what is it that RMS could offer SPR, to make it worth it to their shareholders. Im just a small fry so what I say or want will mean nothing in the end, but I would definitely be pushing to go it alone rather than a merger at this stage.
I guess put yourself in the shoes of an SPR holder, to understand what we will be able to achieve once we turn the mill on, maybe if MZ had pushed the go button a lot earlier he may have got it over the line at a huge discount to where it is today, this is something I have never been able to get my head around, why did he wait so long ???? Instead of taking out MGV he could have taken SPR first and then MGV not long after and had both for less than what it would cost to take SPR now, maybe he was thinking that and WGX through a spanner in the works.
SPR could be pushing out 250koz a year from Dalgaranga within 18-24 months. So it won't take long to bank $1B especially if POG continues to climb. The more I think about it, SPR on their own could surpass RMS FCF within the next 5 years.
A company like SPR could be the next EVN or even NST especially if they keep finding more high grade ore bodies. I must admit its been a very exciting run, both up and down since my days of holding Firefly and then GCY to be here today as an SPR holder, maybe I'm just to emotional, or I'm looking at it like its the way I would run my own business and what I would do in the same situation.
GLTAH
DYOR
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