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SBM $2.90

good news

  1. david

    1,400 posts.


    this was an email from a broker at hartleys enquiring about santa barbara merger


    I have spoken with one of the Directors of St. barbara who provided
    further commentary on St. Barbara Merger.

    The Directors of St. Barbara realised the with their present
    operations, they were never going to produce sufficient cash and grow
    the business fast enough from their principle asset at Meekatharra.
    They were asset rich and opportunity rich, but not producing sufficient
    cash to get there.
    They needed to get the Paulsens project up and running which would need
    a significant cash injection. They saw that they could work Meekatharra
    as hard as they liked but it was not going to change the momentum fast
    enough. It was not possible to raise sufficient cash from St. Barbara
    shareholders, and, although finance was available from Banks to develop
    Paulsens, it came with covenants which basically handcuffed the
    Company.

    The needed to look for another way to develop Paulsens and required two
    things - Another property to make a lot of cash and access to funds that
    were not shackled with covenants.

    The merger with Midas Gold plc gives the merged company (Defiance
    Mining orporation) a mine that will produce around 130,000 ounces of
    gold per year over a 7 year period at a cash cost of less than US$185
    per ounce.

    In Canada last year, in excess of $2 billion was raised by Canadian
    companies like St. Barbara. The merger with Geomarque Explorations
    Ltd.gives Defiance Mining Corporation instant listing in Canada and
    provides the company with the ability to raise new money and gain access
    to a wider group of shareholders.
    The Board of Directors of Geomarque are well known and respected by
    Canadian Investors.

    The bottom line is that the merger will:
    (1) produce a larger company.
    (2) result in a cash injection from outside
    (3) give the Company the ability to develop additional assets
    (4) generate the momentum to move forward.


    Regards,
    Colin

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