SLR announced a merger with Doray Minerals (DRM) this morning, to create a mid-tier gold producer of around 240,000 ounces per annum. The ASX announcement described it as a "merger", but an Aus Fin Review article calls it a move "gobble up" Doray, and points at more consolidation to come in the industry. Mr Market not impressed: SLR -9.6% and DRM -11.1% at the close.
I'll have to re-evaluate SLR now. I liked their cash positive no debt position before and pulling tons of gold out of the ground. I hope the merger doesn't impact that.
The new group still looks in great financial position. Combined group now has some debt of $15m, but cash assets of $134m, and pulling 230+ tons of gold out of the ground a year. What's not to like? Ok, a dividend would be nice! If they start paying a dividend then I see the price climbing a lot over the coming years. I think I'll hold. I'm free running my SLR shares anyway after getting my money back from 15c. Why the down-sell from the market? How many other companies are in such a good financial position with such a steady income flow?
Don't know if the market is just acting irrational as they normally do or if there is something deeper that I'm missing, because i thought it looks ok.
SLR's current market cap is $330M. If they can crack $440M then they'll sneak into the ASX200, at which point they get on everyone's the radar. And as mentioned, if they start paying a dividend then I expect the price to move up substantially.
It's only going up from here! You'll be hard pressed to find a more impressive financial position. Zero debt, 104M in cash an bullion, and literally pulling tons of gold out of the ground a year. And they have a mine called Cock-Eyed Bob!, what's not to like? With cash up 56%, there has to be more pressure on the board to start paying a dividend, surely.
Please Sir, may I have a dividend... $123M in cash and gold, and zero debt Why is that any other company in any other market in that position would be lauded as a bargain buy, but in the gold sector, meh.
Punched to $1 today. A big price level, if it pushes past $1 who knows where to next! Both SLR and Gold are at major price points where things can get very exciting very fast.
The price jumped up yesterday before the big announcement of a "Spectacular" gold find this morning, people knew.
People in the know always know before an announcement, this is true with every stock ever. Also had to do with GDXJ (VanEck Vectors Junior Gold Miners ETF)