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Huge volume the past few days...
Anyone have an educated guess or clue as to what is driving the volume...
NEM is likely busy with its Yandal counterparties and related due dilligence, which is more important than the due dilligence in regard to MOY...
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256D3600025523?OpenDocument
Completion of the MOY deal due dilligence is likely being postponed would be my guess, but VERY unlikely it will go past the 120 day deadline: i.e. JULY 22, 2003 by my math...
"It is anticipated that the sale of Ntotoroso will be completed as soon as possible and in any event within 120 days, subject to TSX approval, appropriate due diligence and other regulatory and corporate approvals."
How else can one interpret "and in any event within 120 days"... I see no wiggle room for this deal to go beyond 120 days based upon this statement...
Alamos proxy statement is now out...
Find it interesting that there are no over 10% owners..., thought at least one gold fund would have accumulated a sizeable position...
"To the knowledge of the directors and senior officers of the Company, there are no persons or companies
who beneficially own, directly or indirectly or exercise control or direction over shares carrying more
than 10% of the voting rights attached to all outstanding shares of the Company."
full proxy here:
http://www.alamosgold.com/i/pdf/InfoCirc2003AGM.pdf
CUMBERLAND RESOURCES (CBD : TSX : C$2.55) - SPECULATIVE BUY - 12-MONTH TARGET PRICE: C$3.75
Graeme Currie
Comment: Cumberland discovers kimberlite pipe at the Meliadine East property
On the Meliadine East property, Cumberland and 50/50 joint venture with Comaplex Minerals (CMF : TSX) announced yesterday that the first hole in a diamond exploration program intersected kimberlite that is interpreted as a pipe. The vertical hole terminated in kimberlite at 100 metres depth, giving a core interval of 85.4 metres of kimberlite. We understand that
the sample is to be processed by caustic dissolution for analysis of diamond and diamond indicator minerals. The current program is designed to test a total of 11 targets as defined by geophysics and, in some cases, down-ice indicator samples previously completed that had yielded kimberlite indicator minerals. Cumberland's discovery of a kimberlite pipe adds to, or enhances, firstly the general district and secondly the
speculative leverage of this junior. We maintain our SPECULATIVE BUY recommendation with a target price of $3.75/share. Cumberland remains a top recommendation
"greatly understated"???
guilty as charged...
bayview, how about a post, you're overdue...
_____________________
I'm sticking with my story:
No cash, no royalty, but 60%-75% of the NEM stock will get distributed to shareholders...
The real question: "Is there any likelihood whatsoever that MOY has any skeletons in the closet that NEM discovers during its due dilligence"? What is the probability of skeleton(s) in the closet... My recollection is NEM and MOY were in a joint venture on this mine to begin with, so NEM due dilligence turning up anything would seem very remote?? Any comments appreciated !!
Another risk is time...; about 60 days have past and the NEM due diligence scheduled to end within 120 days... Any thoughts or any way NEM would extend its due diligence deadline... I can think of no good reason, but would appreciate comments...
The final risk is NEM share price, but NEM share price is performing admirably AND the $24.50 collar minimizes this risk...
__________________
The math remains the same (except NEM stock price has risen a bit above $28):
$20,000,000 NEM consideration
$25.50 share exchange rate
784,314 total NEM shares to MOY
70.00% assumed % distribution to MOY shareholders
549,020 share distribution to MOY shareholders
26,414,014 MOY shares o/s
0.020785164 NEM shares per MOY share
$28.00 NEM share price
$0.58 arbitrage value of MOY share in US$
(Per my understanding of the press release, MOY can take its $20M payment from NEM entirely in NEM shares at $25.50 exchange rate. This equates to 784,314 of NEM shares. My assumption/best guess is MOY will distribute about 70% of these NEM shares to its shareholders, thus 549,020 shares will get distributed. Since MOY has 26,414,014 shares outstanding, this equals .0207 NEM shares per 1 MOY share. And since NEM is trading at $28, that makes the arbitrage value of MOY shares US$.58).
Frank Timis has resigned
view this as a positive given Timis past...
______________
Toronto, Ontario, May 20, 2003 -- Mr. Oyvind Hushovd, Chairman of the Board of Gabriel Resources Ltd. ("Gabriel"), announces that Frank Timis has resigned as a director of Gabriel, effective May 16, 2003, in order to devote more time to his other business interests. Mr. Timis will continue
to assist Gabriel, as an independent consultant, in connection with the development of the Rosia Montana project.
The Board of Directors of Gabriel expresses its appreciation to Mr. Timis for his vision, determination and dedication in establishing Gabriel and in bringing it to its present stage of development.
Gabriel is a Canadian based resource company engaged in the exploration and development of mineral properties in Romania and is presently continuing the development of its 80% owned world class Rosia Montana gold silver project in Romania.
On Behalf of the Board:
Signed by "Oyvind Hushovd"
OYVIND HUSHOVD
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
link to letter:
http://www.sedar.com/csfsprod/data37/filings/00540035/00000001/w%3A%5C3w_out%5C25202%5Cmda.pdf
text:
Message to our Shareholders
On March 24, 2003, your Company announced that it had signed a letter of intent to sell its interest in the Ntotoroso property to Newmont Mining Corporation. A 50/50 joint venture between Moydow and Newmont, the Ntotoroso property is located on the Ahafo or Yamfo-Sefwi belt in Ghana, West Africa.
Initial consideration to Moydow for its interest in Ntotoroso will be US$20 million, of which Moydow will have the option of receiving up to US$2 million in cash and the balance in Newmont shares. The deemed price of the Newmont shares will be determined three business days before closing but will not exceed US$25.50 or be less than US$24.50. In addition, Moydow will receive a 2% net smelter return royalty in respect of all gold and silver production from the Ntotoroso property in excess of the currently defined reserve of 1.2 million ounces.
In the past weeks your Company has been actively working with Newmont on due diligence and arranging the corporate structures necessary to complete the transaction. It is expected to complete the proposed transaction within the original timeframe of 120 days.
The regulatory authorities require that the consolidated financial statements for the year ended December 31, 2002 be filed by May 20, 2003. The Company anticipates that a combined annual meeting/special meeting will be held in late July 2003. This will allow time for the preparation of the final transaction agreement and information circular/annual report and the completion of all legal and regulatory matters. Further announcements will be issued as things progress.
It is the intention of the Company that a major portion of the initial consideration be returned to the shareholders in a tax-efficient manner.
Once the sale of Ntotoroso is completed your renewed Company will be well funded and in a unique position to take advantage of the many opportunities that will undoubtedly arise. The Company plans to begin drilling on the very prospective True Grit property in Newfoundland within the next month. In addition, several new projects are currently being assessed with a view to an aggressive exploration program commencing in the next few months.
The management and the Board of Directors wish to thank its shareholders for their loyal support and together we look forward to closing the transaction with Newmont and to further exploration successes.
“Signed”
Brian Kiernan
President and Chief Executive Officer May 12, 2003
Note 9, subsequent events leaves much to be desired...
Need to find that letter you mentioned, this would seem to confirm what I was told, i.e. 60% - 75% distribution to be made to shareholders via NEM stock (and my hunch remains this will total about Can$.80 per share).
here is the link:
http://www.sedar.com/csfsprod/data37/filings/00540033/00000001/w%3A%5C3w_out%5C25202%5Cfinst.pdf
also, FWIW, GBG will release their annual financials today or tomorrow...
marcos: thirteen holdouts
Asked this in prior e-mail, are these holdouts persons, family units, or what??? Looking at the village picture of Mulatos, there does not seem to be much of a village there.
Please advise whether the 13 holdouts are persons or something else... Thanks!
marcos, thanks for this post, very informative:
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18951785
Here's a bit of history on the subject, for those of you, like me, that need a better understanding of "ejidatarios":
"The Agrarian Reform Act of 1915 and the constitution of 1917 laid the groundwork for dramatic changes in Mexico's land tenure system. These documents established that the nation retained ultimate control over privately held land, which could be expropriated and redistributed in the public interest to campesinos.
The ejido , or communally farmed plot, emerged as the uniquely Mexican form of redistributing large landholdings. Under this arrangement, a group of villagers could petition the government to seize private properties that exceeded certain specified sizes--initially 150 hectares for irrigated land and 200 hectares for rain-fed holdings. Assuming a favorable review of the petition, the government then expropriated the property and created an ejido . The state retained title to the land but granted the villagers, now known as ejidatarios , the right to farm the land, either in a collective manner or through the designation of individual parcelas . Ejidatarios could not sell or mortgage their land but could pass usufruct rights to their heirs. Ejidatarios had to work their land regularly in order to maintain rights over it."
more here: http://www.guide2mexico.com/content/mexsocie.htm
Marcos, assuming there are 75 ejidatarios and the payment was $350,000 per year, does this mean $4,666 went to each ejidatarios. Is an ejidatarios a single person or a family unit? Just curious on how the $350,000 gets distributed...
Since AGI wants to cut the total payment from $350,000 to $52,000, this would work out to a reduction of $4,666 per each ejidatarios to $693 each..., that's quite a reduction...
Also Marcos, could you better explain your comment:
"Long story short - the government will have Mulatos mined, period, with even a simple majority of ejidatarios, never mind a five to one majority".
How does the Mexico government come into play, is this the national or state government of Mexico? Legally, how does the national or state goverment come to play a role at all in determining whether the Mulatos mine is developed or not?
Thanks for your time and any comments on this matter.
where or where art thou Moydow...
Canada market closed on Monday for holiday..., so no SEDAR filing on Monday...
In the meantime, hope this NEM analysis holds true...
http://news.goldseek.com/SAGolds/1053278747.php
okay, reviewing the prior 2 years annual filings:
http://www.secinfo.com/$/SEC/Documents.asp?CIK=1000003561&Party=BFOS&Type=CA+AFS&Label=A...
MOY had its annual financials released on 5/17/02 for 2001 and 5/22/01 for 2000.
FWIW, Great Basin (GBG.v) also had its annual financials released on the same identical dates, 5/17/02 for 2001 and 5/22/01 for 2000.
http://www.secinfo.com/$/SEC/Documents.asp?CIK=1000004256&Party=BFOS&Type=CA+AFS&Label=A...
I thought/think the the deadline for the company to file is always on May 15th, so maybe it takes a few extra days for the regulatory agency to review and then formally file... In any event, based on prior 2000 and 2001 annual filings, looks like it could be a few more days before we have anything new to read...
Do not know..., guess you could...
One recourse as a shareholder would be to vote against the retaining the current auditor (PriceWaterhouseCooper) ... But I doubt it is PWC's fault as much as it is the attorneys, and you do not get to vote against the attorneys...
Part of the problem may be that MOY had a change of auditors from KPMG to PriceWaterhouseCooper effective first quarter 2002, thus this will be first year under PWC, and thus PWC taking a bit longer to get this annual filing done...
http://www.secinfo.com/CSA/000035/61-004/00436413-00000001-00003561-003.pdf
The likely holdup is how best to disclose the NEM deal and the "hoped for" distribution to shareholders. Report this inaccurately and both the auditors and lawyers will be subject to lawsuits.
FWIW Russ, I note you also follow GBGLF. GBGLF also will likely make its annual filing deadline today, waiting until the last day because of the SouthGold acquisition and the necessary disclosures for that deal...
Do not know..., guess you could...
One recourse as a shareholder would be to vote against the retaining the current auditor (PriceWaterhouseCooper) ... But I doubt it is PWC's fault as much as it is the attorneys, and you do not get to vote against the attorneys...
Part of the problem may be that MOY had a change of auditors from KPMG to PriceWaterhouseCooper effective first quarter 2002, thus this will be first year under PWC, and thus PWC taking a bit longer to get this annual filing done...
http://www.secinfo.com/CSA/000035/61-004/00436413-00000001-00003561-003.pdf
The likely holdup is how best to disclose the NEM deal and the "hoped for" distribution to shareholders. Report this inaccurately and both the auditors and lawyers will be subject to lawsuits.
FWIW Russ, I note you also follow GBGLF. GBGLF also will likely make its annual filing deadline today, waiting until the last day because of the SouthGold acquisition and the necessary disclosures for that deal...
To file timely with SEC/SEDAR I believe a public company must file its calendar year end fiancial statements by May 15th. MOY could file for an extension, but this is rarely done would be my understanding and experience. Generally when push comes to shove, the auditors and attorneys will meet the deadline without an extension.
Further, since this deal was announced after year end and before MOY's year end filing, the NEM deal must be FULLY disclosed as a subsequent event in the annual filing, this would be my experience and expectation. This subsequent event disclosure should make for good reading and provide us with specific details on how this deal will proceed and close, likely with 90%+ confidence level...
The MOY tax attorneys, auditors and regulatory filing attorneys have had over 6 weeks, more than enough time IMO, to get this done. If they file timely as I expect, it could still be well after the close on the 15th and not publicly disclosed on SEC/SEDAR until the morning of the 16th.
this research report dated 3/19/03 is of interest:
http://www.alamosgold.com/i/pdf/McFarlaneGordon-AGI-19Mar2003.pdf
GAMEPLAN:
Alamos Gold has yet to establish a final mine plan or project scope. Currently, the company is progressing with a Mulatos gameplan as follows:
1. The company would like to resolve the issue it has with the Ejido relating to the holding costs for surface rights to the mine area. This issue revolves around the agreement Placer Dome entered into with the Ejido that called for payment of US$350,000 per year and required Placer to hold the surface area related to this payment for 6 years. After the 6th year the company had the right to reduce the acreage. The sixth year having passed, AGI cut back the landholding and adjusted the payment down to US$52,000, and the Ejido challenged the
reduction. A judge is expected to rule in the next 1-2 months on the right of AGI to reduce landholdings and payments.
2. The company would like to complete its metallurgical work which is projected to require 6 months and involve sampling the underground workings through existing tunnels at Mulatos. Choosing the ideal crush size to optimize recoveries at reasonable cost is the focus of this study.
3. The company would like to complete an in-house feasibility study that would call for contract mining of 12,000 tonnes of ore per day to produce annually 150,000 ounces based on the PAH study parameters with improved recovery and targeting the larger orebody.
4. The company would like to start production at Mulatos on a small scale, self mining about 1,000 tpd, to garner knowledge on optimization of the leach process through sorting of the mined material. Again, improving recovery rates is the focus of this initiative. This mining phase is expected to commence early
spring 2004.
FWIW, an announcement today would have been my guess, guess I was wrong...
Still believe we will hear news by the 15th, but we'll have to wait and see...
Hopefully, we do not have the tax lawyers and auditors holding this distribution up too much longer as they rack up their professional billing hours trying to bilk as much cash out of MOY as possible.... Yes, there will have to be a legal and tax opinion prior to any hoped for distribution... Never underestimate the attorneys and auditors ability to make a simple distribution into a 100 page plus document, the 500 page plus Corner Bay merger with PAAS was the epitomy of overkill by lawyers and auditors...
But one has to assume that they MUST get their act together to make the annual 2002 filing by May 15 deadline, and that the distribution news, if any, would be included with their annual filing... Here's hoping...
that was my interpretation...
late this week or early next...
Romanians have figured out capitalism:
Would you believe Romanian Businesses in the mine area have been under-reporting their net income to Romanian tax authorities...?? So now Gabriel will simply pay them 20% more (or $3000) to take this into account!!
This resettlement process interests me, first planting trees and adding on to their houses to get more money from Gabriel. And now advising Gabriel they have been cheating on their income taxes to get more money!!
These Romanians have learned capitalism pretty quickly...
http://www.rosiamontanagoldcorp.com/eng/gazette/volume9-1.pdf
got a partial fill @ US$.545
Quotes from the press release:
[Commenting on the proposed transaction Mr. Kiernan said "This is a great deal for both Moydow and our partner Newmont. The up-front component will ensure immediate value for our shareholders and the net smelter return royalty allows us to participate in any upside on the property".]
When MOY says "The up-front component will ensure immediate value for our shareholders", I for one believe them...
_______________________
[Initial consideration to Moydow for its interest in Ntotoroso will be US$20 million, of which Moydow will have the option of receiving up to US$2 million in cash and the balance in Newmont shares.]
The way I read this is MOY can take the entire $20M in NEM shares???
_______________________
The deemed price of the Newmont shares will be determined three business days before closing but will not exceed US$25.50 or be less than US$24.50.
The way I read this is MOY shares should have risen 10% along with the NEM shares ($28/25.50=10% gain)
_______________________
In addition, Moydow will receive a 2% net smelter return royalty in respect of all gold and silver production from the Notoroso property in excess of the currently defined reserve of 1.2 million ounces.
This 2% NSR valued at $0...
_______________________
I am a glutton for punishment, fill my order please...
Here's the math:
$20,000,000 NEM consideration
$25.50 share exchange rate
784,314 total NEM shares to MOY
70.00% assumed % distribution to MOY shareholders
549,020 share distribution to MOY shareholders
26,414,014 MOY shares o/s
0.020785164 NEM shares per MOY share
$28.00 NEM share price
$0.58 arbitrage value of MOY share in US$
Per my understanding of the press release, MOY can take its $20M payment from NEM entirely in NEM shares at $25.50 exchange rate. This equates to 784,314 of NEM shares. My assumption/best guess is MOY will distribute about 70% of these NEM shares to its shareholders, thus 549,020 shares will get distributed. Since MOY has 26,414,014 shares outstanding, this equals .0207 NEM shares per 1 MOY share. And since NEM is trading at $28, that makes the arbitrage value of MOY shares US$.58.
Of course the math above assigns $0 value to MOY $800K cash in bank, the NEM NSR royalty, and Botswood/other properties, etc.
MOY share price is now below what my best guess is what the NEM distribution will be... The key variable remains, will MOY make a significant NEM share distribution (i.e. around 70%)? My hunch is they will, and the current share price is some kind of very bad joke... FWIW, I have not been filled on my MOY order today at US$.54 which is over and above the Can$.75 ask quote.
I am either...
1) Going to sell my NEM and keep MOY, or
2) Going to sell my MOY and keep NEM...
Need to free up some funds... Which way I proceed will depend on price MOY is trading after the hoped for distribution.
Agree...
This should be a good speculation, but I believe upside will be limited, stock will drop like a lead ballon (under cash value??) once it trades ex-distribution. Hoping for a quick 20% ROI here..., nothing more...
FWIW, e-mailed Paul van Eeden a copy of my post and received the curt and sincere reply "Thanks." Actually, I think van Eeden is a reasonably good analyst, have e-mailed him before, and have read him on miningweb and his old, not lately updated website at pve.net. His alleged comments prompted my call, are we sure for a fact he issued those comments? Please advise as his e-mail reply to me left something to be desired.
Hopefully, this works out and I remain optimistic per my phone call, but as you know, no guarantees... As posted, I stand by my Can$.80 distribution prediction per my understanding; and note from a bit of further research that $.80 was the most recent PP offering price. It seems to make sense that the prior PP holders will get out whole plus maintain their existing shares; otherwise they would likely NEVER do a deal with MOY again..., and MOY will eventually need to go back to the trough...
Moydow update...
Called the company and here is my understanding:
1) Expect announcement in next 15 days on how Moydow will proceed (will not be this week in all likelihood, but most likely within 10 days).
2) My belief is MOY will distribute 60% to 75% of NEM shares and/or cash to MOY shareholders while retaining the rest within MOY as an investment (until sold to generate cash proceeds). My gut feel is MOY shareholders will likely get Can$.80 or a bit more as a distribution/dividend.
3) MOY will likely retain all the NEM royalty payments.
4) MOY will use NEM proceeds they retain for drilling programs at Botswood/Cornerstone earn-in as well as for certain other properties they still own in Ghana. They are not disposing all of their Ghana properties, they could even purchase more property in Ghana, MOY will continue to do business in Ghana.
5) Hold up appears to have been caused by certain Ghanian tax issues, appears there was more complexity to keep this transaction tax free than they originally thought...
6) MOY will be issuing their financial statements on or before May 15 deadline and there is a good chance that both the annual financials and the shareholder distribution announcement will be released together, IMO.
That's my understanding and I am sticking to it, until proved right or wrong...
OT: Russ Winter RE: CHK
Good presentation today by CHK:
http://media.corporate-ir.net/media_files/NYS/chk/presentations/IPAA_03.pdf
You may have to register first to view this pdf file:
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=chk&script=1010&item_id=735769
What is your current opinion on REM? Please advise. Thanks!
full transcript from meeting...
http://www.gabrielresources.com/i/pdf/GBR-apr232002-Transcript.pdf
should not have much longer to wait...
Likely all decisions will be made on or before the annual shareholders meeting. Last year, meeting was announced on 4/15/02, record date 5/6/02 and meeting held on 6/13/02. In 2001, meeting announced 4/12/01, record date May 10, and meeting held on 6/28/01.
Would expect the meeting to be announced in the next two weeks and likely held in June 2003. In our dreams, we can wish for a shareholders vote on how to distribute the NEM stock and cash...
thanks bayview...
Rocketred
I see you have done your homework... Hurry up, make my day and short this thing...
<Add cash back in if you use it in your calc.>
As far as the warrants, do not believe it is reasonable to add this money back in, am assuming worst case. MOY will likely keep this cash and will not distribute to shareholders. I desire to make a profit on my "assumed" NEM distribution alone, and value everything else at $0 (i.e. Botswood, cash on hand, NSR), and plan to be pleasantly surprised on any value there.... What would really make my day is if MOY announced a plan to distribute the future NSR to shareholders... Would love to have royalty checks sent to me directly... IF MOY announces future NSR distributions to shareholders as well as NEM stock, I would be buying all the MOY shares I could lay my hands...
Added some MOY shares today, but have not shorted NEM to lock in the arbitrage yet. Believe NEM may rise towards $29 at which time I will lock in the arbitrage...
Finally, is it reasonable to assume MOY will accept 100% NEM stock and no cash if NEM is trading well above $25.50? This would seem logical...
NEM earnings writeup, mentions MOY
http://www.mips1.net/422567CB004DBB8F/UNID/TWOD-5L3TDZ?OpenDocument
also, about the FMV of MOY...
Let's keep it simple:
$18M in NEM Stock
26.4M shares
= US$.68 per MOY share value = Can$1.01
(excluding the NSR, $2M cash, Botswood, etc.)
(also will not include the C$1.00 warrants, although you can likely assume these will be exercised, IMO, and the proceeds not distributed to shareholders)
(also assuming NEM remains in the $24.50-$25.50 collar)
bayview/russwinter
Do we know for a fact that MOY shareholders will receive NEM shares as a distribution. That is, do the NEM shares go to the company (MOY), or direct to MOY shareholders? Please advise. How sure are we of this fact?
Are we sure that the $2M cash (assuming this partial cash option is taken) will be distributed to shareholders?
I would assume the 2% NSR will go to the company (i.e. MOY) and not to shareholders? Are we sure of this or not? Please advise.
Would appreciate some comments here... Successfully arbitraged the BAY.to merger with PAAS, and this MOY merger arbitrage appears viable. Accordingly, am considering buying more MOY and shorting an equivalent position in NEM. Thanks for any input...
also: Moydow Mines has 27,714,014 shares outstanding and Newmont owns approximately 1,300,000 shares in Moydow. As part of the proposed transaction Newmont has agreed that its Moydow shares will not participate in the transaction and will be cancelled at the time of closing.
Moydow to Sell Ntotoroso to Newmont for US$20 Million
TORONTO, Mar 24, 2003 (BUSINESS WIRE) --
Brian Kiernan, President and CEO of Moydow Mines International Inc. (TSX:MOY) is pleased to announce that it has signed a letter of intent to sell its interest in the Ntotoroso property to Newmont Mining Corporation.
A 50/50 joint venture between Moydow and Newmont, the Ntotoroso property is located on the Ahafo, or Yamfo Sefwi belt in Ghana, West Africa.
Initial consideration to Moydow for its interest in Ntotoroso will be US$20 million, of which Moydow will have the option of receiving up to US$2 million in cash and the balance in Newmont shares. The deemed price of the Newmont shares will be determined three business days before closing but will not exceed US$25.50 or be less than US$24.50. In addition, Moydow will receive a 2% net smelter return royalty in respect of all gold and silver production from the Notoroso property in excess of the currently defined reserve of 1.2 million ounces.
Commenting on the proposed transaction Mr. Kiernan said "This is a great deal for both Moydow and our partner Newmont. The up-front component will ensure immediate value for our shareholders and the net smelter return royalty allows us to participate in any upside on the property".
Moydow Mines has 27,714,014 shares outstanding and Newmont owns approximately 1,300,000 shares in Moydow. As part of the proposed transaction Newmont has agreed that its Moydow shares will not participate in the transaction and will be cancelled at the time of closing.
It is anticipated that the sale of Ntotoroso will be completed as soon as possible and in any event within 120 days, subject to TSX approval, appropriate due diligence and other regulatory and corporate approvals.
Romania
Forecast
Feb 19th 2003
From the Economist Intelligence Unit
Source: Country Forecast
Romania's invitation to join NATO has boosted the political standing of the ruling Social Democratic Party (SDP). However, the SDP's popularity is likely to wane as it continues to implement unpopular reforms, although the Economist Intelligence Unit expects it to win the next election, in late 2004 or early 2005. The terms of the IMF stand-by loan will continue to shape economic policy, with the emphasis being on fiscal consolidation, and on the restructuring and privatisation of state enterprises. Real GDP growth is forecast to pick up only slightly in 2003, to 5%, compared with an estimated 4.9% in 2002, before strengthening further to 5.3% in 2004 as investment growth and private consumption growth accelerate. Year-end inflation is forecast at 13.7% in 2003 and 11% in 2004. We expect the current-account deficit to rise to 5% of GDP in 2003, as strong investment growth spurs imports, before falling slightly to 4.5% of GDP in 2004, reflecting an expected drop in international oil prices in combination with continuing strong import growth.
Key changes from last month
Political outlook
The government has yet to decide when to hold the next elections, but passions have cooled on this issue, with the prime minister, Adrian Nastase, and the president, Ion Iliescu, agreeing that the next presidential and parliamentary elections should be held separately, at an interval of several months, in late 2004 and early 2005, respectively.
Economic policy outlook
The IMF board may discuss the release of the fourth tranche of Romania's stand-by loan in early April, with approval for the loan depending on the government meeting stringent targets for public-sector wages.
Economic forecast
We have revised upward to 4.9% our estimate of real GDP growth in 2002, following the pronouncement of growth estimates of 5.2% from the Ministry of Development and of 5% from the National Bank of Romania (NBR, the central bank). Following a strong fourth-quarter performance, we estimate the 2002 current-account deficit at US$1.7bn, or 3.8% of GDP.
Romania, political risk...
read last paragraphs
_________________
We still rather like the Americans
Jan 30th 2003 / PRAGUE AND WARSAW
From The Economist print edition
Feelings about the United States are warm but changing
A CLUTCH of conservative parties in central Europe recently launched a joint attack on anti-Americanism in the region. It was left-wing governments, they said, that were threatening “Euro-Atlantic civilisation” by spreading hatred of the United States.
Really? Poland and Romania, the region's two most populous countries, are both run by ex-communist governments that are also probably its two most pro-American ones. Although Poland's prime minister, Leszek Miller, was in his country's last communist-era Politburo, it was he who happily gave the go-ahead, last month, for the largest purchase of American military hardware ever made by a former Warsaw Pact country. In so doing, his government annoyed several European countries by turning down their companies' bids in favour of a fleet of American F-16 fighters costing $3.5 billion.
“Europeans should buy European,” muttered a French businessman, whose Mirage 2000 was an unsuccessful bidder. “This decision was made purely on political grounds,” moaned an advocate of the Swedish-British Gripen fighter that is cheaper than the F-16 but just as high-tech. The Gripen bid included an offer to build an assembly plant in a depressed part of Poland, with knock-on jobs for up to 50,000 people. But the Poles reckoned that failed to outweigh the apparent advantage of ensuring continued American industrial-military engagement in the region.
Most people and governments in central Europe remain instinctively pro-American. Tales of émigrés returning from across the Atlantic, the enduring potency of the American dream (not to mention its pop culture), a residual fear of the Russians and a consequent desire to join NATO: these all still foster friendly feelings towards the Americans. A trio of central European countries—Poland, Hungary and the Czech Republic—are already in the alliance; another seven have been invited to join, probably in 2004. But the biggest reason for pro-Americanism is still sheer gratitude. The Americans did most to win central Europe's freedom from the Russian yoke, then did much to bankroll the first years of the post-communist transition.
Still, things do change. In 1990, the Stars and Stripes was most visible amid foreign flags. Money-changers did most of their trade in dollars. Street vendors sold American jeans. Nowadays, the flags are more often the EU's blue and gold. Jeans are more likely to be bought with credit cards issued by European banks in shopping centres with names like Europark and Europlex. America has become less prominent in business and in investment. EU countries account for three-quarters of the region's trade. People in once-communist countries may still like the Americans. But they increasingly also like being Europeans.
Where American influence still prevails is in defence. In this regard, most of the EU's new entrants are likely to be closer to Britain than to France. But in foreign policy the former communist countries look closer to the French and the Germans. Whatever their governments say, most people in central Europe are loth to encourage the Americans to bash Saddam Hussein, especially without a new UN mandate. Even the Poles, who are the region's most martial nation as well as its most ardent pro-Americans, are reluctant to endorse an American attack; a recent opinion poll found that only 4% thought the United States should go ahead on its own.
Public support for American foreign policy has become most tepid in the former Austro-Hungarian parts of Europe, including Slovenia, Croatia, Slovakia and the Czech Republic, where German influence is increasing. Although the historical memory of the Soviet invasions of Hungary in 1956 and Czechoslovakia in 1968 still stirs pro-American feelings, a more recognisably European mindset has emerged since the early 1990s. Many editorials in the region's papers depict President George Bush as a lightweight and accuse his administration of being driven by a desire to get hold of Iraq's oil. Though the Czechs' outgoing president, Vaclav Havel, this week joined other European leaders in signing a letter praising the Americans, only 13% of his compatriots say they would endorse an American attack on Iraq without a UN mandate.
This is not to say that anti-Americanism in the former Austro-Hungarian empire is anything like as strong as it is, say, in France and (at least over Iraq) Germany. There are few votes to be won by bashing Mr Bush. And the idea of a European defence identity still attracts little enthusiasm; NATO is still the name of the new game. The Czechs, moreover, are keen to shed their reputation in the Pentagon as fair-weather friends: soon after their country joined NATO, in 1999, its government was reluctant to let American aircraft fly over it on the way to bomb Serbia. More recently, at the Americans' request, the Czechs have been quick to beef up a 250-strong chemical-warfare unit in Kuwait.
The Americans' influence may be more durable in the poorer parts of the old Soviet empire. In November Mr Bush got a wildly joyful welcome in Romania, where he addressed a huge crowd. These days he would be unlikely to address a similar open-air rally in France or Germany. Romania, by contrast, has strongly supported his policy since the attacks of September 2001; the Romanian intelligence service has passed on useful information about al-Qaeda, and Romania's foreign minister, Mircea Geoana, a former ambassador in Washington, is fiercely pro-American.
Elsewhere in central Europe, pro-Americanism is less strong than it was. If the Americans do fight Iraq, most of the bigger countries will rally round. But they are slower to see the Americans' case than they would have been a decade ago.