bayview, how about a post, you're overdue...
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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...
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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).
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