Value Microcaps Junior Miners

[cl001]

I hear of LRR before, I believe it is good undervalued company. The Kinross payment can easily top 4 dollar, it is still at 70-80c. Even cash on cash, LRR is a multi bagger.
It looks like a merger of equals. LRR is about 20 million CAD market cap. SMC is about 12 million CAD market cap at 50% premium. The new company will have 40 million CAD market cap.
It is still a tiny company together.
I had long conversations with SMC management this week. It was funny: When I was talking to the CFO he told me he was "expecting an important phone call". When I talked to the VP of exploration, he kept telling me what other mining companies to invest. I knew something is on, but I mis-calculated the timing. I thought something will happen first thing in the new year and I was preparing to buy everyday using the tax loss selling.
Any rate, from my conversation, I think Orosi won't be in production till Q4 earliest anyway. They are having a rainy season in the summer, very bad for construction. That's why they were planning to finish in Q1 of 09. That's why I think Kinross payment probably will carry Orosi without any financing. No financing means no hedge and a lot of more upside! With the $45 million from Kinross, they probably can start the third mine ahead of schedule. That mine is fully permitted as well. But out of production due to earthquake damaged the heap leach. They want to build a mill there.
Orosi is going to be a great mine. When they start to mine the high grade area, we are talking about 200K/year of production easily, maybe 300K/year. In comparison, NXG has a similar prospect, Young Davidson. Its production will be around 150K/year and requires 300 million capex! Imagine a tiny 40 million market cap company with 200+K of gold production! I think the combined company will a winner down the road.
In addition, Kinross has a good chance taken out the combined company for a song.
I have a slightly different perspective vs Bobwins. I believe we are in the very early stage of gold miner recovery. I want to invest in companies that were completely murdered in the bear market for maximum upside. Later on, I can move to more secure producers to take to ride. So far I have been doing great this month, got a 6 bagger of NG, double in AGT and probably SMC. I think the chance is high that both company will rally after the news since it is a good win-win situation. I intend to hold most of my positions.