The balance sheet impact will depend on how the purchase price is allocated, and to a degree whether the seller is considered a related party (i.e. the issue of predecessor cost. If not a related party, the purchase price would be allocated to land,buildings, perhaps infractructure and mineral rights. However if no reserves on the property, which in USA generally requires a feasibility study, then the acquisition cost for non tangible assets would be impaired and expensed.
Is it worth $3 million ? Without a reserve study showing NPV and IRR hard to be precise in value. One method would be estimated resources,less cost to develop to reserve status, and then compare market capitalization now and forecast compared to other companies with similar potential or actual resources. This of course is very inexact.One must assume management believes this price is a reasonable one that is accretive to
shareholders. We dont have a recent update on recent economics or a formal NI43-101 report, or even a description per SEC Guide 7,so I havent a clue how one would determine whether $3 million a recent price.
Since company didnt raise $3 million according to recent (or lack of ) filings, will be interesting what final deal is.
