Hello amarksp,
I've also been trying to figure out whether AAU or CKG is the better buy. I think the easiest way to compare the two, is to see how much a share of CKG will cost by buying AAU once all the warrants and rights have been exercised and paid for.
Right now, one can buy all the outstanding shares of AAU for $64m, exercising the warrants will cost $8 x 4.5m = $36m, and exercising the rights will cost $1 x 9m = $9m, for a total of $109m. In exchange, one receives a total of around 22.4m shares of CKG, so each share of CKG ends up costing $4.87.
The discount isn't much, but only $64m / 22.4m or $2.86 per share gets paid up front, the rest gets paid at some later date.
It will be interesting to see how the warrants and rights will be valued between now and when they are exercised.
John.
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