Some fear there’s nothing there for shareholders
Shares of Tagish Lake Gold Corp. (TSX: V.TLG, Stock Forum) doubled in value to two cents on volume of 1.23 million Thursday after the company reported that it is negotiating an offer to merge with "Yukon-Shaanxi Mining Company Inc." (YSM), a private company, whereby YSM will assume all of the assets and liabilities of both YSM and TLG. The transaction will result in the formation, under the laws of British Columbia, of one corporate entity, proposed to be named "Yukon-Shaanxi Mining Company Inc." which will have its shares listed on the TSX Venture Exchange.
The transaction will involve an exchange of shares of both companies into the newly named entity. The details of such an exchange will be announced as soon as the appropriate ratios have been achieved.
TLG and YSM have 30 days to complete their due diligence.
The transaction will require TSX Venture Exchange approval, as well as shareholder approval at a Special Meeting, followed by Court approval under the Business Corporation Act of British Columbia.
From the news release:
Given the current market conditions, the Company believes that the merger will provide the best opportunity to promote exploration and development of the Skukum property for the shareholders, while assuring that creditors will be treated fairly.
On the TLG BullBoard posters were intrigued but wary.
Under the heading “price”, robertreddeer said, “A .05 cents buyout would put the value of the mine at about $6.5 million. . . then throw in a couple million to cover TLG's debt. . . sounds like a bargain when you consider the potential of the property. . . but again, we're not dead in the water.”
“Mainly Flippers Buying,” said analyzethat. “There isn't much long term buying on this. The flippers are picking them up and dropping them back in at .02. TD is a major flipper and he's jammed in the bids and asks. RBC is flipping also. We need long term stronger hands to pick this up if we are going to see any decent upward moves with any staying power!”
“Based on the price or lack of price movement it seems the deal may favor some management keeping their jobs but shareholders getting virtually nothing! Any details!” asked Curvature.
And under “RE: merger”, roj1998 asked, “What's your thought on this plan roscoe? Is it a good deal for us TLG shareholders? I'm long. Thanks.”
