Now the market has had a month to digest the proposed Cerro purchase the initial response is a big yawn.
The proposed deal is flawed from several angles.
Why exchange paper (dilute) current shareholders to buy a low grade deposit in Mexico?
Why would you say we are going to burn up as much cash as needed to build the mine?
Why not buy an existing producer rather than a brownfield in the Mexican desert?
Many higher grade producers with production can be purchased for similar valuations?
The deal seems questionable since the iinsiders (Goldcorp) seem to be leveraging their own position in Cerro for what reason?
Why the delay 12 months - in building the Cerro mine when CJO has allegedly done all the engineering work?
Did we just buy Cerro to add reserves to the bottom line with little intention to develop the resource?
The share price is stuck in a narrow trading range between $6 - $7. Technically if we fall below $6 then a quick slide down could be in play?
More questions than answers.