China looking for Brazilian Gold
Jaguar Mining Inc. (NYSE:JAG) is exploring its options after receiving acquisition proposals, proving that even a record takeover premium for a Gold company can be a bargain.
Shandong Gold Group Co. (SS:600547) owner of China's 2nd-largest Gold producer, offered to buy Jaguar for US$785-M in cash.
The 9.30/shr bid is 77% more than Jaguar's prior 20-Day average, the highest premium in a cash takeover of a Gold miner greater than US$500-M, according to data.
Jaguar is trading at a 3.5% discount to its net asset value, cheaper than 94% of comparable Gold miners.
While Jaguar lost money in each of the past 7 yrs, the New Hampshire-based operator of 3 Gold mines in Brazil's Iron Quadrangle region is projected to earn its 1st annual profit in Y 2012, according to analysts' estimates.
After Gold prices reached a record of 1,921.15 oz in London on September 6th, potential rival bidders such as Kinross Gold Corp. (NYSE:K) may be willing to pay more than 9.30/shr to secure Jaguar's 4.26-M ozs of Gold reserves.
JAG closed trading Friday at 7.70/shr, +0.17 (2.26%).
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.