Hochschild Mining to Raise up to $250M to Further Investment in Gold Resource Corporation, and others
Gold Resource Corp Makes New All Time High $8.00
Hochschild has the right to increase its stake in Gold Resource Corporation (“GRC”)from 24% to 40%, with the full support of the GRC board. GRC, which has a current market capitalisation in excess of $315 million, is a precious metals mining company with a number of 100% owned, high grade development projects in southern Mexico including the El Aguila project. This project is scheduled to begin production by the end of 2009 and the company expects to produce approximately 70,000 ounces of gold (4.2 million silver equivalent ounces)in its first full year of production. Hochschild is extremely confident about the long term potential of this investment. After the standstill period ends in February 2011, Hochschild can purchase additional shares in GRC without restriction.
Link:http://news.goldseek.com/FeaturedPR/1254927338.php
Disclosure: LONG GORO
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And here it goes….
1) The float is about to get real tight and still have pressure buying from Hochschild. I don’t know what Hochschild was thinking making an announcement because GORO shares just witnessed a giant sucking sound that is the sound of shareholders pulling them back in. Why sale for 8.00 when you know you get 15.00$?
This is one for the ages, good call!
Yes, now all they have to do is get the damn mine into production already
Once they show a sub $100 cost/oz stock will be $12-15.
GORO will get there. What awaits is possible 1500$ an ounce by the 3rd qtr. Me? I am like a kid at Christmas with 700 gold and up. It’s all extra profit at this point.
But it’s got to be done—
I have no doubt, but it is what it is. The market cap is very high given no production. Sort of like paying a lot for a #1 draft pick before you see how he plays in the NFL We need to see them in a game to see what their true future worth will be. I’ve been in GORO since it was literally $1. My only annoyance is why they can’t give investors some sort of time line for initial production. They have to know by now when it will be down to a week or two.
Ian, Is it possible for to give us an update on Hochschild impact. Where do we currently stand and how will they get to 40%?
Will insiders give up shares in a block to allow Hochschild to get to 40%? Could it be a mix of block trading and open market purchase?
I assumed a few things that were dangerous. One of them was that GORO longs would not settle for anything below 20% for the majority of their holdings in the stock. The other was that Bill Reid could controll the float through loyal shareholders and prevent Hochschild from going for the 51% in Feb of 2011. But the above are prolific events that have a chance to change to the outcome of the game.
Please elaborate if you get the time…
Big fan of the site
Don
Don:
The Hochschild issue if you want to call it that falls under the “good problems to have” category. I think many are spending too much time worrying about it. The short answer is yes, they can try to get blocks from insiders or from other hedge/mutual funds to get their percentage. I know the Reids well and I know they most likely won’t be selling their stock to them anytime soon. Also, Hochschild is considered an active investor since they have aboard seat already so they would have to file a form 4 if they bought any shares. Since I haven’t seen any form 4 buys, I assume they haven’t bought any shares yet in the open market, so they are still at whatever their percentage is right now…
Again, I wouldn’t worry about this issue, as most other companies wished they had this problem..
IC
Thanks for your reply Ian.
I really wish we were in production so I could get the full benefit of these extreme gold and silver prices. It’s so hard to pinpoint a time horizon for our production but I don’t believe we will have the huge ramp up like the giant open pit projects that process 12,000 plus tonnes of ore a day. From what I can gather we are about 3 weeks from start up and about another month of training and synchronizing the mill for full commercial production. Does that make sense to you? I would guess longer but we are going straight into concentrate form instead of dore bars. I’ve seen some of the bigger miners take up to 6 months but they are processing about 15X the amount of rock we are. 1150 tpd should be achievable surprisingly quick. That’s tiny compared to others. I knew of a 500 tpd that was rocking and rolling in 5 days after hook up. I also knew of a 15,000 tpd that took 5 months after hook up.
That would be 3 weeks to complete the mill which is generous because we excluding a great many steps that the dore requires, 1 month of on the job training and low grade mining and then it’s full go by December. If we can’t accomplish this then their’s a big problem, my opinion only
And by the way, the reward will be worth the wait. Headline grabbing numbers