VANCOUVER, B.C. -- West African rock is looking prime.
Severstal's implied offer for Guinea gold miner Crew Gold (TSX: T.CRU, Stock Forum) likely will boost prospects for enterprising producers and explorers in those and neighboring countries. Our takeaway: to identify two or three gobble candidates across the gold-lush rock of Ghana, Mali, Burkina Faso, Sierra Leone and Guinea.
As (now Sir) Sam Jonah, former patriarch of Ghana's Ashanti and its flagship Obuasi Mine, told me (five or six years ago, pointing at a map in his Accra office), "There has never been any doubt that Ghana and Burkina Faso and these others have some of the largest and longest-living gold deposits in the world. The properties just require patience and persistence and belief in the possible." (And yes, I still have my notebooks from that and nearly all interviews and mine tours of the past 10 or so years.)
Severstal , a steelmaker controlled by a Russian tycoon, is putting all of its - in this case - kroner on the West Africa table. The London-based Severstal's offer for the rest of Crew Gold it does not already owns amounts to a takeover offer that is some 80 percent richer than the entry price of merchant bank Endeavour Financial's purchase of a month or so ago. Please see details.
Endeavour Financial (TSX: T.EDV, Stock Forum) of Vancouver and the Cayman Islands is the bank that gobbled 37 percent of Crew's shares at far cheaper prices than today's post-Severstal price. That was just four weeks ago. Neil Woodyer, Endeavour's chairman and a founder of the profitable bank, tells me today that his firm still sees Crew's total value at a steep discount to its risk-adjusted net asset value. Mr. Woodyer and his traders on Thursday, after Severstal's intentions reached the news wire, bought even more Crew shares.
In basic stock-price terms, Endeavour Financial's purchase of some 810 million shares a month ago amounted to an average of 12 cents Canada a share. Crew shares today are 30 cents.
Click here to read more about West Africa's gold-mining potential.
