Jayant Bhandari – Value Arbitrage Opportunities In Florida Canyon–Integra, Adventus–Silvercorp, Hess–Chevron, Aztec, and Irving
Jayant Bhandari, a private strategic resource investor that consults many high-net-worth investors, joins me to review the trends he is seeing in the gold and silver stocks, some arbitrage opportunities in ongoing merger and acquisition deals, and some companies that should have nice upside torque based on their work programs or optionality to defined ounces in the ground.
We start off discussing some of the arbitrage opportunities that Jayant sees in a few mergers, starting with the Integra Resources Corp. (TSXV: ITR) (NYSE American: ITRG) takeover of Florida Canyon Gold Inc. (TSXV: FCGV) (OTC: FCGVF), which was a spinout company from Argonaut Gold during it’s takeover by Alamos Gold (TSX:AGI; NYSE:AGI). We look at the opportunity on the table now for investors looking to capture that arbitrage, but also discuss the value proposition in Integra as it moves from just a developer, to a producers with incoming revenues. Then we look at the Silvercorp Metals (SVM) takeover of Adventus Mining (ADZN.V) (ADVZF), and how this diversification of jurisdiction and assets is setting up in the pro-forma company. We also discuss the Hess Corp (NYSE: HES) takeover transaction in process by Chevron Corporation (NYSE: CVX), that is now being contested by Exxon Mobil Corporation (NYSE: XOM) due to their perceived “Right Of First Refusal” on the large oil project JV in Guyana.
Next we look to a couple junior exploration companies where Jayant feels there is a good opportunity at present due to capitalize on the valuation upside in both Aztec Mining (AZT.V) (AZZTF) and Irving Resources (CSE:IRV)(OTCQX:IRVRF). With regards to Aztec, we discuss the effects of the “LIFE” financing, and what types of investors these types of capital raises attract that often want to just clip the warrants and then sell the stock. We then bring into the discussion in the Canadian “Flow Through” financings as another example of investors that position in juniors for the tax break. Moving over o Irving, we discuss the benefits of bringing in larger senior JV partners in their Yamagano-Noto Joint Venture Term Sheet with Newmont and Sumitomo. This leads to a larger discussion on the value of juniors having strategic partnerships with larger companies to dilute more at the project level to assist with moving projects forward without having to dilute at the equity level.
- In full disclosure, Shad holds shares in Integra Resources and Silvercorp Metals at the time of this recording.
