Timmins Gold breaks to new highs today.
The most obvious reason I see why this stock has been underperforming the uber bullish rally in recent weeks, is because of their merger with Capital Gold proposition, of 2.27 Timmins shares for each Capital Gold share.
Once again, Management has rejected Timmins offer, without giving any real explanation, and instead favours a merger with Gammon Gold.
http://finance.yahoo.com/news/Capital-Gold-Corporation-prnews-4116100712.html?x=0&.v=1
Timmins offer is more superior, and would create a merger of two near equals, which would surely give way to a significant re-value, as the combination would enter mid tier status. Their combined operating cash flow would equal $160M, plenty to fund organic growth, or acquisitions to significantly grow production.
http://finance.yahoo.com/news/Timmins-Gold-Makes-Final-iw-971584845.html?x=0&.v=1
I do not see why they rejected the merger. It does make you wonder if there have been some back handers, and non disclosed special gifts between Capital and Gammon management?
Anyhow, Timmins CEO Bruce Bragagnolo insists they have support for the merger from Capital Gold’s shareholders, who can overturn managements decision.
The mining business is a dirty business. In more ways than one!
I do not like to match news stories to market moves, but I feel the rejection news has been the driver of Timmins move to new highs today.
goldstocktrader 