Castlemaine Gold (CGT)15c: BUYING our bourse proved too ambitious, but Singaporeans have turned undeterred to a smaller target in Castlemaine Gold, owner of the Ballarat goldmine that was a money pit for former owners Ballarat Gold and Lihir Gold.
The quirky upshot of LionGold's friendly $55 million scrip offer is that, if it's consummated, all of Victoria's producing goldmines will have changed hands.
Last month Canada's Crocodile Gold bought compatriot producer Northgate, which owns the Fosterville and Stawell mines.
Unity Gold, formerly Bendigo Mining, has sold its ill-fated Bendigo production plant and mine to Catalyst Metals by way of a complex joint venture.
LionGold is offering two of its Singapore-listed shares for every nine Castlemaine shares, valuing the target at 18.4c a share, a 62 per cent premium to Friday's close.
Modesty almost prevents Criterion from mentioning his spec buy call on the stock at 4.9c in March last year.
The proposed union results from the age-old imperative of a buyer needing immediate production (a vaunted 50,000 ounces a year) and a target being short of cash. Castlemaine's experience supports the theory that only the third owner of a mine makes gains, but every company should have one "Alan Bond" in its life: Castlemaine bought the mine for $4.5m from Lihir in 2009 -- acquired by Lihir from Ballarat Goldfields for $350m two years earlier. The deal comes after China's Zijin moved on high-cost WA producer Norton Gold Fields, the first Chinese foray into our gold sector.
There'll be more in the fragmented junior sector, but identifying specific targets is one for the chimpanzee with the dartboard.
As for Castlemaine's retail holders, owning Singaporean scrip is about as attractive as a night in the Orchard Road clink on littering charges. But since there's a brokerage-free share sale facility, they may as well hold.
M2 Telecoms (MTU) $3.34
INVESTORS have reacted warmly to the junior telco's $192m purchase of the local operations of Primus Telecom, the company's biggest purchase yet in a string of acquisitions. Given M2's track record, it's seen as a given that the latest foray will be earnings accretive and well handled.
Still, acquisitions are like Easter eggs: it's easy to have too many.
In this case, Primus moves M2 into retail telephony from its small business focus.
M2 in the past prided itself on being network-agnostic, but the deal delivers fibre asset networks in the mainland capitals.
Still, we think holders should take advantage of the accompanying rights issue at $2.66, a 20 per cent discount to the theoretical ex-rights price.
And if new management can explain why your columnist's Primus connection keeps dropping out, all the better.
Lynas (LYC) $1.095
TODAY could well prove make-or-break for the rare-earths producer as the Malaysian government decides whether to hand over an operating licence -- granted and then suspended amid ongoing environmental concerns -- for Lynas's almost completed processing plant at Kuantan.
The relevant minister is due to meet representatives from the Save Malaysia Stop Lynas protest group, but has made it clear the onus is on the opponents to convince him the licence should not be granted.
If the licence is handed over, Lynas is free to import stockpiled material from its Mount Weld mine in Western Australia and all of those $2 a share-plus valuations start to look credible, even though rare-earth prices have retreated.
Criterion misfired with a spec buy at $1.59 on February 3 but we retain the call -- on the proviso we're no expert on opaque Malaysian politics.
Prima Biomed (PRR) 27c
OVERNIGHT, Prima chief Martin Rogers was due to tinkle the opening bell on the Nasdaq, for first trading of the ovarian vaccine developer's US-listed shares. Given the generous valuation of biotechs by US investors, it's a popular gambit. But the gains are likely to be in anticipation of the happy event, with Prima shares surging 22 per cent on Friday.
Sunshine Heart (SHC, 3c) shares listed on the Nasdaq in mid-February at a 60 per cent premium to the Aussie head stock, but are now trading 0.5c (14 per cent) lower. Artificial skin outfit Avita Medical (AVH) had a stellar run ahead of its OTCQX exchange debut a month ago, but have marked time since. Prima (market cap $270m) is a hold.
borehamt@theaustralian.com.au
The Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not hold shares in the stocks mentioned.
