I think the price of the stock is very low (I bought at 0.16$) but the low price also reflects the foolishness of the management who give away their San Miguel 30% for 1/3 of its value, maybe 1/2.
The idea of exchanging the asset with the partner shares was nice, but the price of the transaction is just ridiculous.
San Miguel is the only true asset of Paramount, together with 8 million dollars in cash. Let's say that San Miguel is worth 50 million dollars, than Paramount with 70% San Miguel + 8 million $ was worth 42 million $. Actually today Paramount market cap is worth 50 million $ with 100% of San Miguel so I think my valuation is correct. But instead of asking 15 million $ in Paramount shares Tara Gold gave away its 30% of San Miguel for just half that price.
When I did know such a gift to Paramount my target price for Tara Gold immediately went down to 0.5$ from 0.65$!
My target price was given from this sum:
30% San Miguel = 20 millions $
80% Tara Minerals = 23 millions $
other assets = 22 millions $
65 millions $ of market cap = 0.65 $ per share
but now it is
80% Tara Minerals = 23 millions $
other shares = 10 millions $
core business minus management foolishness = 17 millions $
50 millions $ of market cap = 0.5 $ per share
May I know your opinion on the Tara Gold intrinsic value and the san Miguel transaction, friends?
PS: does anyone know how many shares in other companies do they exactly own? I know they have got 80% of Tara Minerals, 7.35 million shares of Paramount and 1.5 million shares of La Camera Mining, do you know if they own any other past and present partners shares?
