Well,

I did a bit of research and have a bit better understanding of what is happening, and what we can expect to happen.

I think the math I posted is solid, it just didn't quite line up with the news release numbers because I'm not factoring in options, full dilution, etc..

As richkat pointed out, the shares will likely trade in tandem at a ratio of ~1.25X as the deal gets closer and closer. Before the deal announcement, they were trading at a ratio of 1.6X ($0.40 vs. $0.24).

This would explain why Ontex dropped yesterday. It's quite possible people sold their ONT shares to buy RMK shares as they see an arbitrage opportunity.

What this means is, if Ontex releases positive drill results, and the price rockets, RMK shares will likely spike as well, since RMK share holder can expect to receive 1 ONT share for each 1.25 RMK shares they own.

Personally, I think the deal will bring the following advantages:

-we now have a huge land package (even bigger than before). Roxmark holds land that used to be producing mines way back in the 30's, but were shut down due to a low gold price.
-we now have a mill. i think this increases our attractiveness to a major for a buyout
-we have a 30% stake in the hard rock project in Geraldton that Premier Gold is operating. they have turned out some of the best results to date and have a very aggressive drill program
-our share price is going to be much higher because of the reverse split. if the share price goes north of $2, this means investors can buy ONT on margin.
-i think that because now, Ontex will essentially be twice the size, it will give us more market exposure. our market cap. will be around $100M. it would be great to hear us talked about on BNN, etc..