Golden Goose Resources (GGR.V), which we covered in our report on April22nd, entered into a binding merger agreement with Kodiak Exploration (KXL.V).Kodiak will obtain all Golden Goose shares, for 1.2 Kodiak-share perGolden Goose-share held, and one quarter of a Kodiak-purchase warrant.
This combination brings the Kodiak-cash and the Golden Goose-projecttogether, in an extremely well-capitalized company, with over 20Mdollar in the treasury.
We asked Francois Perron, CEO of Golden Goose Resources to explain to us why this merger is a good deal for Golden Goose-shareholders:
"1 Kodiak has the cash to put into exploration (20.4M as at June 30th),we have an advanced project that would justify the investment. 2. Kodiak will rethink our Magino-project as an open pit project, whichcould seriously revalue the resource, if you lower the cut-off to openpit levels you have the potential to have more ounces. 3. Golden Goose+Kodiak offers a better balanced exploration pipeline:Kodiak Exploration has started several project in the BeardmoreGeraldton camps. These are earlier stage projects but there issomething there. 4. Kodiak has a better qualified management team (more geologists with open pit design experience)"
However, Golden Gooseis trading above the value of the Kodiak-offer. 1.2 Kodiak-share valuesthe deal at C .234 per Golden Goose share. However, Golden Goose isstill trading substantially ABOVE this offered price.
We personally have sold our Golden Goose shares, and bought KodiakExploration with the receipts of the sale, and we recommend you to dothe same, as long as there is a difference between the GoldenGoose-price and the value of the offer!
If you are too late to perform this strategy, we recommend you to approve the merger.