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HVV Buyout

So what is hapening withHVV? Don't consult their website which is way out of date - new CEO is not identified - former CEO is still highlighted - share structure is out of date - last company presentation is 2 years old - leading shareholder is incorrectly identified and there is no news on the site, etc, etc. You need to go to Sedar.com to get any relevant info. Website is sadly a shell rather like the actual exploratory nature of the company itself.

However, the good news is that the new HVV CEO is highlighted on Sedar as an expert in mergers and acquisitions. As HVV is unlikely to be buying anyone, you have to think that major share/debt holder Norvista installed him at HVV for one specific purpose – to sell the Canasta Dorado goldfield to JV partner Aurico Gold (AG). Why else would Novista to whom HVV owes approx $700,000 + have agreed to take over HVV with the acceptance of as many as up to approx 12,000,000 shares of HVV, if they thought that this explorer was going to go bankrupt (shareholders wiped out). In fact, next week’s general/special meeting will vote and I am sure pass the proposal to basically give the company to Norvista in exchange for the owed debt (although of note HVV still holds the JV with AG).

AG which ‘cut’ from its last JV partner within 6 months of signing the JV agreement due to poor test results has now been working on the JV HVV El Chanate package since August 2013! According to the last HVV CEO (Mr. Adams) the results of the first 10 holes were to have been reported by AG the first ¼ of 2014 – but nothing – silence for 18 months everywhere, even the AG company website says hardly anything about its progress in testing the HVV JV area other than it is ongoing (maybe AG does not want a Nordgold type counteroffer to be made by other miners in the Chanate area as they experienced with their very recent Carlisle JV announcement).

So what might Aurico Gold offer for the Canasta Dorado goldfield (from a practical stance, they are not buying the HVV company which is an empty explorer shell so they will probably take the whole Canasta Dorado off HVV/Norvista hands)? My guess is there will have to be at least a ¼ mill ozs in the JV area for AG to buy this field (about 4 years of extra Chanate mine life with minimal start up costs as El Chanate mine is 'just down the road'). If we say (put in your own #s) that AG will make approx $200 per oz profit at $1100 per oz that equates to about $5 million to HVV/Norvista if AG pay 10% of anticipated profits for the concession.

The HVV share price today is at 0.12 cents (Canadian) and with about 10m HVV shares (if Norvista gets about 6m in the swap for debt) this means possibly over 50 cents per share purchase. Interestingly, the directors etc hold 100,000s warrants many of which expire in late Jan 2015 at $2.50. I cannot believe AG will buy up these outstanding warrants but we can but dream.

So HVV buyout price is very interesting especially at today’s prices if you believe the process occurs as outlined. I think this will buyout will occur in the 1st or 2nd quarter of 2015. However as with any stock please do your own DD.