"The corporate combination of Apollo Gold and Linear Gold appears to be a good fundamental match of strengths and needs for the evolving organizations. The combination as structured should present the opportunity for upward rerating of the stock by doubling the market capitalization, consolidating the number of shares of common stock to broaden ownership and enhancing the gold production/development/exploration profile. . .the proposed business combination and corporate structure appear to both enhance fundamental value and mitigate operating risk, and should be well received.
The overall deal is simple and the motivations transparent. Apollo has a producing asset, the Black Fox gold mine in Timmins, Ontario, while Linear has the Goldfields project's Box and Athona deposits under development in northern Saskatchewan. The result of the combination would be a new company under the name Brigus Gold Corp. . .[which] should emerge immediately as a growing junior to mid-tier gold producer, competitive as an investment on both sides of the 49th parallel for both retail and institutional investors. . .Linear shareholders are to receive 5.474 shares of Apollo. After a four for one share reverse split, this would equate to 1.369 shares of Apollo for Linear shareholders following share consolidation."
Jay Taylor, J.Taylor's Gold, Energy & Tech Stocks
(05/21/10)
"The merger with Linear Gold will be named Brigus Gold. It will have approximately156 million fully diluted shares outstanding and 130 million undiluted. The newly merged company will see the Box Project near Uranium City in Northern Saskatchewan come on line next. It is supposed to produce 70,000 to 75,000 ounces per year. Combined with the Black Fox production, the new company should be pushing upward toward 200,000 ounces of annual gold production. . . this newly merged company should be throwing off considerable cash flow even as it gets set to get a second mine into production."
Brien Lundin, Gold Newsletter
(04/01/10)
"The junior resource sector experienced a wave of mergers and acquisitions since our last issue. . .prominent among them was Linear Gold's agreement to merge with Apollo Gold, in a deal that nets Linear shareholders 5.474 Apollo common shares for each share of Linear held.
. . .For those looking for a gold production play with a decent growth curve, the merged company fits the bill. Apollo estimates it will produce 100,000 ounces of gold at its Black Fox Mine in 2010. For those looking for a steeper growth profile, albeit with greater risk, any disappointment with this deal is mitigated by the fact that we're in a target-rich environment for junior mining stocks. Those who wish to move on have the liquidity to do so.
I wouldn't recommend leaving too soon, however, as I expect the current weakness in the share prices of both companies to end soon. . .We'll keep Linear in our portfolio for now, until the new management team has had time to get comfortable and we've had the chance to consult with them. Until then, consider it a hold."
The Gold Report Interview with Brien Lundin (03/03/10)
BL: Linear Gold has sold off a little bit and I really view that as an opportunity. This is a company with good financial resources, a great management team and a very aggressive business plan to go from a junior explorer into a producer. They have the project in hand to do that. I think they will be in production probably within a year. Although they may not have detailed the timeline yet, the project is sitting there—the Goldfields Project with the Box and Athona mines in Saskatchewan. Linear made a tremendous acquisition by buying that project at a fire-sale price from a financially distressed company coming out of the global credit crisis. They quickly updated the feasibility study and improved the numbers tremendously. It has great economics. There's really nothing holding the company back and, moreover, they have the financial resources to acquire new projects and are pursuing them aggressively. I really like Linear both as a direct play on gold and a growth story in its own right.
TGR: And with the stock selling off from its peak.
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