Andean Resources, a mining exploration company whose principal assets are gold and silver deposits in the Santa Cruz region of Argentina, had two gold companies offer to buy the company – Goldcorp, which made a $C3.6 billion bid, and Eldorado Gold, which offered $C3.4 billion. Andean accepted the higher offer but the market thinks another one could be coming.
The accepted offer translates into about $3.4 million. The value of the gold and silver reserves is about $3.6 billion. Now we all know there is a cost involved in extracting the gold from the ground, thus a bid should be at a discount. But this one seems very close to the reserves value. Which could mean a couple of things – Goldcorp and Eldorado are making a statement about gold and silver prices and that statement is they think prices will go higher. It could speak to the rarity of such desposits being available for sale. Or it could mean Goldcorp thniks there’s more gold in them hills. Likely a combination of the three.
And that could mean the bidding for Andean has only just begun.