Guyana goldfields update

Just a heads up - Silvercorp came through with a higher offer which now values GUY at $1.30 per share.

The spike in volume is likely in response to another bid that came in for the company. At the end of April, Silvercorp made an offer which would see Guyana shareholders receive $0.60 in cash per share or 0.1195 of a Silvercorp common share for each of their shares.

On May 12th, a competing bid from Gran Colombia Gold Corp (TSX:GCM) offered shareholders 0.142 Gran Colombia shares for each Guyana Goldfields share. Two days latter, the Guyana board unanimously rejected the GCM bid - stating that the Slivecorp deal was better.

Assuming the Silvercorp bid stands and is successful - at $0.94 it is trading well above the $0.60 per share offer. Silvercorp is trading at $6.38 per share, and at 0.1195, values GUY at $0.76 per share. Regardless, Guyana is being priced as though there is another competing bid on the horizon.

Even if a competing bid emerges, it will have to come in at more than a 30% premium for the current price to be justified. Fact is, there is only one offer that the board has approved right now and its the Silvecorp deal. Until another, more attractive bid arises - the current premium is speculation.

Mat