SEARCH STRATEGY: Announced Cash Liquidation

Sunridge Gold Corp. (SGC:TSX.V; SGCNF:OTCQX), which has a project in Eritrea that is getting sold to a Chinese entity. On a per share basis a shareholder will get about $0.35/share in cash or more payable in two tranches. It was trading at about $0.28/0.29 today in early February, and that offers about 30% upside.  The deal has been voted on and accepted. See terms announced here:

http://www.marketwatch.com/story/sunridge-receives-shareholder-and-warrantholder-approval-to-sell-sunridges-60-interest-in-asmara-mining-share-company-and-distribute-proceeds-2016-01-22?siteid=bigcharts&dist=bigcharts

The above is only for individual special situation investors. A miner in Eritrea!

3 responses to “SEARCH STRATEGY: Announced Cash Liquidation

  1. Just glancing at this, wouldn’t the taxes they’d have to pay use up all of the discount shares are currently trading at? I don’t know how exactly the deal is structured so maybe they have a way to limit the taxation of the sale so that shareholders don’t have to pay much during the liquidation other than their respective personal tax rates.

  2. $0.35 is net to shareholders at a minimum. My calc. is about 37 cents.

    Then shareholders pay tax if they have a gain.

  3. This was a nice little trade and I made some real money on it. Thanks for pointing it out to your readers.

    A special situations strategy for those of us unburdened by a large fund or institutional constraints sounds like a real winner to me. I wonder what might be unique about a strategy like that other than the size of the companies you would invest in. Definitely a strand to follow up on when I get some time.

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