This weekend I’ll be working hard on the December issue of Real Wealth Report, which will publish next Friday, the 16th. Be sure not to miss it.
It’s my year-end report, and will carry my forecasts for 2017, my AI neural net charts for the most important markets, and my overall comments and insights on what 2017 will bring.
I can tell you this now: 2017 is going to be wild. Important geo-political events will be spanning the European Union … the war cycles will be rising again … and the new administration in the U.S. promises to add scores of volatility and profit opportunities in all markets – across the globe.
Today, however, I want to address Yamana Gold’s rights offering.
Yamana Gold (AUY) is an RWR holding, with a recommended good-till cancelled protective sell stop at $2.34.
Yamana also owns the Brazilian miner, Brio Gold. On October 17, Yamana began preparations for a secondary share offering for its interest in Brio – but for those shares to be transferred to existing Yamana shareholders as dividend-in-kind.
The spin-off is being undertaken for the benefit of Yamana shareholders and is the final stage of a plan that the company implemented beginning in 2014 to surface value from certain non-core properties in Brazil.
Completion of the spin-off will also enable Yamana to better focus on its portfolio of six, soon to be seven, producing mines in top mining jurisdictions and on its organic growth pipeline.
In particular, Yamana will be better positioned to focus on recent exploration success, optimization initiatives, and on advancing Canadian exploration and near-term development opportunities.
Yamana will also maintain exposure to Brio Gold through a retained equity interest following completion of the spin-off.
I believe Yamana is making the right move, spinning Brio off but keeping an interest. As a shareholder, and assuming you are receiving the offer, I would take it. I view it as a win-win situation for Yamana and its shareholders.
For what it’s worth, a number of investment bankers agree. HSBC has raised Yamana Gold from a hold rating to a buy rating and set a $7.20 price objective on the stock.
Institutional investors and hedge funds also now own 48.33% of the company’s stock. Great institutional interest.
Yamana also recently announced a quarterly dividend, which will be paid on Friday, January 13th. Stockholders of record on Friday, December 30th will be given a $0.005 dividend. The ex-dividend date is Wednesday, December 28th. This represents a $0.02 annualized dividend and a dividend yield of 0.54%.
Take the deal.
Hold all other positions and stay tuned, especially for the upcoming December gala Real Wealth Report.
Best wishes, as always …
Larry
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