Topic: How To Invest

Pat: I own 15,000 shares of Lake Shore Gold. Tahoe Resources has made an all-stock purchase offer. I’m wondering what you think of it. Thanks.

Article Excerpt

Tahoe Resources, $11.82, symbol THO on Toronto (Shares outstanding: 227.1 million; Market cap: $2.8 billion; www.tahoeresources.com), has offered to buy Toronto-based junior producer Lake Shore Gold, $1.77, symbol LSG on Toronto in a $945-million, all-stock bid. Lake Shore operates the Timmins West and Bell Creek gold mines near Timmins, Ontario. Tahoe owns and operates the Escobal silver mine in Guatemala and the La Arena gold mine in Peru. The company is offering 0.1467 of a Tahoe share for each Lake Shore share. Based on today’s price for Tahoe’s shares, the offer is now worth $1.73 a share. The acquisition of Lake Shore will give Tahoe two good growth projects: Tahoe’s Shahuindo project in Peru and Lake Shore’s 144 Gap zone at its Timmins West mine. The Tahoe/Lake Shore combination would own four low-cost mines; hold total reserves of 10.4 million ounces of gold; and have $162 million U.S. in cash and $65 million U.S. in debt. The company would get 25% of…