James West, publisher of the Midas Letter commented on Inter-Citic Minerals Inc. (OTCQX: ICMTF; TSX: ICI) recently in an interview with the Gold Report titled: Precious Metals Takeovers Push Share Prices. We have included the Inter-Citic excerpt here with a link to the full interview below:
JW: Inter-Citic Minerals Inc. (ICI:TSX) is very interesting to me. Last year, the company turned down an unsolicited bid from a major Chinese company that management viewed as excessively opportunistic. Since then, it has announced great results from its drilling at Dachang and has increased the value of its deposit.
Inter-Citic is a great entry-level stock now. It is lower than before the takeout offer, and we know that the company that wanted to take it out is still watching it. I think we will see an improved offer from the same or another Chinese company.
TGR: Is it an advantage that Inter-Citic has a large gold deposit in China?
JW: Absolutely. For five years, China as a sovereign entity has been the largest acquirer of gold in the market and the Chinese people are among the world’s most aggressive consumers of gold for investment purposes. Inter-Citic’s proximity to that market is a direct advantage.
TGR: Why has Inter-Citic’s share price lagged?
JW: The fact that it’s in China. There is a perception that only a Chinese major or a Chinese mining company could put it into production successfully.
Some investors saw the failure of the last takeover bid as a lost opportunity. But if you look at the deposit, I think management did the right thing. Drilling aggressively while improving the deposit is the right move.
I think the share price is directly a result of the failed takeover bid. I think the share price will rise dramatically as the value of the deposit is improved and the inquiring company will return with a better offer.