Beny Steinmetz continues to make money from mining holdings, even as be battles the bondholders in Scorpio Real Estate Ltd. (TASE: SCRP.B1) over fractions of a percent in interest on the bonds of the tottering company. A check by "Globes" found that the share of Gabriel Resources Ltd. (TSX: GBU) have doubled in value since Steinmetz invested in the Canadian gold and silver mining company six months ago.
In November 2009, Steinmetz bought 9% of Gabriel Resources at C$2.50 per share for a total of C$70 million, in a private placement through BSG Investments Ltd unit BSG Capital Markets PCC Ltd.. Steinmetz also received an option to increase the stake to 16%, for a total investment of about C$120 million.
Gabriel Resources closed on the Toronto Stock Exchange yesterday at C$4.94, giving a market cap of C$1.68 billion, double the value at the time of Steinmetz's investment. The share has apparently been boosted by the rise in the price of gold and silver.
Steinmetz's gain on his Gabriel Resources holding is C$70 million; if the option is counted as well, the gain is C$100 million.
Gabriel Resources posted a net loss of C$15.4 million for the first quarter of 2010, a characteristic amount for a company at its stage of development. The company's main asset is the Rosia Montana gold mine project in Romania, one of the largest in the world. It has an estimated 10.1 million ounces of gold and three million ounces of silver.
Published by Globes [online], Israel business news - www.globes-online.com - on July 20, 2010
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