Tussle between Musgrave Minerals and Westgold Resources plays out

This is exactly the happy position the Punter finds himself in as Musgrave Minerals (ASX code MGV) tries to fight off Westgold Resources (WGX).

Westgold is one of this year's great success stories. Its shares have soared from 70 cents to $1.70 in the past six months.

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It has $168 million in cash, bullion and investments, no debt, strong cash flow, and expects to have produced a quarter of a million ounces of gold in the financial year just ended.

With all-in operating costs of around $2000 an ounce and a gold price of around $2880, it's a nice business to be in.

It makes sense for it to try to scale up quickly by buying Musgrave, which is just down the road.

Westgold has the cash and cash flow to accelerate Musgrave's transition from explorer to producer, and it already has a gold processing plant, so Musgrave would not have to build its own.

Musgrave has not yet released its full target statement, but last week reinforced its fight to remain independent (or squeeze a higher price out of Westgold) with a letter urging its shareholders to reject the "opportunistic" WGX offer.

It pointed out that since the bid was announced, MGV shares have remained above the value of the offer from WGX.

The all-share bid of one WGX for every 5.37 MGV was announced on June 6.

As of June 26, WGX still held only 2.48 per cent of MGV.

Suggesting shareholders are waiting for Westgold to raise its bid.

With WGX trading around $1.42 at the time of writing, the bid is worth about 26.5c per MGV share.

On the stock market, MGV is trading around 29-30c.

As an MGV shareholder, the Punter is taking no action but will be happy to stick with whoever wins.