Wednesday, January 30, 2013

Copper Fox - The Clock Starts Monday

With the official clock starting the count down to Teck's option call beginning on Monday you'd expect some volume on the stock. But, it's not happening. Not even the mention by the officials from BC at the Minerals Round Up was enough to move the needle.

The words of Teck's CEO and a string of announcements like have not rallied the interest of investors in what will surely become a major source of copper in Canada. Trading at a mere 82 cents today with a lackluster volume currently of 38,000 shares gives the impression that no one knows this 10 billion pound behemoth exists.

It's expected that news of the clock starting will be met with the same enthusiasm as CCY who is struggling to maintain 6 cents. While these projects are miles apart in size and the concentrates that will come out of them surely triggering an option clock should garner attention? Alas, no.

Teck has a history of taking about 30 days to make its move. No one I know thinks there's any rush to buy in. So it begs the question, does the market really think there's no future value here? Does the market think this won't even rate a $1? That would be a 20% gain and no one wants it? Wow.

Perhaps the price is sustained by the insiders and long and the market thinks this is worth less? I've provided a lot of information to suggest otherwise. Antofagasta visited the mountain a few years back and were not discouraged by what they saw. They are one of the best companies out there and are to be included in the ranks of Newmont.

If Teck doesn't back in I suspect 3 majors will step out of the shadows and this will make things really interesting. If Teck does back in I still think a major will approach just because of all the drilling money that will be in hand.

It is perhaps the idea that until the BFS items are addressed and the Teck option is known that the sp will not perform and no suitors will come. This thinking is flawed. There probably won't be time to react.    


  1. Like you said, if you're going by the market the clock certainly doesn't seem to start Monday. The market is pricing in a delay and I tend to agree with it. All of their delays now add up/speak for themselves and no one is giving them any credit anymore. I don't blame them. After having sat through this for 2+ years waiting for the big payout and only getting delay after delay followed by a BFS that was less than anticipated (to say the least), I have doubts myself about this wrapping up "soon" (pun intended). People are saying June as a worst case now for Teck to make its decision (Feb. 4th +120 days). Who says (other than a little line in the contract) this can't drag out longer? They've found ways in the past to drag things out months if not years longer than their "expected completion dates". I think we've all learned by now that the most likely thing to expect from them is more delay (market agrees). Until the clock actually starts (ie. is announced in a NR), anyone who knows the history will not be in a rush to get in. This is the slowest train leaving the station that has ever existed and right now it is not too full. The remaining question is: where do you place your bet now? On the other horses that will rise when the jr. market recovers or on CUU getting this wrapped up in the coming months before the other horses rise? At this point investing in CUU is as much about the value as it is a bet on them meeting deadlines. JMHO.

  2. So let's assume the clock starts on Monday, will the price climb? I don't think we will see a price increase on the delivery of the BFS and the start of the 120 day clock. IMO the Liard shares are basically already ours as we have satisfied the requirements of the Teck agreement. The transfer of these shares is really a formality at this point. What we don't know is how long it will take for Teck to act and what door they will open. I am hearing that CUU wants Teck to take a hike so they can keep 100% of the project. This makes perfect sense since not only will CUU retain 100% but they also have spent the last x amount of years transforming this project into what it is today. Let's say Teck elects 75%, will they simply buyout CUU's remaining interest? If CUU wasn't insider controlled the obvious answer would be yes, however don't expect CUU to expect anything less than full value on the remaining 25%. Furthermore, how can Teck feasibly pay what CUU is asking? Look at the BFS yes it is positive but hardly can be considered a gem in its current state. More work needs to be done to firm up the economics. I think CUU planned it this way and is forcing Tecks hand. I conclude that Teck will back in for the 75% and then let the market react and readjust the share price accordingly. We might even end up drilling this year and redoing the BFS. This will be the only way for Teck to justify the large number CUU is asking. Or maybe a third party comes to the table and CUU deals with selling its 25% after the Teck backin.