The recent news tells us it's worth going after.
"Last year's exploration program yielded excellent drill results with impressive widths and gold grades which have extended the mineralization well beyond the current pit,” said Greg Lang, NOVAGOLD's President and Chief Executive Officer. "More importantly, 2012 drilling at Galore Creek led to the discovery of the new Legacy zone located in close proximity to the projected pit. With these positive drill results, we are now well positioned to update our reserves and resources and further improve the overall economics of this project as we pursue the sale of our share of this exceptional asset. If developed as envisioned in the PFS, Galore Creek is expected to become the largest and lowest-cost copper mine in Canada, one of the last geo-politically safe jurisdictions where copper miners can build new mines. This factor is particularly important considering the critical challenges copper miners face today in jurisdictions such as the Democratic Republic of Congo, Indonesia, Argentina, Mongolia and Peru.”
We've been waiting for this catalyst for some time now. The results came very slow but they've finally been put on display. What a lot of investors knew was that GC needed to be bigger. 95kt/d was not enough and the LOM needed to be extended. With the new discovery there is now enough to ramp up the tonnes per day and extend the Life of Mine.
Grades were never an issue. Tunnels and hardness were. Now they have enough proof to add size while extending life. They should want to see 130kt/d and about 20-25 years of mine life. What the new discovery suggests is a strike greater than 700 meters adjacent to the main pit. as they drill deeper they are likely to fill in the bottom. At 300 meters North of the Bountiful zone these are basically connected and it will be cheap to get at it. This is going be easy to add to the pit design and should reduce costs even more.
I would expect a buyer to step up to the plate. Teck already owns an option on the high quality Schaft Creek deposit that also just keeps growing in size and quality. Together, these form an incredibly attractive investment district. I think the majors have been waiting for the proof at GC because they need to see the big picture. This adds to the geo political safety. At this point there would be a public backlash should a new government in BC attempt to stop any of the projects connected to this area. After all, the public are building the power line to feed these monsters.
I've heard the political rumblings. Tax hikes and labour changes. Looking at the PFS and BFS numbers from just these two projects shows there's a great deal of sensitivity here. However, the Golden Triangle is now approaching "too big to fail" status. Additionally, the environmental challenges are starting to abate. A lot of the focus will be on the pipe lines. There's only so much attention span you can get so I suspect more will be on the oil patch and a lot less on mining. There might even be some grumbling about interference by foreign interests at the highest levels. So for it's just been lip service. But, do the Americans want to be excluded from future projects?
With 2 word class deposits within stones throw of each other, one in BFS and the other ready to update this is the catalyst the area has been waiting for. I have no doubt that with new numbers and this year's drilling at GC and SC we will see a new robust forecast.The question is will a buyer wait or buy before the value skyrockets on both. I think they will strike now.
Looking back at the reasons for buyers not stepping up when they could have paid a lot less didn't quite justify their waiting. With the global geo political situation deteriorating there was an impudence in the majors who stayed the course in those countries. They are paying the price. Now to get assets in a safer jurisdiction they will pay a higher price and may even be excluded entirely as the social circle tightens amongst the majors who cooperate in tough times.
Showing posts with label copper fox rumors tech buyout. Show all posts
Showing posts with label copper fox rumors tech buyout. Show all posts
Monday, February 25, 2013
Sunday, February 17, 2013
Copper Fox Joint Venture Creates Value
Not many people are thinking about Copper Fox becoming a new company under a JV agreement. This is obviously what Teck and Copper Fox are heading towards. The first thing we look at is the beneficial tax incentives and what that can do for the new firm. Of course, an underlying rule is that both entities will want to be able to buy/sell their interests with the best tax advantage they can have. The structures also needs to allow for capital partners with a tax advantage. This is especially true when a First Nations group is involved. (no tax).
The JV will bring borrowing power. Not that CUU needs it, they have a billionaire patron. Instead, going forward, the JV will make the deal marketable.
Teck and CUU will have to haggle out who does what and is responsible for what. They will also need to agree on the launch. A number of structure considerations will have been ironed out as shareholders need to be rolled in. The new face will be Teck, CUU and a billionaire.
"Despite the simplicity of the general concept explained above, the negotiation of joint venture agreements in the international mining industry can sometimes be surprisingly difficult due to the differing perspectives and motivations of juniors and majors. This article seeks to briefly describe and explain some of the main tension points between juniors and majors which appear repeatedly in joint venture negotiations."
http://www.mccarthy.ca/article_detail.aspx?id=5975
"A junior’s concern is often even more pronounced in relation to the joint funding phase."
In the case of CUU we see that they are on equal footing because of their patron. However, there can be a perception that the insider(s) is holding too much of the float. In some cases this is not received well. I should say in the past this over concentration worried retail share holders. In today's financial environment this is becoming a requirement. In past articles and other stuff you've probably read online there is the wide expectation that a massive weeding out will occur amongst the Jrs.
"Generally, a major will also worry that its junior partner may use any veto power as leverage to force a buy-out of the junior by the major or to achieve some other objective not originally bargained for, such as additional financial support from the major."
The Liard royalty is a hot button issue as of late. However, in discussions with CUU I've brought this up several times and my general conclusion is that they will cooperate with Teck until it hurts. The appointment to the Board of Directors was a good sign of what the two companies were planning. This is a chief negotiation position. It is leverage.
"Discussions around this general theme often focus on specific minority protections, which juniors would like to have and which majors oftentimes would sooner not grant. In particular, juniors seek minority protections (usually in the form of supermajority voting requirements, which effectively confer vetoes) in respect of such matters as:
"However, in other cases, juniors are instead more concerned that majors may fail to opt for mine development even when a favourable feasibility study exists, perhaps because the majors might prefer to dedicate capital to projects they deem more worthy."
This has been a subject of some public debate for the last six months. In this particular case the BFS just passed the bar due to a requirement that the inferred that is sitting on top of the deposit be classified as waste because it has not been adequately drilled. Some speculate this was a gamble on the part of CUU but in a past article I explained in some detail why they chose the route that led us to this point. Simply put, there are enough holes but they are historical in nature. They know it has value and even have a pretty good idea of what it's worth but they will have to do some drilling to bring it in as a resource.
"The junior may argue for a veto. However, if it is unable to negotiate a veto, the junior may instead propose that the board of directors may only make a development decision the basis of a "bankable feasibility study" and propose further that any dispute about whether a particular study is in fact a bankable feasibility study be resolved through a time-consuming referral to an expert."
This is one of the more complicated parts of the discussion. As we have seen, a number of experts have already been engaged. This is a unique case because this was done by agreement with Teck. Teck also wants the best plan because they do want to mine it. We all know about the impending copper supply shortages in part due to the decimation of the Jrs.
"Juniors often prefer to keep their options open as much as they can. They will seek contractual powers that give them leverage or exit options or that they may use to induce majors to purchase their interests."
This last item is where I think the discussions are at now. Our reluctant partner scenario has finally seemed to be shifting. Yes, the company wants out but to get the best for the share holders it's obvious that the JV route is going to be the most profitable. Once all the rights are determined and before the major capital commitments start is when CUU should sell.
It should be noted that there is a 4 year clause to production. There must be no delay in selling and I do expect this clause will be modified. The BFS gave a longer period to build so a more reasonable time line will be struck. I would not be surprised to see a "favourable conditions" clause inserted due to the impending change of government in BC. This would not deter another major from entering because both would understand the value to that.
Click this link if you want to see a template that covers a basic set up for a JV. http://www.ampla.org/modeldocuments/documents/model-documents65
The JV will bring borrowing power. Not that CUU needs it, they have a billionaire patron. Instead, going forward, the JV will make the deal marketable.
Teck and CUU will have to haggle out who does what and is responsible for what. They will also need to agree on the launch. A number of structure considerations will have been ironed out as shareholders need to be rolled in. The new face will be Teck, CUU and a billionaire.
"Despite the simplicity of the general concept explained above, the negotiation of joint venture agreements in the international mining industry can sometimes be surprisingly difficult due to the differing perspectives and motivations of juniors and majors. This article seeks to briefly describe and explain some of the main tension points between juniors and majors which appear repeatedly in joint venture negotiations."
http://www.mccarthy.ca/article_detail.aspx?id=5975
"A junior’s concern is often even more pronounced in relation to the joint funding phase."
In the case of CUU we see that they are on equal footing because of their patron. However, there can be a perception that the insider(s) is holding too much of the float. In some cases this is not received well. I should say in the past this over concentration worried retail share holders. In today's financial environment this is becoming a requirement. In past articles and other stuff you've probably read online there is the wide expectation that a massive weeding out will occur amongst the Jrs.
"Generally, a major will also worry that its junior partner may use any veto power as leverage to force a buy-out of the junior by the major or to achieve some other objective not originally bargained for, such as additional financial support from the major."
The Liard royalty is a hot button issue as of late. However, in discussions with CUU I've brought this up several times and my general conclusion is that they will cooperate with Teck until it hurts. The appointment to the Board of Directors was a good sign of what the two companies were planning. This is a chief negotiation position. It is leverage.
"Discussions around this general theme often focus on specific minority protections, which juniors would like to have and which majors oftentimes would sooner not grant. In particular, juniors seek minority protections (usually in the form of supermajority voting requirements, which effectively confer vetoes) in respect of such matters as:
- disposals of project assets;
- dividend or distribution policies;
- project financing;
- the granting of security interests over project assets;
- affiliate transactions (i.e., between the project management company and other companies in the major’s corporate group);
- mine development decisions (i.e. decisions to proceed with mine development, which are discussed under the next heading) and
- decisions to cease or curtail commercial production once a mine is up and running."
"However, in other cases, juniors are instead more concerned that majors may fail to opt for mine development even when a favourable feasibility study exists, perhaps because the majors might prefer to dedicate capital to projects they deem more worthy."
This has been a subject of some public debate for the last six months. In this particular case the BFS just passed the bar due to a requirement that the inferred that is sitting on top of the deposit be classified as waste because it has not been adequately drilled. Some speculate this was a gamble on the part of CUU but in a past article I explained in some detail why they chose the route that led us to this point. Simply put, there are enough holes but they are historical in nature. They know it has value and even have a pretty good idea of what it's worth but they will have to do some drilling to bring it in as a resource.
"The junior may argue for a veto. However, if it is unable to negotiate a veto, the junior may instead propose that the board of directors may only make a development decision the basis of a "bankable feasibility study" and propose further that any dispute about whether a particular study is in fact a bankable feasibility study be resolved through a time-consuming referral to an expert."
This is one of the more complicated parts of the discussion. As we have seen, a number of experts have already been engaged. This is a unique case because this was done by agreement with Teck. Teck also wants the best plan because they do want to mine it. We all know about the impending copper supply shortages in part due to the decimation of the Jrs.
"Juniors often prefer to keep their options open as much as they can. They will seek contractual powers that give them leverage or exit options or that they may use to induce majors to purchase their interests."
This last item is where I think the discussions are at now. Our reluctant partner scenario has finally seemed to be shifting. Yes, the company wants out but to get the best for the share holders it's obvious that the JV route is going to be the most profitable. Once all the rights are determined and before the major capital commitments start is when CUU should sell.
It should be noted that there is a 4 year clause to production. There must be no delay in selling and I do expect this clause will be modified. The BFS gave a longer period to build so a more reasonable time line will be struck. I would not be surprised to see a "favourable conditions" clause inserted due to the impending change of government in BC. This would not deter another major from entering because both would understand the value to that.
Click this link if you want to see a template that covers a basic set up for a JV. http://www.ampla.org/modeldocuments/documents/model-documents65
Friday, February 15, 2013
Copper Fox is in Discussions With Teck
As stated in the NR, the company is in discussions with Teck. I would like to see updates on the drilling plan for Schaft Creek and Arizona while they chew the fat. I'm not alone in that wish. Yet, on various discussion boards a lot of people want nothing else to happen except a closure with Teck. I find that a curious predicament for the company.
Copper Fox has an obligation to update us on those items yet they may be reluctant due to the pressure they get from share holders. I try to tell those people that those NRs are good signs. If the negotiations were getting tough it would be reasonable for the main geo/CEO to be focused on handling objections. Getting our corporate update on time shows us that things are going smooth. We should be happy to see updates on our next lines of business.
So what are they talking about... oh to be a fly on that wall. From our outside prospective we can speculate that Teck is looking at its giant land position and considering the full scope of what it intends for the next 50 years. Yes, I said 50 years. I do not expect that to be concluded over night.
I've also recently speculated that CUU may have a partner in line already. I'm basing this on the lack of an overt statement by either company saying the BFS has been accepted and the shares transferred. The simple fact that this has not been concluded suggests that a partner is involved. This is not delayed by the 30 days the contract allows. Sure there would be bankers involved as a third party to say what the bankability entailed interest wise. But, I suspect the parties involved do not require banker money.
Teck has had ample time and a hand in the crafting of the document. They cannot doubt what they have in hand. This has been reviewed by everyone and their dogs. This one smoking gun leads me to be pretty sure that one or more interested parties are involved. The hush hush even on general questions is a good sign that this speculation is correct.
All along the directors have advised that Teck could act without warning. I suspect this was a smoke screen. A project of this size is like a herd of elephants. My first inkling of this was about two years ago. This was when the company was talking about who might be interested. Then we found out that a few specific geologist visited the hill. This would be an appropriate timeline for those companies to fully investigate the offerings. The last key piece of info was the over worked BFS. In terms of BFS's this one got worked over harder than almost every one I've studied. Elephants are not fast over long distances but they can be heard miles away.
In my last discussions with the company there was a decided lack of interest in pushing the contract lines. Yes, we could have triggered the RFoR and while that would seem to be a proper step towards selling the project clearly that could be construed by Teck as a WTF. So that won't happen. Before the verbal lock down we discussed many of the contract items. Why the 30 day clause, what would happen if Teck didn't notify re the BFS etc. In all of this the tendency was to lean towards flexibility. There was no sense of us pressuring Teck at all. I think past communications with the company in this respect may have been more as a result of the share holders than as a result of what Teck was doing. Beside, the company does have to give the impression that we can stand on our own two feet.
The discussion right now would be aimed at creating a complete understanding of the underlying contracts. Both companies would be discussing a mutually beneficial stance that would make third parties happy. If this was not going on then we would have our Liard shares already. These shares make a very important negotiation point. Their value cannot be understated. They are not just a feather in our cap. They can be used to finance the project!
In addition to the above we should also be discussing our role as a partner. Now don't jump on me just yet, I know the company has said it wants to sell and nothing else but... What's more valuable, the interest we have or a partnership with one of the largest miners in the world? Suppose you had to go to Japan to make an offering. Which one would you rather present? Clearly, the best bang for the buck is the partnership. And what would you speculate they are talking about?
We want to cement our rights in the partnership and Teck wants those royalty shares off the table. They want them absorbed into a mutual frame work. We want that too but we want the best sales package possible. I see grounds for some horse trading. Teck has an interest in sending us out to the third parties with a very good deal to offer.
A while back I was pretty sure Elmer (CEO) was given the Liard appointment to facilitate a deal. My speculations appear to be accurate. Who better than the guy who's peeked under every rock on the hill. Again, the time frames of these various items reveals an undercurrent that suggests a third party. If it was just the two companies the time lines would be a little more straight forward. There would also be much less of a cone of silence. After all, the contract belongs to the two companies so nothing would require then not to talk to us unless there was indeed a third party.
Interestingly, the perceived route is not the only one! There are in fact, more options than what you read on the surface. These must also be discussed. How do you slice a pie that's this big? What about selling royalty streams to finance the project? What if the third party is a consortium? That would make the discussions complicated. What if we want to retain an interest? Let say we want to retain the Liard shares and 10% of the deposit? This would fund exploration for years to come and Teck might want us to develop the district.
These are just some of the possibilities. There are more. It's my feeling that we want to retain an interest. We are the prover upper in this equation and the other guys are the builder uppers. I might reveal what I consider the highest probability in the near future. It's also possible that before I write about it there may be an abundance of proof.
One thing I know for sure is that the next time I call we should have a lot to discuss regarding the potential deal. (Unless we get some Az guidance or the drill program for SC).
Copper Fox has an obligation to update us on those items yet they may be reluctant due to the pressure they get from share holders. I try to tell those people that those NRs are good signs. If the negotiations were getting tough it would be reasonable for the main geo/CEO to be focused on handling objections. Getting our corporate update on time shows us that things are going smooth. We should be happy to see updates on our next lines of business.
So what are they talking about... oh to be a fly on that wall. From our outside prospective we can speculate that Teck is looking at its giant land position and considering the full scope of what it intends for the next 50 years. Yes, I said 50 years. I do not expect that to be concluded over night.
I've also recently speculated that CUU may have a partner in line already. I'm basing this on the lack of an overt statement by either company saying the BFS has been accepted and the shares transferred. The simple fact that this has not been concluded suggests that a partner is involved. This is not delayed by the 30 days the contract allows. Sure there would be bankers involved as a third party to say what the bankability entailed interest wise. But, I suspect the parties involved do not require banker money.
Teck has had ample time and a hand in the crafting of the document. They cannot doubt what they have in hand. This has been reviewed by everyone and their dogs. This one smoking gun leads me to be pretty sure that one or more interested parties are involved. The hush hush even on general questions is a good sign that this speculation is correct.
All along the directors have advised that Teck could act without warning. I suspect this was a smoke screen. A project of this size is like a herd of elephants. My first inkling of this was about two years ago. This was when the company was talking about who might be interested. Then we found out that a few specific geologist visited the hill. This would be an appropriate timeline for those companies to fully investigate the offerings. The last key piece of info was the over worked BFS. In terms of BFS's this one got worked over harder than almost every one I've studied. Elephants are not fast over long distances but they can be heard miles away.
In my last discussions with the company there was a decided lack of interest in pushing the contract lines. Yes, we could have triggered the RFoR and while that would seem to be a proper step towards selling the project clearly that could be construed by Teck as a WTF. So that won't happen. Before the verbal lock down we discussed many of the contract items. Why the 30 day clause, what would happen if Teck didn't notify re the BFS etc. In all of this the tendency was to lean towards flexibility. There was no sense of us pressuring Teck at all. I think past communications with the company in this respect may have been more as a result of the share holders than as a result of what Teck was doing. Beside, the company does have to give the impression that we can stand on our own two feet.
The discussion right now would be aimed at creating a complete understanding of the underlying contracts. Both companies would be discussing a mutually beneficial stance that would make third parties happy. If this was not going on then we would have our Liard shares already. These shares make a very important negotiation point. Their value cannot be understated. They are not just a feather in our cap. They can be used to finance the project!
In addition to the above we should also be discussing our role as a partner. Now don't jump on me just yet, I know the company has said it wants to sell and nothing else but... What's more valuable, the interest we have or a partnership with one of the largest miners in the world? Suppose you had to go to Japan to make an offering. Which one would you rather present? Clearly, the best bang for the buck is the partnership. And what would you speculate they are talking about?
We want to cement our rights in the partnership and Teck wants those royalty shares off the table. They want them absorbed into a mutual frame work. We want that too but we want the best sales package possible. I see grounds for some horse trading. Teck has an interest in sending us out to the third parties with a very good deal to offer.
A while back I was pretty sure Elmer (CEO) was given the Liard appointment to facilitate a deal. My speculations appear to be accurate. Who better than the guy who's peeked under every rock on the hill. Again, the time frames of these various items reveals an undercurrent that suggests a third party. If it was just the two companies the time lines would be a little more straight forward. There would also be much less of a cone of silence. After all, the contract belongs to the two companies so nothing would require then not to talk to us unless there was indeed a third party.
Interestingly, the perceived route is not the only one! There are in fact, more options than what you read on the surface. These must also be discussed. How do you slice a pie that's this big? What about selling royalty streams to finance the project? What if the third party is a consortium? That would make the discussions complicated. What if we want to retain an interest? Let say we want to retain the Liard shares and 10% of the deposit? This would fund exploration for years to come and Teck might want us to develop the district.
These are just some of the possibilities. There are more. It's my feeling that we want to retain an interest. We are the prover upper in this equation and the other guys are the builder uppers. I might reveal what I consider the highest probability in the near future. It's also possible that before I write about it there may be an abundance of proof.
One thing I know for sure is that the next time I call we should have a lot to discuss regarding the potential deal. (Unless we get some Az guidance or the drill program for SC).
Wednesday, January 23, 2013
Copper Fox 1st Offer Window Nears
As the company draws closer to the official BFS filing date Teck has a window to make an offer. It doesn't surprise me that a small group of investors shook the tree this morning (again). They have a rather large short position. Their idea is simple, try to cause fear. People who know the official filing is coming see the sp drop suddenly without reason should begin to question what's going on. In this case the BFS is rock bottom bare bones. They suspect Teck may make an offer and want to create a large difference between the sp and the offer price. The more the price drops the lower the offer should be based on 30 day averages.
This won't make a hill of beans! See below:
Let's look at the ROV at 5%. This is the real world evaluation of operations. The chart calls for a NPV of $2.66 billion. Due to the scale of the operation IRRs at 15% are actually very good. This demonstrates the very long term nature of the project. To go that long you have to be huge. But, more important to us is what the after tax figures look like so here's the chart.
Base Case and ROV (Case 4) after-tax economic results are:
The NPV at 5% is $1.26 billion. Oh, and why do I say use the 5% model? No mine is valued at 8% after derisking and just prior to the start of operation. That's just not how a mine is evaluated on paper. Once we have actual figures we expect them to be very close to the actual calculated annual figures. Not discounted! Highland Valley is a good example as the CEO (Elmer) tells us. If they valued it under discounted cash flow it would currently be worth ZERO.
In our case the real world figure if converted to gold at $1700/oz would mean a production of about 750,000 ounces a year after tax. That would mean cuu's share at full back in would be about 190,000 ounces. But, let's not forget that cuu will own about a 5% royalty that comes off the top. That's $63 million after tax dollars. Yes, it kicks in when the cap is paid off but then it's there for a minimum of a decade. Let's call it $630 million. But as we all know, the resources will get expanded and it sure looks like they will be mining this for 50 years. But 10 years of royalty is a known so let's just keep it there.
So, cuu has about 25% of the ATNPV and 5% off the top. $315 million NPV and in time $63 million for royalties. $5.355 Billion plus $630 million LOM. That's $6 billion LOM after tax! That's $14 a share LOM.
There's a number of things that also have to be accounted for. This assumes Teck pays the 4 times expenses to get its 75%. So about $400 million can go to expand the resources or it could even be used to pay down the capex. Then, Teck has to finance the project at a spread of 2% and that's pretty good for cuu considering what it would cost if they had to go get their portion of the money. The interest spread is substantial.
We also know that the real recoveries are higher than those stated and cuu says that can be improved. I've heard they could improve it by 6%. That's a lot LOM. As in that makes a huge difference. There's about 7 anomalies that drills proved (on a couple) have a 1 to 1 correlation with what's already proven. Those need work. One in particular has higher silver grades. We also know from the starter pit that there's another deposit under it. At 800 meters, we will have to figure out exactly how to get at those high grades. That will come in time.
Last, is the waste rock. There are enough historical holes to give us a pretty good idea what cash flow we can expect from what is now classified as waste. You saw the results in the NR from the limited data and that was outstanding. It's not really waste. I'm not going to do up my spec numbers for it. I just want to build a case for my idea of value. Lastly, the BFS was for just 1/2 of the deposit!
If we asked for 33% of the LOM value it's about $4.60 before waste conversion. Then add a $1 for the contract and you get a tidy $5.60 per share based off the lowest case info. Add in all the other factors and you get...
Now lets suppose Teck takes 20% just to keep a toe hold on the property. This makes sense over just taking the royalty since they also own 1/2 of Galore Creek. (Why build 2 air strips, 2 fuel depots etc). Now what are we worth with a much much larger royalty and 80% of the NPV?
You do the math.
This won't make a hill of beans! See below:
| Summary of Economic Results | |||||
|---|---|---|---|---|---|
| Item | Unit | Base Case | 3-Y Avg* Case | Spot Price** Case | Real Options Case |
| Metal Price | |||||
| Copper | US$/lb | 3.25 | 3.63 | 3.69 | 3.25 |
| Gold | US$/oz | 1,445.00 | 1,445.00 | 1,736.00 | 1,445.00 |
| Silver | US$/oz | 27.74 | 27.74 | 32.71 | 27.74 |
| Molybdenum | US$/lb | 14.64 | 14.64 | 11.34 | 14.64 |
| Exchange Rate | US:Cdn | 0.97 | 0.99 | 1.02 | 0.97 |
| Pre-tax Economic Results | |||||
| Operating Cash Flow | CDN$ M | 10,746 | 12,065 | 12,161 | 11,284 |
| NPV (at 5%) | CDN$ M | 1,694 | 2,348 | 2,419 | 2,665 |
| NPV (at 8%) | CDN$ M | 513 | 967 | 1,024 | 1,382 |
| NPV (at 10%) | CDN$ M | 25 | 388 | 437 | 836 |
| IRR | % | 10.13 | 11.9 | 12.14 | 15.4 |
| Payback | Years | 6.48 | 5.81 | 5.7 | 4.9 |
| Cash Cost/lb Cu | CDN$/lb | 1.15 | 1.19 | 1.12 | 1.15 |
| Total Cost/lb Cu | CDN$/lb | 2.09 | 2.14 | 2.07 | 2.09 |
| Avg Annual operating Cash Flow*** | Millions | 371 | 414 | 425 | 640 |
Let's look at the ROV at 5%. This is the real world evaluation of operations. The chart calls for a NPV of $2.66 billion. Due to the scale of the operation IRRs at 15% are actually very good. This demonstrates the very long term nature of the project. To go that long you have to be huge. But, more important to us is what the after tax figures look like so here's the chart.
Base Case and ROV (Case 4) after-tax economic results are:
| After Tax Economic Results | ||
|---|---|---|
| Description | Base Case | ROV Case |
| Net Cash Flow (CDN$ million) | 4,270 | 5,133 |
| Discounted Cash Flow NPV (CDN$ million) at 5% | 956 | 1,260 |
| Discounted Cash Flow NPV (CDN$ million) at 8% | 67 | 529 |
| Payback (years from start of mill operations) | 6.8 | 5.7 |
| IRR (%) | 8.3 | 12.7 |
The NPV at 5% is $1.26 billion. Oh, and why do I say use the 5% model? No mine is valued at 8% after derisking and just prior to the start of operation. That's just not how a mine is evaluated on paper. Once we have actual figures we expect them to be very close to the actual calculated annual figures. Not discounted! Highland Valley is a good example as the CEO (Elmer) tells us. If they valued it under discounted cash flow it would currently be worth ZERO.
In our case the real world figure if converted to gold at $1700/oz would mean a production of about 750,000 ounces a year after tax. That would mean cuu's share at full back in would be about 190,000 ounces. But, let's not forget that cuu will own about a 5% royalty that comes off the top. That's $63 million after tax dollars. Yes, it kicks in when the cap is paid off but then it's there for a minimum of a decade. Let's call it $630 million. But as we all know, the resources will get expanded and it sure looks like they will be mining this for 50 years. But 10 years of royalty is a known so let's just keep it there.
So, cuu has about 25% of the ATNPV and 5% off the top. $315 million NPV and in time $63 million for royalties. $5.355 Billion plus $630 million LOM. That's $6 billion LOM after tax! That's $14 a share LOM.
There's a number of things that also have to be accounted for. This assumes Teck pays the 4 times expenses to get its 75%. So about $400 million can go to expand the resources or it could even be used to pay down the capex. Then, Teck has to finance the project at a spread of 2% and that's pretty good for cuu considering what it would cost if they had to go get their portion of the money. The interest spread is substantial.
We also know that the real recoveries are higher than those stated and cuu says that can be improved. I've heard they could improve it by 6%. That's a lot LOM. As in that makes a huge difference. There's about 7 anomalies that drills proved (on a couple) have a 1 to 1 correlation with what's already proven. Those need work. One in particular has higher silver grades. We also know from the starter pit that there's another deposit under it. At 800 meters, we will have to figure out exactly how to get at those high grades. That will come in time.
Last, is the waste rock. There are enough historical holes to give us a pretty good idea what cash flow we can expect from what is now classified as waste. You saw the results in the NR from the limited data and that was outstanding. It's not really waste. I'm not going to do up my spec numbers for it. I just want to build a case for my idea of value. Lastly, the BFS was for just 1/2 of the deposit!
If we asked for 33% of the LOM value it's about $4.60 before waste conversion. Then add a $1 for the contract and you get a tidy $5.60 per share based off the lowest case info. Add in all the other factors and you get...
Now lets suppose Teck takes 20% just to keep a toe hold on the property. This makes sense over just taking the royalty since they also own 1/2 of Galore Creek. (Why build 2 air strips, 2 fuel depots etc). Now what are we worth with a much much larger royalty and 80% of the NPV?
You do the math.
Sunday, December 23, 2012
Copper Fox has assumed control
Elmer didn't get a board seat as a plumb. I grilled him on that and he tried to wiggle out of talking. I think I got him to agree that he was there as a facilitator should an offer come from the outside. It makes a lot of sense to add him to the team should an outsider make a bid or even just poke around. Teck could not entertain anything without our cooperation.
We will drill up the asset and do resources if they don't buy us out. This would be the best bang for the buck. We will not be building roads or buying power lines. If we did anything other than use the money to remove the waste rock to aq cash crop it would signal a partnership with Teck. The drilling and reports would have to be number 1 in all cases. Next in line for value is the EA. Sure, as a third item we could buy power. A road as a fourth item, ok. Putting things in the right order is highly important. We have a vote on Liard and can act as the facilitator. We decide how any money is spent. The stipulation is that it must be spent on the project but that's it. If you want to see us get the maximum offer then this is how it will be done.
I'm surprised that more people are not getting the development process. We get a bare bones BFS so that we can stop diluting and start spending Tecks money. How much project do you think $350 million would get us? Remember as we drilled North the silver started to climb? If that has to come out of our budget it's a small dilution to get a valuable resource. Remember the 1650g/t? Would you like to find out more? How about the full value of the waste converted to a resource?
So the next NR reads: CUU and Teck form a joint venture and CUU has $350 million in cash to spend. Project highlights include...
This doesn't take into account the royalty. What does this do for our royalty? We can 1/2 the payback period and secure the power line with that kind of money. We could agree with Teck that the waste is cash and put all the money to the capex taking a big chunk out of it. Many many options. I badgered the co to spend more but obviously Teck had the brakes on what was applicable. This is because I wanted us to have a huge war chest when this moment arrived. Id $350 enough? Yes. $450 would have allowed for a couple other manouvers but I think the Liard seat takes care of that.
Even if Teck just takes 20% we have $85+ million in cash and that's more than enough to remove the waste. How many companies have this kind of cash and a positive BFS in hand?
Saturday, December 22, 2012
Copper Fox 60 Days to Joint Venture
I probably shouldn't write about this but the cat is out of the bag. It took a while but people are figuring out what it means for us to have control over where the option money goes.
Yes folks, we do decide where the $340-$350 million will be spent. Since we have 171M tonnes that needs to be converted so it can be included in the FS... you got it, that's where it will be spent. In addition, we had some stunning results in our last few rounds of drilling. $20 million there would open up a can of whoop ass. That's just 20 million! This would open up a new Resource requirement.
I talked to Elmer about slope issues in the silver rich zone. He said we'd need to define it because of where it was situated to determine what could be extracted. What we know is that it's open at depth but we'd need to know the concentration of the veinlets. I have the distinct impression that we'd be well served by proving that up.
There's enough money in the kitty at the 40% option to do 2 resources. This would put us in a position to sell to anyone. If we just had the 20% option that would complete 1 Resource Estimate and allow us to define the silver zone.
Enough said by me for now. I'll close with this. You all should know by now how a mine comes into being.
What Vette Said:
Yes folks, we do decide where the $340-$350 million will be spent. Since we have 171M tonnes that needs to be converted so it can be included in the FS... you got it, that's where it will be spent. In addition, we had some stunning results in our last few rounds of drilling. $20 million there would open up a can of whoop ass. That's just 20 million! This would open up a new Resource requirement.
I talked to Elmer about slope issues in the silver rich zone. He said we'd need to define it because of where it was situated to determine what could be extracted. What we know is that it's open at depth but we'd need to know the concentration of the veinlets. I have the distinct impression that we'd be well served by proving that up.
There's enough money in the kitty at the 40% option to do 2 resources. This would put us in a position to sell to anyone. If we just had the 20% option that would complete 1 Resource Estimate and allow us to define the silver zone.
Enough said by me for now. I'll close with this. You all should know by now how a mine comes into being.
What Vette Said:
The whole point in this whole story, my 1st reason for ever buying, was to put Teck on the clock. This is what everybody wanted so bad. We all wanted Feasibility, even if it was $1 positive, to put Teck on the clock and force them to make an ownership decision..
Here we are....no more waiting for the Feasibility.
The Inferred is there, Teck knows it. Some companies get bought out just on Inferred, they don't even have a pre-feasibility. Others get billions just for Potential with almost nothing proven (Andean)
Then we have the whole other half of the Paramount zone and it was still open at 800m depth. Then we have the Discovery zone.
We have the port, and we apparently have 1 of the 3 spots on the NTL grid, it's just not officially announced. They added it to our cost 200 million !!
Insiders own 65%
Teck can now move us up to Feasibility complete line on their corporate presentation.
The ball is in their court. We know they have a right to 75% for almost nothing, but they don't want all those clauses attached to the other 25% and sold out to another.
Yes Teck is getting this whole project for 1/4, they'll never walk away from that. They just need to give CUU insiders the right price and it's all theirs.....
That's the next move...60 days...
Thursday, December 13, 2012
Copper Fox is heating up.
The volume is increasing as expected. The buyers are winning the battle and the price is staying above $1. I know many people would ask why should anyone want to see the price go down? In this world there's competition for money, infrastructure, jobs, investor attention and the list goes on. Mostly it's greed driven. There are people who want to accumulate on the cheap at the expense of investors who really can't afford a great deal of risk. They invested here based off pounds in the ground a solid company and the option agreement.
So some people want them to lose confidence and they want to discourage other retail from adding to the buying pressure. You see this so often that the pattern becomes a signal to those who know what they are looking for. If your goal is to make money then don't confuse it with your desires. This stock ran way over time and people who desired a fast buck didn't get it. But if your goal is to make money... hold. As far as we know, the BFS is going to come out next week.
There are other signs. Bashers who are usually paid are arriving on the discussion boards. That is a good sign. It's not 100% because they get the timing wrong too but it is a good sign that they thinks the time is right. The chart also indicates the time is right. We call it tree shaking. The price is deliberately driven down and yes, the guys doing it are taking small losses. They become the dominant bid ask because everyone else is in. That lets them move the price up or down at will. This often catches the last minute guys off guard. The last minute guys end up chasing the sp up and when the bite at market then the price drop 3 cents and they get worried. Some are dumb enough to sell at a small loss only to see the sp start to head back up. Don't be fooled.
Recently a fake email from the company was posted on a board. That's what I call going to extremes. One posters comments reveal some insight.
"Right now we, CUU shareholders, are living a disinformation nightmare caused by lack of verified/official information delivered from management."
The lack of info often imposed by black outs allows for the void to be filled with nonsense. I admit we get up to mischief when the company doesn't give us news on a regular basis. But hey, speculation is fun. It's not fun when it is deliberately false with the intention of leading people astray.
This weekend we'll all sleep well. Next week should be exciting.
So some people want them to lose confidence and they want to discourage other retail from adding to the buying pressure. You see this so often that the pattern becomes a signal to those who know what they are looking for. If your goal is to make money then don't confuse it with your desires. This stock ran way over time and people who desired a fast buck didn't get it. But if your goal is to make money... hold. As far as we know, the BFS is going to come out next week.
There are other signs. Bashers who are usually paid are arriving on the discussion boards. That is a good sign. It's not 100% because they get the timing wrong too but it is a good sign that they thinks the time is right. The chart also indicates the time is right. We call it tree shaking. The price is deliberately driven down and yes, the guys doing it are taking small losses. They become the dominant bid ask because everyone else is in. That lets them move the price up or down at will. This often catches the last minute guys off guard. The last minute guys end up chasing the sp up and when the bite at market then the price drop 3 cents and they get worried. Some are dumb enough to sell at a small loss only to see the sp start to head back up. Don't be fooled.
Recently a fake email from the company was posted on a board. That's what I call going to extremes. One posters comments reveal some insight.
"Right now we, CUU shareholders, are living a disinformation nightmare caused by lack of verified/official information delivered from management."
The lack of info often imposed by black outs allows for the void to be filled with nonsense. I admit we get up to mischief when the company doesn't give us news on a regular basis. But hey, speculation is fun. It's not fun when it is deliberately false with the intention of leading people astray.
This weekend we'll all sleep well. Next week should be exciting.
Wednesday, December 12, 2012
Inmet rejects offer CUU value is....?
"TORONTO — First Quantum Minerals Ltd. has offered $4.9-billion for Inmet Mining Corp. in a bold attempt to get its hands on Cobre Panama, one of the largest mining development projects underway anywhere in the world."
A side by side comparison to Inmet's 80% owned Panama deposit is a little difficult. On an eq basis they are pretty close. Some of the side issues like capex involving the building of a coal fired power plant are what causes the blur. For example, CUU's Schaft Creek will run on cleaner power that's being provided by the grid. The capex will be lower for that reason and the plant size is less. But without going into fine detail let me say that CUU has the better product in a better country.
At roughly $6 billion for the whole deposit in Panama you get the idea that Schaft Creek has a much higher value than the share price would indicate. It translates into $1.5 billion before the extras like the 4 times expenses and the Port facilities. Just having you development costs carried by Teck is a huge burden off your back. Then add in the original Area of Interest Royalty. To top it off, Schaft Creek has been hardly touched with a drill. We know the deposit in the main area does beyond what the drill proved up. How deep? The Titan done on the main area suggests there's a deposit under the deposit. How that will be mined won't be known for a decade or two.
The scope for increasing the deposit resource and reserves at SC rivals any major deposit out there. This year the drill were halted then called back and then suddenly halted again. We can only assume that Teck decided they had enough evidence to make a confident offer. While the media cites Teck as being a potential buyer for Inmet we have to ask why would they? They have Relincho and SC. Together, these two properties are enough to keep them with a healthy supply while reducing the cost per pound for decades to come. It is true that the last of the giants are being gobbled up but Teck also has Galore.
At about .58% average grade and a negative cost per pound SC will be hard to beat by any deposit. Ivenplats takeover of the stolen deposit is an example of the lengths companies will go to to secure supply. I do not think such properties are secure at all. Given the long life spans I think we are bound to see more M&A in safe havens like Canada.
As for low grade low IRR. SC has high grade starter pits that will take a decade to deplete. The IRR in terms of jumbo sized deposits is very respectable. I'm looking forward to reading the BFS due out next week.
A side by side comparison to Inmet's 80% owned Panama deposit is a little difficult. On an eq basis they are pretty close. Some of the side issues like capex involving the building of a coal fired power plant are what causes the blur. For example, CUU's Schaft Creek will run on cleaner power that's being provided by the grid. The capex will be lower for that reason and the plant size is less. But without going into fine detail let me say that CUU has the better product in a better country.
At roughly $6 billion for the whole deposit in Panama you get the idea that Schaft Creek has a much higher value than the share price would indicate. It translates into $1.5 billion before the extras like the 4 times expenses and the Port facilities. Just having you development costs carried by Teck is a huge burden off your back. Then add in the original Area of Interest Royalty. To top it off, Schaft Creek has been hardly touched with a drill. We know the deposit in the main area does beyond what the drill proved up. How deep? The Titan done on the main area suggests there's a deposit under the deposit. How that will be mined won't be known for a decade or two.
The scope for increasing the deposit resource and reserves at SC rivals any major deposit out there. This year the drill were halted then called back and then suddenly halted again. We can only assume that Teck decided they had enough evidence to make a confident offer. While the media cites Teck as being a potential buyer for Inmet we have to ask why would they? They have Relincho and SC. Together, these two properties are enough to keep them with a healthy supply while reducing the cost per pound for decades to come. It is true that the last of the giants are being gobbled up but Teck also has Galore.
At about .58% average grade and a negative cost per pound SC will be hard to beat by any deposit. Ivenplats takeover of the stolen deposit is an example of the lengths companies will go to to secure supply. I do not think such properties are secure at all. Given the long life spans I think we are bound to see more M&A in safe havens like Canada.
As for low grade low IRR. SC has high grade starter pits that will take a decade to deplete. The IRR in terms of jumbo sized deposits is very respectable. I'm looking forward to reading the BFS due out next week.
Saturday, December 8, 2012
Copper Fox News. What does it mean
Cheap money is good money. Last time I talked to the co they said they had all the money they needed. So why extend the warrants? First, at about $1.35 the company is signalling to us that the sp is about to correct. Second, we all know full well that the finale is coming for the BFS. If that holds true we'll need money for Arizona. Plain and simple. I suggested a while back that the company should just retain some cash from the sale to increase share holder value in the spin co. It also sets them up to go full tilt on Az. Last, why not throw EE a bone one last time? It was his money that saved the company in the first place.
I also touched on the subject of CUU needing a cut off point. It seems many people got this wrong and think the warrants are signalling a delay and more dilution. But, since the money will be retained in Az we would have had to go get it anyway. This way we don't pay fees for it and we are writing agreeable terms. So there's no harm in doing it now. There's been some questions as to why now and what about the ones that expired and what about vested shares? CUU has tended to follow the letter of the law. In the current situation there was a need to NR the extension and the extra value of hinting that the sp is going to put those in the money. Vested shares are just that, vested. No BFS yet, no expiry. Did anyone think this was going to go this long? I bet no one did.
There a lot of unhappy people making a lot of noise about the warrants and vested shares. They don't like the dilution and they don't think management has earned those shares they handed out. I completely understand. My own report card on the management shows us a student who is struggling to get a C-. That's not a great career starter. Elmer wanted to do a Hunter but this is no way to kick that off. In time it will fade from memory and it is better than Ivenplats past record. (You know who I mean). Still, I would have preferred a happier ending. (Much earlier). So now we have to content ourselves with the quality of the ending.
I've kept track of the stock I would have put money into and CUU has to come in pretty big just to make up for the lost opportunities. I think it can but I've reached the point where it will be hard for CUU to meet that objective. By the end of the year I doubt CUU can make up the lost opportunities. On the bright side I have built up a fair bit of dd for the next round. I've actually got my next 5 years worked out.
I think the outside date is the second week of Jan. I've been told enough times that if it comes sooner it must be dropped. The earliest is Monday. Xmass may drown it out so timing sucks but people will write about this deal. A lot of people will want to publicly pat themselves on the back.
This could end up as a 10 billion dollar deal. The foundation of that would be based on the strength of the BFS. We have to have the legal foundation for the execution of the contract. We have to make sure nothing can stand in the way of collecting our pay. Each item in the contract has to be thoroughly verified. So we should expect that the delays are due to us making sure there's no disagreement. I take this to mean that CUU intends to make the deposit available to other parties and Teck at the same time. This will give Teck time to think about it. They already have access to all the information. CUU may get offers for it's JV portion outside of Teck's control but Teck does have a built in head start.
This may be one of the first times a Jr got the jump on a major. CUU has made every mistake they could along the way and struggled through mistakes piled on them by contractors and finally arrived intact with a BFS. An incredible journey.
So we end up with nearly 4 billion pound eq copper that we own outright. We also own shares of a royalty under the Liard agreement. We own land that is connected to the trend and the land that will become the access point. We own land that will be needed for storage. Best of all, we own the option agreement that Teck has to satisfy. I say Teck has to satisfy it because the ball is going to be in their court in under 2 weeks. Some armchair experts say that the weight of the option agreement really gives Teck just 2 options and a few dissenters say Teck will be forced to take the 20%.
What's 4 billion eq of copper worth? With an attached mine you could expect up to 30%. It comes with a royalty attached to the whole mine not just CUU's portion. It comes with built in finance for the mine and the convenience of just being handed the keys or accepting a check every month.
Should Teck take 20% then CUU has the right to sell the project. With 80% of the deposit and the royalties in hand plus the approvals largely in place to make this a mine, I think it would not be that hard to find buyers. Having that large of a portion, about 16 billion pounds eq copper, they could lower the price on the pounds and still come out big.
For those of you who think CUU can never raise the money to build the mine. Royal Gold would be in the mix in an instant. Barrick would also have to line up. CUU would have no problems selling mineral streams and those companies could arrange the funding. It would take some time but I think CUU could come out a little better with about 40% equity remaining. Poland is in the hunt for more BC copper. They like it here. I can't see a consortium passing this up if Teck took a back seat. I suspect Teck has already asked Elmer to middle the agreements and that's why he was appointed to the Bod of Liard.
Stay tuned. If I get time I'm going to do a more precise review next week.
I also touched on the subject of CUU needing a cut off point. It seems many people got this wrong and think the warrants are signalling a delay and more dilution. But, since the money will be retained in Az we would have had to go get it anyway. This way we don't pay fees for it and we are writing agreeable terms. So there's no harm in doing it now. There's been some questions as to why now and what about the ones that expired and what about vested shares? CUU has tended to follow the letter of the law. In the current situation there was a need to NR the extension and the extra value of hinting that the sp is going to put those in the money. Vested shares are just that, vested. No BFS yet, no expiry. Did anyone think this was going to go this long? I bet no one did.
There a lot of unhappy people making a lot of noise about the warrants and vested shares. They don't like the dilution and they don't think management has earned those shares they handed out. I completely understand. My own report card on the management shows us a student who is struggling to get a C-. That's not a great career starter. Elmer wanted to do a Hunter but this is no way to kick that off. In time it will fade from memory and it is better than Ivenplats past record. (You know who I mean). Still, I would have preferred a happier ending. (Much earlier). So now we have to content ourselves with the quality of the ending.
I've kept track of the stock I would have put money into and CUU has to come in pretty big just to make up for the lost opportunities. I think it can but I've reached the point where it will be hard for CUU to meet that objective. By the end of the year I doubt CUU can make up the lost opportunities. On the bright side I have built up a fair bit of dd for the next round. I've actually got my next 5 years worked out.
I think the outside date is the second week of Jan. I've been told enough times that if it comes sooner it must be dropped. The earliest is Monday. Xmass may drown it out so timing sucks but people will write about this deal. A lot of people will want to publicly pat themselves on the back.
This could end up as a 10 billion dollar deal. The foundation of that would be based on the strength of the BFS. We have to have the legal foundation for the execution of the contract. We have to make sure nothing can stand in the way of collecting our pay. Each item in the contract has to be thoroughly verified. So we should expect that the delays are due to us making sure there's no disagreement. I take this to mean that CUU intends to make the deposit available to other parties and Teck at the same time. This will give Teck time to think about it. They already have access to all the information. CUU may get offers for it's JV portion outside of Teck's control but Teck does have a built in head start.
This may be one of the first times a Jr got the jump on a major. CUU has made every mistake they could along the way and struggled through mistakes piled on them by contractors and finally arrived intact with a BFS. An incredible journey.
So we end up with nearly 4 billion pound eq copper that we own outright. We also own shares of a royalty under the Liard agreement. We own land that is connected to the trend and the land that will become the access point. We own land that will be needed for storage. Best of all, we own the option agreement that Teck has to satisfy. I say Teck has to satisfy it because the ball is going to be in their court in under 2 weeks. Some armchair experts say that the weight of the option agreement really gives Teck just 2 options and a few dissenters say Teck will be forced to take the 20%.
What's 4 billion eq of copper worth? With an attached mine you could expect up to 30%. It comes with a royalty attached to the whole mine not just CUU's portion. It comes with built in finance for the mine and the convenience of just being handed the keys or accepting a check every month.
Should Teck take 20% then CUU has the right to sell the project. With 80% of the deposit and the royalties in hand plus the approvals largely in place to make this a mine, I think it would not be that hard to find buyers. Having that large of a portion, about 16 billion pounds eq copper, they could lower the price on the pounds and still come out big.
For those of you who think CUU can never raise the money to build the mine. Royal Gold would be in the mix in an instant. Barrick would also have to line up. CUU would have no problems selling mineral streams and those companies could arrange the funding. It would take some time but I think CUU could come out a little better with about 40% equity remaining. Poland is in the hunt for more BC copper. They like it here. I can't see a consortium passing this up if Teck took a back seat. I suspect Teck has already asked Elmer to middle the agreements and that's why he was appointed to the Bod of Liard.
Stay tuned. If I get time I'm going to do a more precise review next week.
Thursday, November 29, 2012
Copper Fox Moves Forward
I had a brief correspondence with CUU. Let me clear the air. IR is in the dark just like the rest of us. IR is not in blackout, they are blacked out. This is an important distinction. I suggested people call IR for guidance only. All IR can offer at this point is experience. So I told people to call and ask for examples and personal opinions. NOT inside information. What Jason can supply is his opinion NOT trading advice. Another important distinction. I readily acknowledge that there are no exact comparisons. There simply has never been a deal like this before. This one will set an example.
Let me tell you what I do know.
Had the BFS came out right on time I would have been disappointed. The reality is that Teck engineers need to rake this over the coals. Our prepare rs and reviewers are all working together to shake this baby down because Teck wants a mine. If they didn't do this I would know they were not serious. Then I would have been really worried about my money. I in fact did start to sell and was going to go really negative and warn people off until I was able to gain enough confidence that this process was in fact happening.
I said the company needs to reword their standard line. I am right. They say "we are working on completing the BFS". Technically, this is true but it is misleading. The BFS is done. What they should be telling us is what processes are taking place now. We all know Teck has an interest by way of the option agreement. Why they leave it up to us to figure the status out is beyond most. For me, it is an intense puzzle. I like the razors edge. When I hit them with a hard curve ball it's because that is where the evidence is leading me. Equally, when I qualify something I come out with that promptly. I neither love nor hate the stock. I thrive on evidence and clues.
Lately people have talked up the idea of bombarding the co for answers. Well, I'm providing those tonight. I can say things that the co and IR can't. Why call the co if you doubt what you're being told? Call another geo ceo that you know and ask for an opinion. I do that regularly. Hey, is rock and roll you know. They are all intensely aware that they are in a battle for investor share and that means controlling head space too. You know this because you see their ads. By getting another's view and remembering it will be a bit biased, you can get a better understanding of where we are. But since I started this it seems fitting that I get those answers.
How long is too long? Yup, I told you this would wrap up next year. Boy did I take a beating on agora for it. Hmmm, was it worth it? Yup. We all need to square that with ourselves. Yes, I know people are being forced off their positions and man that sucks. I've drawn down huge myself. But we are here now and like it or not we might as well finish the game. So how much longer?
CUU has an obligation to us indeed. The furthest date I could council is Dec 20. Beyond that both CUU and Teck would be failing in their social obligation to us and probably run afoul of disclosure rules. I suspect the heat will really ramp up after the first week of Dec. I will not be surprised if someone lobs a legal grenade at the co. They will have grounds. Will those grounds bear out? I don't think so. I think the co can establish that they are doing everything they can to advance our cause. There's no point in rehashing the past failures. But in light of those, if you were Teck would you just accept the BFS? I say no bloody way.
I hold out hope for a resolution in early Dec and not the later date. I'd like to think I'm right but I don't know the full extent of how bad the last failure was. (None of that was on CUU).
There are a couple other things I'm working on. If I think they are accurate I'll blog it here.
Let me tell you what I do know.
Had the BFS came out right on time I would have been disappointed. The reality is that Teck engineers need to rake this over the coals. Our prepare rs and reviewers are all working together to shake this baby down because Teck wants a mine. If they didn't do this I would know they were not serious. Then I would have been really worried about my money. I in fact did start to sell and was going to go really negative and warn people off until I was able to gain enough confidence that this process was in fact happening.
I said the company needs to reword their standard line. I am right. They say "we are working on completing the BFS". Technically, this is true but it is misleading. The BFS is done. What they should be telling us is what processes are taking place now. We all know Teck has an interest by way of the option agreement. Why they leave it up to us to figure the status out is beyond most. For me, it is an intense puzzle. I like the razors edge. When I hit them with a hard curve ball it's because that is where the evidence is leading me. Equally, when I qualify something I come out with that promptly. I neither love nor hate the stock. I thrive on evidence and clues.
Lately people have talked up the idea of bombarding the co for answers. Well, I'm providing those tonight. I can say things that the co and IR can't. Why call the co if you doubt what you're being told? Call another geo ceo that you know and ask for an opinion. I do that regularly. Hey, is rock and roll you know. They are all intensely aware that they are in a battle for investor share and that means controlling head space too. You know this because you see their ads. By getting another's view and remembering it will be a bit biased, you can get a better understanding of where we are. But since I started this it seems fitting that I get those answers.
How long is too long? Yup, I told you this would wrap up next year. Boy did I take a beating on agora for it. Hmmm, was it worth it? Yup. We all need to square that with ourselves. Yes, I know people are being forced off their positions and man that sucks. I've drawn down huge myself. But we are here now and like it or not we might as well finish the game. So how much longer?
CUU has an obligation to us indeed. The furthest date I could council is Dec 20. Beyond that both CUU and Teck would be failing in their social obligation to us and probably run afoul of disclosure rules. I suspect the heat will really ramp up after the first week of Dec. I will not be surprised if someone lobs a legal grenade at the co. They will have grounds. Will those grounds bear out? I don't think so. I think the co can establish that they are doing everything they can to advance our cause. There's no point in rehashing the past failures. But in light of those, if you were Teck would you just accept the BFS? I say no bloody way.
I hold out hope for a resolution in early Dec and not the later date. I'd like to think I'm right but I don't know the full extent of how bad the last failure was. (None of that was on CUU).
There are a couple other things I'm working on. If I think they are accurate I'll blog it here.
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