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Gold/Mining/Energy : TVX Gold
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To: nickel61 who wrote (840)4/13/2001 10:55:57 AM
From: russwinter  Read Replies (1) of 905
 
I am more than a bit skeptical about this Greek press report. Even if false, it does illustrate how determined and indeed vicious the NIMBY opposition is to Olympias. It sounds like the situation is going to continue to be drawn out well beyond the "by the end of the second quarter" court ruling TVX alludes to in their own IR. Looking at the chronology it seems the Greek legal system allows no closure on development issues. Therefore the most likely outcome is no outcome anytime between now and the due date on the converts.

Since there is no finality on Olympias (keep in mind that the rest of the Hellas holdings are unaffected), then the only strategy to me seems to be the following:

1. First and foremost execute the already announced normal course bid on the converts at this 50 cents on the dollar level. Use all available cash for the buy in. If these bonds are purchased in the open market at 50 cent area, $40 million would retire about a third ($80 m face value).

2. Execute the sale of TVXNA or if a fair price is not forthcoming, sell a plum like La Coipa to raise more cash. Take those funds and announce another tender of the converts at higher prices (say 70). Perhaps another $50 million face value could be picked up. If not announce a permanent tender bid at $3.00 to fix the conversion price on the remaining converts as they come due in March, 02.

3. The Olympias project could be one the biggest land use taking cases of all time. I assume that if Greece goes into the EU, that the concept of vesting (at least it does in the US)comes into play. In fact assuming Greece has a basic property law, some version of that must already be on the books? While admitting that I don't know Greek law, the only way the high court could completely stop this project would be to void a whole series of duly processed permits issued by the Greek government. They might simply pick one permit and send it back to the bureaucracy to be repaired (ripened is the legal term). In fact I think that's (monkey wrench)what will happen. But to just invalidate an entire mining law and overrule Greek governmental authority because "they don't like cyanide" would be about the most aggressive judicial activism imaginable. It just makes no sense because it opens up a huge can of worms (a taking) for the Greek government. And the fact that this project was sold to TVX by that government for a monetary consideration certainly makes such an action even more compelling. Ironically given the current state of the gold mining industry, TVX investors might actually come out better in a taking action than by operating a mine.

Any good land use attorneys on this thread?
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