Ralph.
Re AntaIMNa
I honestly cannot understand why the market (and all you people on the Winter thread) continues to ignore IMN's interest in Antamina.
Imn's interest kicks in as soon as the majors recover their equity. That means that until then, that is all that Teck and Noranda are getting; their money back ! Inmet already got its equity back when it sold its 50% interest to Tek and Nor for $70,000,000. It even booked a 7,000,000 profit then.
If you were going to enjoy an interest in a mine, would you prefer to put up the capital yourself ? Or would you prefer someone else to finance your interest on the understanding that they get their money back before you get anything ?
See:
Message 15195163
So now I am talking about the benefits of the mine; the amount everyone enjoys AFTER they get their money back. Noranda's share will be 33.7 %, IMN's share will be 3.3%, only a tenth of Noranda's. But Noranda's market capitalisation is 50 times that of IMN's. Doesn't that mean that $1,000 invested in IMN enjoys the same share of Antamina benefits as $5,000 invested in NOR?
I was reading an analyst report just a couple of days ago. He reckoned that it will be eleven years before anyone enjoys any benefit. In contrast, the president of IMN at the AGM said it could be as little as four years. The analyst however did say that at an 11% discount rate he put a present value of $30M.on IMN's share. How he can do this when no-one can have any idea what metal prices will be 11 years from now, I don't know. But if he is right, that 11% discount rate means that the asset will have a present value of $90M just before IMN starts to get payments. The PV will grow at an average rate of $5,000,000 per annum !
But it's nonsense to evaluate in this manner.... in the intervening period we are going to have periods of low metal prices and of high metal prices.... The perceived value of this asset will fluctuate accordingly.
I explained to marcus a few posts back why this asset is not on the balance sheet. I could go on... But please, someone, make a comment ! Explain to me why this is of no interest. |
