PLAYFAIR MINING - PLY . V Message Board

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Gold/Mining/Energy : PLAYFAIR MINING - PLY . V

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To: Claude Cormier who wrote (300)	8/17/2001 8:51:25 PM
From: geoffb_si	Read Replies (1) of 505

Hi, Claude: My belief is that they tanked well before the base metals went south. From memory, the original deal called for Teck to earn a 55% (?) interest in exchange for cash payments and work on the property (I can't recall how much work). HOWEVER, this deal also called for WTC to contribute their 45% interest in cash after Teck earned their interest. This was (IMO) the bad part of the deal for WTC, as they weren't carried to production. About 2-3 years ago, WTC got a cash call from Teck that forced them to rewrite the original JV. Teck now has a greater interest (70%?), and also took down a PP in WTC shares. If they do a 70/30 carried-to-production JV , they lose a lot of the speculative appeal of the property. If they do a 55/45 JV, they'll be hit with cash-call after cash-call, and will be at the mercy of the major. That's why it's so important to write a good deal up-front. I think a 60% carried-to-production JV deal would be ideal, but I don't think any major has offered this. That's why I say go-it-alone... Geoff

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