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Gold/Mining/Energy : Canadian Diamond Play Cafi
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To: Bloomfield who wrote (4778)11/22/2006 4:04:00 PM
From: WillP  Read Replies (3) of 16205
 
Bloomfield:

Define financing?

I assume you're talking about debt, not equity. You might find it enlightening to chat with guys who have been through that wringer. Bankers are notoriously careful.

Frankly, even under Dr. Goldie's rosy share and diamond price scenario, an equity sale seems a poor alternative.

Selling $450-million worth of shares would add 30 million shares to the clock, even at the $15 per share figure some bandy about.

Would you reduce your future cash flow by one-third over a 15-year period just to get a dividend three years earlier?

Had Aber been carried to production, it would have had barely half the shares outstanding that it now does, and would now be receiving all the cash flow from Diavik -- at nearly double the current rate. Remember as well that a majority of Aber's share of the cash to pay for the mine came from debt.

There are big differences between diamonds and commodities like zinc, copper or oil.

Regards,

WillP
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