Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: tyc:> who wrote (35457)	3/9/2007 1:40:56 PM
From: hank2010	Read Replies (3) of 78419

"Teck used to own 100% of Schaft Creek. Why would they agree to pay present owners 4x the money they spend to buy back a 75% interest ? Why wouldn't they spend their own money ?" This is a very common format for majors to follow. Thinking goes like this. Chance of success on a project is ??? 1 in 100. Juniors can raise risk capital easy, juniors can provide man-power which is in short supply to-day. Let juniors spend their cash. The ones that are successful (1 out of 100?), we can buy back in for 4 x the money they spent on the project. therefore we only spend 4% of the risk funds that we would if we kept everything in house. Also situations where, geol. of jr rank can not get management to fund his favorite project. Therefore go get a junior to do a deal to keep your project alive. If successful geo is a hero. If unsuccessful, no company money spent, therefore no neg. impact on geol. career chances.

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