lwc buyout 1.50 to 3.00
When is a "technical success" a home run?
Placer, which had stopped mining Endako in 1982 and resumed in 1986 with production capacity expanded to 28,000 tpd, sold the operation in June 1997 to Thompson Creek Mining Company and a Japanese company, which now goes by the name of Sojitz Moly Resources Inc. Their purchase was not particularly timely, and when molybdenum prices started to rise in 2004 it was greeted as a godsend. Finding additional ore during the intervening period to prolong operations beyond 2011 was not a priority for Thompson Creek and Sojitz, which explains why no effort was made to stake and explore Nithi Mountain while it was open. But after Davis had staked Nithi Mountain and approached Endako with the question of their willingness to custom mill Nithi Mountain ore, they responded that they would be happy to process Nithi Mountain ore if Leeward could establish a resource of 100 million tonnes of 0.1% molybdenite (0.067% molybdenum). This was music to the ears of Davis, who figured that while mother nature would never grant him a world class discovery, she might, if she was not paying attention to context, give him what would otherwise be deemed a "technical success". Finding 100 million tonnes of 0.07% molybdenum in the middle of nowhere was tantamount to failure, but finding this resource down the road from a major mine with roasting capacity that would run out of ore in 5-10 years could translate into a buyout offer worth $100-$200 million if molybdenum prices held up. At the time Leeward had only 30 million shares fully diluted, which would have translated into a target buyout price of $3-$6. Today fully diluted Leeward has 68 million, so the buyout target has shrunk to $1.50-$3.00, still a respectable target given the current price below $0.20. |
