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Strategies & Market Trends : Winter in the Great White North
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To: marcos who wrote (7413)1/26/2008 12:11:19 PM
From: tyc:>  Read Replies (1) of 8273
 
The other thread is busy discussing the lending crisis, so I resort to this old stamping ground to pursue our mining speculation .

Surely, Claude's reference to "strategic decisions" to be made by Metallica, makes MR one of the most interesting near term mining speculations.

You compared the situation to the disposal of Inmet's Antamina participation. After recovery of sunk costs IMN made a profit of $7M on the initial sale to Noranda and Teck, and subsequently $22M from the sale of its net profits royalty.... a total of ~$30M in profits from its original 50% interest in Antamina.

If IMN made $30M from the sale of its 50% interest in Antamina, what profit could MR look for if it disposes of its 30% interest in El Morro ? That's what makes Metallica currently a most interesting speculation.

In view of the fall in value of the dollar, and the increased value of the end-products gold and copper, my guess is that $50M in profit would be conservative (of which it has already received $10M). Metallica is a gold company; it will reinvest that mining profit accordingly . It deserves the market to afford it the usual gold-mining premium !

Are you prepared to speculate ? It doesn't matter WHEN the option is exercised. Metallica owns the option now. How much is it worth?... Right ?
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