Probably something they've considered, this management is thoroughly familiar with all aspects of the business including financial engineering ... but it would be interesting to hear their reaction, hmm
Forgot to thank Michael for his phone call report upthread ... i've never spoken with them, just going by public statements, their history, and the respect they get from people whose judgment i value ... should also thank M for the Roulston piece [another fellow worth listening to imho] - freewest.com
These two bits kind of jumped out at me -
'The effective cost for the ounces
it now has entitlement to cost $72.87 /
ounce in upfront payments plus either
$350 or $400 per ounce as delivered.'
...
'The company’s strong management team
is on the lookout for further metal stream
purchase agreements. They expect to be
able to use cash flow and debt to fund
future deals, thereby limiting further dilution.
The company aims to add two or
three metal stream deals to its portfolio
each year.'
The gold price trend will do a lot for the share, but there's a limit, what it needs to really rock is a clear path to growth, more deals of high quality with the funds necessary for them raised with as little dilution as possible ... and a perception of a steady stream of these streams, which don't come ready-made and you can't find them on craigslist either ... hard to say how many ounces they can come up with under various market conditions over the years, this provides enough for unknowns that, should those unknowns turn a rosy hue, will propel the stock really well, while a soggy grey colour won't ... but the warrants overhang at this point, probably their existence is holding back shareprice to some small degree even now, at the same time capital locked up in them is doing the company no good until they're exercised ... probably could use the funds in 2014 too of course, and then it will be usd60m, to take cad50m now would mean they had decent employment for capital in hand this year, which indication by itself could rock the stock
It took Lassonde and Schulich years to build the first Franco Nevada ... shareholders were well rewarded from early on, but not all at once, it came in many stages, chart looked like a set of stairs, and yes there were pullbacks, long boring periods too |
