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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Rocket Red who wrote (58776)	8/5/2006 12:24:46 PM
From: PaperPerson	Read Replies (1) \| Respond to of 312821

Re the teck cominco - copper fox claw-back terms: These terms are NOT crystal clear in the 2004 press release issued by copper fox, or even discussed in roulston's little writeup, but are covered in a recommendation by northern securities of last fall (posted on copper fox website). I quote from ronald wortel of northern securities in his sept. 2005 writeup. "In addition, the option agreement includes a back-in right for Teck Cominco, which it must exercise within up to 120 days of the delivery of a positive feasibility study. If the back-in right is not exercised, CUU may grant Teck Cominco a 1% net smelter royalty or, if CUU assigned the option agreement to a public company whose shares are listed on a recognized stock exchange, shares of that company having a value of $1,000,000. If Teck Cominco does exercise the back-in right, it may earn a 20% interest by matching prior incurred expenditures, a 40% interest by matching three times prior incurred expenditures, or a 75% interest by incurring four times prior expenditures and arranging all production financing. The option agreement includes provisions for joint management and for dilution of interests in proportion to expenditures, including reversion of either party to a defined net profits royalty if that party’s interest is diluted below a 20% working interest in the joint venture." My reason for looking carefully at this: This spring, I almost bought Atna Resources. it's a very sharp exploration company with multiple nevada properties. The most promising is/was Pinson. I was shocked to see how atna tanked this spring when barrick executed its clawback on the pinson property! I think you can probably come close to the date on that announcement by looking at this six month chart from yahoo! chart.finance.yahoo.com Atna was a c2.30 on March 27 and by april tenth it was c1.58. now it is c1.47 I may still buy Atna at this lower price with their 30 percent carry on Pinson. Barrick has to spend a s..load of money to get the big position in the mine back in its name. regarding copper fox, another factor is that that area has just seen a hostile takeover attempt: barrick trying to buy novagold. this shows the big boys interested in scarfing up turf in that region, and would lean me in the direction that teck may want to get its property back from copper fox a year from now. On the other hand: It could well be that in this case, the clawback would be more lucrative for copper fox than it was for atna. maybe somebody here would take the time to do that. I have not. Also, we are probably at least a year away from when Teck would execute the clawback, so there is plenty of time to make money on the trade in between now and then, if there is a then :) Regards, Michael