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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Amelia Carhartt who wrote (95085)	9/29/2012 4:38:04 PM
From: carranza2	Read Replies (1) \| Respond to of 217542

Yes, he's 'very excited' about the Inmet Panama project, which he thinks is world class. NB: go buy shares when folks like Lassonde say they're 'very excited" as I think those Canadians have their own code when they speak and 'very excited' is as about as demonstrative as they'll get. I frankly wonder because Inmet is giving up 86% of its rights to precious metals (note, not the base metals, as I appreciate it, i.e., copper), of which Inmet owns 80% along with a Korean outfit and another whose name I don't recall. Accordingly, it appears that FNV will own the lion's share of gold production from this mine. If my math is correct, FNV will be getting 68.8% of the gold in exchange for its $1 billion investment. At those levels, it might be best for FNV to own the mine, run it, etc. Will the others - management - have enough skin in the game to make it worthwhile for them to run it properly? As a royalty owner, will FNV have enough say-so in how things are done to protect its huge investment? I liked the model where FNV makes a bunch of smaller investments thus spreading risk. An USD 1 bilion project doesn't really fit the model and may well increase risk. But I shouldn't complain too much, the markets love it. Shares up enormously since I bought on 6.05.2012 Edit: Just answered my own question: it appears that a very substantial part of the mine's future production will be copper, which is not subject to deal with FNV. Inmet gets some gold and all of the copper, FNV gets a big chunk of the gold, no Inmet stock dilution for capital (a good thing when miner's shares are beat up), Inmet incurs no debt to finance, no one is worried, everybody happy: business.financialpost.com