What's next for DM Layoffs at TMM.. should be no surprise.. the 'next phase' of the project is ordering the mothballs and probably, for appearances, doing some minor work.. No more drilling needed, the project needs a much higher output rate with lower capital requirements.
Meanwhile, Anto gave away the control they seeked while negotiating the TMM agreement. Now that we have the PFS in hand, it is clear why they droped the option. They're now just going to watch what DM will do. Very telling, as there is little reason to have faith in DM's management skills based on history. The standstill agreement (no takeover) is still in place, so Anto can't make a move for DM before July 2016. But even if they could, they wouldn't.
It's not the DM price tag. I see the discussion on this board on DM enterprise value, but it's really not about that. Any buyer would additionately need to pour a large amount of money in just to complete BFS. A normal BFS is already expensive, but just think of all the work needing to be done to maybe get to some economic sense out of TMM. Then there is a long and cumbersome permitting process. Remember, the final consummation of an Anto excercise of the 25% option was explicitly contingent on receiving permits.
Anto can be patient as it has plenty, plenty of time to wait. Well they're not waiting, but are actually very busy with their other projects. Given the very disappointing PFS I also think it is highly unlikely another major steps in at this point. I especially don't see area players Teck or Glencore coming in - they have enough work at hand at their own projects and will certainly not be keen to add a project with even higher permitting risk than their own.
My take is that DM will try to raise money in the coming months on the back of its exploration land package with the TMM kicker, stressing all the copper and nickel in situ. Fair game, but I myself am not interested in DM exploration. I'm not the only one I think, given the earlier failed and aborted Duluth Exploration IPO. Let's see if DM even manage to raise anything, which I am unsure of. Why would anyone put money in DM just so they can pay the required millions in interest plus overhead? Your usual small junior raise to stay alive is not nearly enough here.
What is likely at this point, absent a junior mining craze or metal price blowoff, is that DM first has to somehow re-negotiate the $30MM debentures to equity. And the clock is ticking.. to the disadvantage of shareholders. The sooner, the better. DM is at gunpoint. If time runs out before re-negotiation and DM does default on its interest payment, CIBC and Cheung Kong might end up holding the vast majority of DM.
On the conference call, Dundas was in denial on pretty much everything, including the worst case scenario question. Well, you got your worst case scenario right there. And it's not even low probability.
My 2cts, GLTA.