RE:RE:RE:RE:Upside leverage to copperI agree with you that is a fantastic mine and in the long run will be great.
Share appreciation opportunities have a somewhat different set of calculations.
When a commodity price goes up for unhedged sellers it is the high cost producer that benfits more on a percentage basis
- Company A produces copper at $0.00 per pound (maybe due to gold credits)
- Company B produces copper at $2.00 per pound
They are both stead state and priced according to earnings etc with copper at $2.90
Copper quickly moves from $2.90 to $3.50
- Profit at Company A goes up about 15% or so
- Profit at company B goes up about 75% or so (not exact but you get it)
Plus Company be was trading at 35% of NAV due to bankruptcy risk and this now goes away.
Company A was never at risk so it trades at 2X NAV
Company B benefits many times more than company A from a jump in the outlook and price for copper
Notgnu