RE:RE:RE:RE:RE:RE:Coffee & CasinoSooner, I fully expect that RIO will buy WRN via a share exchange. The $$ saved by issuing shares will more or less cover the capex.
Remember, in any NPV calculation, the PV is determined by taking capex into consideration already. I know this project is easily over $4 billion in NPV fully considered. If RIO issues around $3 billion in shares that yields around a 50% return. Granted, their is always some risk, but if your best case scenario is 50% ROI, I think there is plenty of buffer in there to account for some risk and still come out with a tidy ROI for your shareholders.
The buyout will be north of $2 billion and probably south of $3 billion. This is a range that will yield between $15 - $23 a share. Split the difference and, well, I am starting to sound like a broken record aren't I?
Or let's put this into the perspective that I am thinking of: in terms of a share exchange ratio, I would say we will fall somewhere between 0.17 shares of RIO on the low end to 0.25 shares of RIO on the high end. I am expecting about 0.23 personally. There you have it, for the "cost" of issuing about 31 million shares, RIO can snatch up the crown jewel of the Yukon and obtain the generational benefits that if will offer: diversification in their pipeline and access to mining critically needed mineral wealth of the future. It will be accretive to their shareholders and it will allow WRN shareholders to tap the ability to get Casino up and running.
Win-win if you ask me.......