RE:RE:RE:Jan PresentationHi Sooner, I agree that some will prefer not to use NPV in negotiations whilst others will prefer to.
Now, as far as long-term prices are concerned. Does any one (in their right mind) believe we are going to go into an extended period of deflation while we are still in the fiat currecy environment? The mantra with fiat is "inflate or die". If the CURRENT 3 year average gold prices are above $1,700 an ounce and we expect inflation indefinitely into the future, there can only be one direction for long-term prices and that is higher. This would lead to higher NPVs being agreed upon in any negotiations.
If a suitor wanted to sit down with the BoD during negotiations and attempt to persuade them that we are going back to sub $1,500 gold prices ala 8 years ago, the BoD should stop negotiating with them because they are not engaging in good faith dialogue.
It's no secret the dollar is dying, which means ever more higher prices year by year. Does anyone think otherwise?! But, hey, if RIO wants to trot out an unrealistic lowball figure and create a horrible first impression, they are free to do that. I just bet NEM would love to see RIO float $3 the same way that a tennis player loves to see a lazy pop-up near the net which he will smash into his opponent's face. Any legitimate suitor (NEM or other) could easily tear up a lowball offer by RIO and take the lead chair in negotiations.
The environment isn't quite there yet for buyout talks to heat up. There is some merit to your observation that the parties are probably waiting for the market cap to catch up and the market cap is mostly dependent upon sentiment. Why hasn't sentiment changed yet? I figure because too many believe that the FED will somehow magically intervene to propel the general stock market, contain inflation and metal prices all at the same time avoiding a serious recession. Well, let them enjoy the show, our time will come when the masses wake up to reality and realize that the metals are the sector one needs to be in for wealth protection and wealth enhancement.