RE: not sure if this is commonly known or not:CHD should just get on with it. That is, build the mine and start producing copper. If LUN wants CHD they pay up. They have a stable of companies just like CHD today with the same strategy. If the mine is the real deal LUN takes CHD out. Simple as that. They have 20% today. Whether they have more in friendly hands is pure conjecture. Can't see why a fund would line up with LUN to get less than fair value. LUN knows what they have here. If another company wants to pay up then LUN has a choice to make. Again simple as that. What will be telling is CHD's need for capital to build the mine. LUN to maintain their 20% will have to step up. That decision has to be coming soon. That will tell us whether they believe in the project. The Koreans 30% interest is a red herring I believe. They presumably want to make some money in a quality project and want some supply stability. They can maintain both with or without CHD in the picture. One can debate the long term price of copper; analysts are saying $1.80 now, up from the last time I saw a price us in a valuation CHD model. With copper at +$3.00 today CHD has some room. It would be helpful though if management would come out of the closet on two points; cost to be build the mine and cash costs to produce the copper. LUN came out recently saying the cost to build a mine in Russia I recall was double what the street was saying. Who knows if that was true or not but atleast it put a stake in the ground in terms of what management was thinking. CHD management and the Board as reps for the shareholders owe us some transparency on these issues in my opinion. As a last point CHD shareholders should not concern themselves with whether a LUN takeout or some other takeout happens or not. From what is known so far, Marcona appears to work and apparently generates a solid return for shareholders as the mine is built and approaches production. I,for one, am happy to wait it out. If LUN or someone else wants control CHD sooner and is prepared to pay a fair price I am also happy to listen.
In my mind these are the issues CHD faces. CHD stock price was $1.25 not long ago. Now $0.80. What has changed? Copper spot price about the same at +$3 and long term price analysts model has moved up from $1.50 to $1.80. CHD resource continues to get better. These revenue metrics ought to support a higher value. As an offset, one might conclude capital and operating costs are higher now but that is purely a guess on my part. Has anyone seen a recent analyst report from the 6 or 7 houses that follow CHD that could provide some colour on the cost side of the equation?
Save the sniping, just the facts as you believe them it is fine.
Coyote13