RE: RE: RE: RE: ERD CEO INTERVIEW , CNBC ASIA
I am not sure what price would be willing to be paid for it but a crude NPV for Zuun Mod and Donkin easily sets it into at least 1 dollar territory even with the most generous of discount rates. Zuun Mod has 400 million pounds of Moly and their share of Donkin is around 125 million tonnes of met coal plus cash per share of 13 cents so I see that as a reasonable valuation.
Perhaps he is also referring to a buy in by a large company to own some of the shares as well. I think the odds that there is at least 1 large holder who is frustrated and wants out. I saw it with ZAZ selling Lehman Bros share, we just saw it on NNE.A with the Salman cross, and I think we just saw the end of it with ARG and I am pretty sure that is what we have with UMJ. As soon as these rocks are taken out of the backpack the climb up the hill is going to be great.
If they aren't bought out it really doesn't matter as they are funded until the end of 2011 so there is no need for a cash infusion. When Xstrata moves forward with Donkin ERD gets to wait out the first 100 million of expenditures before their share is due so there is an awfully good chance they can come up with their share of development at that point.
Meantime they have identified a number of copper gold porphyrys in Mongolia and have a great exploration project on the go there. As well there is 80 million tonnes of granite on a rail line in the southeast USA that they have NSR rights to. I get a reasonable value of over a dollar right now. With the coal mine running my valuation gets better, much better.
Of course the financial crisis has dropped this price off to this level and it will take some time to come back. I would suggest if you have any questions that you write Peter. pakerley@erdene.com
Cheers and Good Luck