AME JVIMO the only way to justify the AME/KGHM deal is if there are additional projects they partner on in the future, I talked at great length to both mckeever and the KGHM director of M&A when the original deal was announced, they both consistently stated their intention to work together on identifying and developing additional projects in the americas, KGHM CEO Wirth also stated this in several NRs
but the best intentions of both parties does not mean it will happen, the JV preliminary agreement did not include anything other than a loosely worded statement saying theyd like to work together, when asked how additional projects would be structured no one could provide a concrete example
so in my opinion until we see an actual 2nd and 3rd project we dont know if the AME/KGHM deal was good or bad for AME shareholders
the final signing of the agreement took 3 months instead of the originally planned 3 weeks, the wording in the NR indicates to me that the structure of the JV may have changed over the last 3 months and Im guessing Excell maybe put his mark on the final deal
From the NR
Abacus and KGHM have entered into an incorporated joint venture to conduct exploration over the 8,000 hectare property, acquire additional properties within a 5km area of interest, and engage in development, mining and operation activities in other prospective global mining regions.
additional properties in ajax!!
other prospective global regions!!
that sounds bigger than just ajax??
A Board of Directors for the Joint Venture Company has been installed, comprising two nominees of each of Abacus and KGHM with general responsibility and authority for the management of the affairs of the Joint Venture Company, and to establish objectives, policies and strategies relating to the Joint Venture and its operations. Mr. Marcin Mostowy, KGHM’s Risk Manager, will be appointed CEO of the Joint Venture Company, while Andrew Pooler, COO of Abacus Mining, will be appointed COO of the Joint Venture Company.
a JV company with B of D and CEO and COO, maybe Im wrong but arent JVs usually partnerships on a project where the operator reports to the other partners?? why a company with its own directors/mgmt??
"With the incorporation of the Joint Venture Company and its adequate funding structure, we can now look forward to leveraging our combined expertise to develop the Afton-Ajax project through to BFS and expand the resource to maximize the project’s economics,” remarked Jim Excell, Abacus’ President and CEO. “Concurrently, we intend to immediately present and evaluate other copper-precious metals situations to the Joint Venture that merit consideration, to build the future pipeline and create new value opportunities for our shareholders.”
expand Afton-Ajax!!
immediately present and evaluate other situations to the JV!!
build a future pipeline!!
create value for shareholders!!
Mr. Herbert Wirth, President of The Management Board of KGHM added: "KGHM's joint venture with Abacus has all the elements of a superior growth vehicle and an excellent fit. Abacus has an expert mining team with a demonstrated track record in the Americas and an ideally located project with encouraging economics that can now progress through to production without funding concerns. We believe this is a good start to other future expansive joint efforts.”
superior growth vehicle!!
other future expansive joint efforts!!
The Agreement with KGHM accelerates and largely de-risks the Afton-Ajax project through BFS and initial production while also providing the opportunity to build additional value for both companies by leveraging their respective strengths in pursuit of other exceptional opportunities in Canada and elsewhere.
build additional value!!
exceptional opportunities in Canada and elsewhere!!
it sure sounds to me like Excell/KGHM have fine tuned the JV structure to facilitate significant growth in the americas, KGHM wants 200,000 tons of copper production annually from the americas, ajax as it now stands will provide 50,000 tons, it appears theyve setup the JV company to find/develop the other 150,000 tons
if that happens and its done in a way that benefits AME shareholders, then AME could be in a position where the AME/KGHM deal brings additional value that would put AME in the same position they wouldve been in if they had kept 80% of ajax, my guess was that AME could at best have kept 50% of ajax but more likely only 30% in the end, so additional projects could easily more than make up for the 80% they sold cheap to KGHM
now we wait to hear what the first 'immediate' additional deal will be and how it will be structured