RE: RE: PNG Deal
Thanks for your reply. Lets take a look at what I posted. Myfirst comment, “From what I can see the PNG will put up $103 million over 4years. They will also receive 30% of the benefits from the patented technology.”See, Radio Australia's Jemima Garrett reports that PNG will contribute
$US103 million over a four-year period,with an initial investment of $27 million.
Mr. Pundari says PNG will also take a full 30% stake in thepatents on new mining technology.
https://www.radioaustralianews.net.au/stories/201101/3117898.htm
My second comment, ‘this information may be correct or itmay not but if it is the deal stinks for NUS”. In an email I received fromScott Trebilcock “The Solwara 1 project is expected to produce an average 1.3million metric tonnes per year of ore from the Solwara 1 resource.
The contained metal in this volume ofore is 91,000 tonnes of copper and 325,000 Oz of gold worth $890 million USD attoday’s prices …” Lets assume a conservative 20% rate of return = approx. $150million USD per year. Although we don’t know the specifics assume that at 30% thePNG government takes out conservatively $25 million per year in the first twoyears of actual production. NUS directors have been quoted as saying that aftera major JV partner(s) comes in they are 30 months out from production. 30months = 2 ½ years so in year 3 PNG could end up with a payout of $25 millionand lets assume the same in year 4. Thus, my comment “If another JV partner(s)come in the PNG will end up paying the 4th and maybe the 3rd payment fromprofits and would not actually have to put up any funds.” This seems to me likesomething for next to nothing although although they have approved a huge underwater mining lease and environmental approval. My next comment “If the deal has been signed NUS would haveto make a News Release so my feeling is it has not been signed maybe becauseNUS management has refused to sign it.” A JV partnership could constitute a“Material Change” in the affairs of the company and a “Material Change” wouldhave to be reported see
https://www.getsmarteraboutmoney.ca/tools_and_calculators/glossary/definition/Pages/material-change.aspx
This is why I said the deal stinks and maybe NUS “hasrefused to sign it” although this is pure speculation. My next comment, “If Iwas a major JV potential partner what percentage would I receive for asignificant amount of money? 20%? 30%? Based upon the PNG deal I would want awhole lot more for a real investment.” Seems like a logical comment to me basedupon the PNG making 1 or 2 approx. $25 million dollar payments in the 3
rdand 4
th years from profits after production has been established to conclude their payments for30%. It would seem that the real out of pocket investment by the PNG governmentwould equal approx. $50 to $60 million. Maybe that’s the trade off for the mining leases/environmental approvals.My next comment, “An announcement relating to the PNG situation has to be madesoon even if it is wishy washy to provide disclosure toshareholders/regulators.” The January 16, 2011 announcement by NUS gave the PNGgovernment 30 days. Directors have a duty to keep the shareholders advised likethey did today. I welcome all replies to this post as maybe I am assuming toomuch or am completely out to lunch. Sorry for running on but posts/accusationsof drug use is as I am sure we would all agreed immature and I thought I should reply.