RE: Company should spin-out non- Schaft Creek propRX4H1N1 wrote:
Company should spin-out non- Schaft Creek properties into another tradedcompany.................now that would add significant and immediatevalue. These would be those not bound to any back-in rights held byTeck.
Imagine another baby CUU starting out fresh once again. Now wouldn't that be a super exit strategy for CUU management.
I've had a different idea. I've wondered whether Copper Fox might approach Teck and propose that they mutually re-write the 2002 Option agreement. Under the present agreement, the Schaft North properties fall within an "Area of Mutual Interest" such that Teck has a right of first refusal to any JV -- but the price will be separate from the back in formulas which govern the Schaft Creek deposit itself. As the 2011-03-31 news release said:
These mineral claims are located within the Area of Interest(essentially an "Area of Mutual Interest") set out in the TeckResources Limited (Teck) option agreement, accordingly participation inthese claims will be offered and included in the joint venture shouldone be negotiated with Teck .
My idea is that CF and Teck should agree to rip up the 2002 agreement, and replace it with a new agreement which would state that:
- Teck is granted the option to back-in to Schaft Creek and to each of CF's subsequent projects, but only at the 50% level, and to do so it would have to reimburse CF for 200% of CF's exploration & development expenses;
- if Teck backs into to Schaft Creek or any other CF project, it will have to arrange and carry all financing for that project and agree to fast track the production of the mine;
- if Teck backs in to any project, the 50% share which it acquires will be defined to comprise all of the base metals in that project (copper, moly & rhenium) whereas CF's 50% share will be deemed to comprise all of the gold and silver in that project.
I feel that a New Deal such as I've outlined above would be a win-win outcome for both Copper Fox and Teck. Teck would achieve a guaranteed right to all of the base metals which now exist or are subsequently found in Schaft Creek or the neighbouring properties -- a huge acquisition for itself, at a modest cost. Copper Fox would also win, because all subsequent development would be underwritten by Teck, which would give comfort to investors, especially since Teck would be bearing all of the risk of the fluctuations in the prices of the base metal commodities, while CF would own all of the gold & silver, which for a junior company would enhance its credibility. In effect, this deal would transform "Copper Fox" into a new "Golden Fox".
Just my humble opinions!