Weekend ThoughtsI don’t think Teck wants to purchase CUU in order to have100% of the project. Rather, I think there is good probability that they will want to partner with some other major firm (miner or financier) while maintaining majority control. Teck will earn back their 75% at a bargain price and maybe sell off some of that percentage (at a handsome profit) to a partner with deep pockets.
Where does this scenario leave Copper Fox? With Teck arranging the financing, Copper Fox could sit back and pay back their 25% of financing from future income of the project. Alternatively, some firm could purchase that opportunity. Presumably that firm would be someone of Teck’s liking (probably the major firm that Teck prefers). Even if Teck chooses to keep 75%, they would likely want to be involved with the choice of their eventual partner. Therefore, I think any takeover of Copper Fox will be mutually arranged by Teck and Copper Fox.
I would like to point out that irrespective of Copper Fox staying in or being bought out, the 25% Copper Fox interest requires 25% financing. That 25% is either paid upfront by a new purchaser or in the future as per the agreement. When the payment of capital is made affects the present value – up front financing has a quicker cash inflow while future financing delays the inflow. People should recognize this when talking about Copper Fox’s value.