GREY:STTYF - Post by User
Comment by
jsbarnbyon Aug 13, 2013 10:54pm
282 Views
Post# 21668304
RE:RE:RE:Dnever H reply
RE:RE:RE:Dnever H reply The way I see this playing out is:
Donner is unable to make cap ex cash calls. Sandstorm sisters pay all outstanding cash calls and assume 35% interest in the stream. In order to do this Sandstorm Metals and Energy will need to raise money. I think it will be by dilution (yes, even at these levels). Management will put a positive spin on it because they are acquiring the stream. SND will need around $9M and SSL will kick in ~ $2M (same proportion as the original investment). Glencore Xtrata has the option (which I am 99% sure they will excercise) to purchase the stream for $49M. This money will be split between the sisters at the same percentage as the investment. Effectively SND will turn $9M of additional financing into almost $40 and will have three streams - Colossus, Canadian Zinc and Entree (none of which start until 2015). SND will break even on the Donner experience and will be cashed up. Now the hard part is...what is the value of a company that has $40M+ (with assets from failed streams) in a cash starved market with no streams coming on until 2015?
Elmo?