RE:RE:RE:RE:RE:RE:RE:RE:RE:I'm no expert- CCY has obtained 100% of La Verde
- CCY is issuing shares to Teck which results in Teck owning 19.9% of CCY. CCY already has approximately 279,000,000 shares out (not considering fully diluted amount for simplicity). An additional 69,400,000 shares bringing the total to 348,400,000 would make the new shares for Teck to ~equal 19.9%. The current value of these shares is 69,400,000 x .015 = $1,041,000.
- Teck can take part in private placements. Their involvement is limited to their percent of ownership. So currently they can buy up 19.9% of a private placement.
- If a part of La Verde (or all) is sold to another party, Teck receives 20% of the proceeds if the sale takes place within the first 12 months, 10% if in the later 12 months (two year time period). With a current market cap of 4,180,000, I will assume a major partner will want to be in control, so taking 60% of 4,180,000 x 20% proceeds (assuming sale within next 12 months) = 501,600.
- Teck receives 0.5% royalty related to property, CCY can buy this out for $10 million at any time.
- If La Verde goes to production, CCY pays $10 million to Teck. If there is a change of control of CCY (one party owning 50% or more of the outstanding shares of CCY). 50% of this 10,000,000 needs to be paid immediately.
- CCY needs to pay back the Teck subsidiary for La Verde related expenses. This will be done through a private placement or other financing. The financing/private placement needs to be at least for 1.2 million. I would assume this is the approximate amount for the expenses. This requirement does not appear to be immediate, however CCY clearly will need mone in the bank.
The April 9, 2013 agreement stated that CCY needed to pay Teck 20,000,000 cash, or 25,000,000 equivalent consisting of shares (no more than 19.9% of outstanding shares) and cash with a minimum being 12,500,000. As I showed above, 19.9% ownership with a new share issuance has a value of 1,041,000. With 12,500,00 cash (which CCY doesn't have) and shares of a value of 1,041,000, CCY could not reach the required 25,000,000.
So what exactly did CCY give (with 0.015 current share price)?
$1,041,000 worth of shares (.015 price per share)
$10,000,000 estimated value of a .5% royalty
$10,000,000 upon reaching a production decision
$501,600 - 20% or 10% of proceeds from sale of all or a portion of La Verde.
---------------
$21,542,600
Now if the current share price was $0.06 (roughly the value in April before original agreement was presented). The cost is as follows:
$4,164,000 (1,041,000 x 4) worth of shares (.06 price per share)
$10,000,000 estimated value of a .5% royalty
$10,000,000 upon reaching a production decision
$2,006,400 (4 x $501,600) - 20% or 10% of proceeds from sale of all or a portion of La Verde.
---------------
$26,170,400
So overall not a bad deal for both parties.