Freeport's Tenke Expansion Likely Put on HoldIn a Reuters article on March 7, 2014, Freeport announced that its Tenke Fungurume Mining Project in Katango (Congo) was having its power rationed along with other miners in the region. Poor energy infrastructure and deficits going forward are likely to put expansion plans on hold according to the Freeport spokesperson. Energy infrastructure and other problems in Africa coupled with the export ban and duty tax issues in Indonesia bode extremely well for the development of an additional producing Freeport copper mine in the heart of Europe, in a 100 year old mining district in a country that wants mining development. Freeport's share price on Friday dropped nearly 5% on the Congo expansion hold news, on twice the average daily volume. A one day, 5% drop is a huge hit for Freeport. It has to do something soon to appease those institutional shareholders who hold the stock for its stable and predictable copper production cash flow for the next decade. Whether Freeport acts sooner or later in acquiring RMC's Serbian interests, the Tenke news inures to the benefit of RMC and its shareholders.
As I said in an earlier post and in light of the facts RMC since has cashed up with two strong instittutional shareholders and is preparing to drill on its 100% owned property, if Freeport buys out RMC this year, it will be in the $15-20 per share range. The resource estimate for the Cukaru Peki High Grade Zone is worth about $10 a share (Scotiabank) and the Cukaru Peki porphyry and other discovery prospects on the 100% owned properties, in their currently undefined stages, are worth an additional $10 a share IMO.