RE:RE:RE:RE:Freeport to spend $25 million on Timok Exploration for 2014There are several milestones imposed by Serbian law prior to delivery of a BFS which require fairly extensive drilling by FCX along the way. I suspect the parties' inability to reach agreement on a Joint Venture Shareholder Agreement is rooted in FCX's desire to get away from the requirements of the March, 2010 Earn-In Agreement between RMC and FCX, the terms of which must apparently be favorable to RMC. Since an Earn-In Agreement typically controls the terms and conditions of the subsequent JV Agreement, it sounds like RMC management is refusing to be bullied by FCX in this regard. FCX is used to getting its way with a small cap explorer--- hence the current standoff. Fortunately, the recent series of brilliant moves by RMC management has significantly limited and/or eliminated the several avenues which had been available to FCX to try to screw RMC. The current impasse may also be attributable at least in part, as one poster has stated, to FCX wanting to finalize a long term deal with the Serbian government before publicly committing to building a mine.
I remain convinced that Freeport will not let its relationship with RMC get to the point where RMC has drilled its 100% owned property and is waiting for drill assays. Freeport has too much to lose if RMC makes another discovery. Either way, we as RMC shareholders are going to be rewarded exceptionally well again this year. I also believe that Jing Bao could very well make a friendly bid for RMC's interest in the Timok JV only and keep a life-of-mine 25% ownership interest, the funding of which would occur through its specialty, an off-take agreement. RMC shareholders would be well-served in this regard as well, by being fairly compensated for the Timok JV and keeping the lottery tickets on RMC's 100% owned properties.
The financing which closed last week is very telling. RMC did not and does not need the money. The entities who participated in the minimally-dilutive financing include a well-known institutional money manager, Jing Bao (now a 10% owner) and a Chinese smelter. Between the three of them, they now control close to 20% of RMC stock. They are all looking for triple digit gains on their investment, one way or another. They all know that at least one world class mine is going to be constructed at Timok and they want to get in early (for them).