Duluth Metals Ltd DULMF

RE:RE:Why DM should be looking real good to Anto!

[rationalinvest]

Hi Yoda.. my take would be that Anto is already contributing a disproportional 65% of the costs of Twin Metals... it is still pre-prefeas, so I think they don't feel like also putting in even more through Duluth, that has to come up with the other 35%. In the greater scheme of Anto things, a pre-emptive investment is not even a drop in the ocean.

Also, more importantly, if Duluth can't or is not willing to come up with its share of funding, the 60% Duluth share will be diluted in Anto's favor. And if Anto would like to buy out Duluth at some point.. what is more beneficial than a low share price?

So Anto is not reluctant at all to invest in TMM, which is what DM is all about.. it's just a holding company.

The only thing that looks 'wrong' to me with DM at this point is the share price.. nothing specific happened in the past year to account for the drop. I'm not saying management has not made mistakes (they have, but fortunately they are finally minimizing burn other than Twin Metals contributions), but there hasn't been any adversity on a Twin Metals project level. The market seems simply more interested in getting high on med marihuana an biotech at this point.. soit.

The share price is mostly important is the sense that we simply know that more equity will still need to be raised from here up to and including BFS.. so a lower share price feeds on itself, and a higher share price will also feed on itself. The latter simply leads to a higher 'ultimate value per share' through less dilution.

On the plus side, now one can buy more of the good stuff at a discount in the mining supermarket. It's simply amazing to be able to buy a share in one of the world's largest underground mining developments with a huge commitment of one of the top notch copper miners. I mean, just the 35 million oz total precious metals (M&I&I) alone of which 5 million oz gold are mind-blowing.

A lot of other resource companies are also smacked to earth so DM is not the only bargain out here. But to see what some of these other companies have (no PEA yet, a few million oz here and there, etc.) trading in the tens to hundreds of millions of $ market cap.. compared to DM nearing $ 100 million EV... 

Not even to mention the $200MM+ has already been put in the TMM project by Anto & DM.

Just a few more months before the most important milestone since the Anto deal of Jan 2010.. we will know what our 60% of TMM is worth. Anto is has an option to pay the 10% post tax NPV for 25% of the project... they know that this project is so large, it will just keep on going for decades and decades (when cash flow discounted at 10% comes pretty much for free), so no problem to pay one times 10% post tax NPV.. Even with a lowball $ 1bn post-tax 10%NPV our share amounts to $4-$5 per share.. I think NPV will come in much higher. No certainties of course, but at this price the risk/reward is perfect.

If you don't mind going against the grain I think now it's a good time to buy.. the painful buy is usually the best buy. If you're more conservative, you can wait for the PFS.. but I would be surprised if DM would still be trading around here at that time.

GLTA