RE:RE:RE:RE:RE:RE:RE:RE:Finally Dundas is no longer CEO. Don't forget Teck's Mesaba, haha.
Exploration is clearly on the DM backburner now because of cost control, which I see as a good thing as the exploration dollars don't add to present value. So I don't think there is an influence there, I also myself wouldn't attach any current value to the exploration projects.
There have also been multiple iron mines in the Iron Range. Twin Metals (TMM) is by far the largest copper-nickel-PGM project. Antofagasta is running the TMM show and they only have a stake in TMM, so from that perspective Anto doesn't bother about Polymet or anybody else but focuses on TMM.
Anto has done its due diligence and put a big amount of money ($250 million+) in TMM and DM over the years. Just 2014 year-to-date alone, Anto has put $ 7.1 million in TMM (as per the recent DM Q1 filing). So yes, Anto is still fully committed. If the feasibility is there, Anto will proceed and develop TMM in compliance with government regulations. If the project complies, rest assured it will be permitted and the mine will be build. And the big dollars will start flowing in.
I think Anto is the one of the top, if not the world's best-run and smartest copper producer. Anto's impressive long term stock performance alone shows they know how to build value and not squander shareholder money. The Luksic family owns 65% of Anto and Jean-Paul Luksic is executive chairman. So Anto is pretty much run like a family business and not like the shareholder destruction businesses we have seen elsewhere in the mining world. So Anto endorsing and pursuing TMM since 2010 is a huge validation.
Explaining stock prices to me almost feels like trying to reason whether or not God exists. Generally prices sometimes go much, much higher than you would reasonably expect, and sometimes also much, much lower. All based on human greed and fear. I mean a huge company like GE traded close to $ 60 in 2000, dropped to $ 10 in 2009, and is now back at $ 26. Did profits fluctuate in the same way? Haha, not even close. But in 2000 investors totally got carried away in their dream world and in 2009 they were just totally freaking out.
I myself don't bother too much explaining the market price: I just try focus on what a company is worth and then see what the market asking price is. If this price is absurdly high, I might think of shorting. If the market price is extremely low, I get more excited because going long is way easier and safer than shorting. Well, I got very interested in DM at $ 1.00, got some more excited at $ 0.80, and right now I am as excited as I could get buying a 60% stake in TMM for a lousy $ 70MM market cap.
What happened this year to DM's prospects to explain any movement in price? I would say exactly nothing. Nothing happened we didn't already know about. If anything, intrinsic value grew with less time to first production and cash flow. Only the market is discounting DM's prospects even more than it already did.
Well OK, I thank the market for discounting DM so much that right now I can buy 60% in a company, TMM, that I at this point estimate should be able to generate $ 800 million to $ 1bn in EBITDA in full production, for a $ 90 million EV. To be clear: I could be and possibly am way off, but at this point it doesn't even matter whether it's going to be $ 200 million or $ 2 billion, because the market is discounting so much that there is a big margin of safety.
DM is a $ 90 million EV company with 60% of a multi-billion dollar NPV - at these metal prices. If metals prices rise, NPV will be off the charts. Anto will basically be looking for a long mine life compared to payback period. So they can be sure that with commodity market cycles, they will be there mining this deposit when the market is strong to hit the jackpot. That's all they need. And we all know the amount of ore at TMM is huge and could support decades of operation at the least.
Again: we will now the PFS numbers shortly, but at this price, anything will basically do because the market is pricing DM like there not going to be a mine. I think there will be. And if I'm right, DM shareholders will be hugely rewarded. Only feasibility matters. Financing CAPEX is close to a non-issue with Anto as a deep-pocketed partner.
Right now at this point, DM is more valuable than it has ever been in the past. That is basically just a given for any company with successful exploration and successful development. Every year, more money is 'put into the ground' and the development. To be able to buy all this at these market prices is a true gift. Feels like buying a $1M house for $ 75K!
My 2 cts.