GREY:DULMF - Post by User
Post by
materialsgirlon Jul 04, 2014 8:26am
281 Views
Post# 22715558
Buyout price would be circa $400m
Buyout price would be circa $400mAt a takeout price of $1 a share the equity cost would be $150m. Anto is asking for about $230m to compensate then for sunk costs and loans. Add in transaction costs etc and the final price would be about $400m for 100% ownership of the property.
This may seem cheap except that the presidents of prospective buyers are all paid based on quarterly and annual earnings. An asset with permitting delay risks where the likely production is in the next decade does nothing to enhance bonus payouts for management of prospective acquisitors.
Teck is mentioned as a possible suitor. I doubt it now because copper is performing just ok while its biggest commodity, coal, is experiencing very low prices. Oil will just consume capital for the next 3 years with zero returns until then. Only the zinc outlook is very positive.
Of course if the price of DM is low enough there could be many takers. $300m? $250m? $200m?
One quandary is that Anto only owns 40% of the asset but for now they may be looking for 60%+ of the selling price. They will try to recover their sunk costs.
Anto has access to and knows all the details of the feasibility study. So why did they act now?
On balance I have no opinion of what is likely to happen but the news is somewhat negative.
mat