GREY:DULMF - Post by User
Comment by
mtsuiton Jul 04, 2014 9:14am
201 Views
Post# 22715654
RE:Buyout price would be circa $400m
RE:Buyout price would be circa $400mFM share price is up since it agreed ot pay $470mm for Lumina. It has a smaller resource just at PEA stage and it's in Argentina. In most respects DM seems more attractive.
The key risks for TMM are 1) permitting and 2) economics and complexity of an enormous underground mine. It's easy to move 80000 tonnes per day in a spreadsheet, but hard to do it underground.
ANTO may be playing a clever game. The existing agreement has a fixed formula for calculating the price of the next 25%. ANTO knows the PFS data and may be interested, but at a lower price. So ANTO has effectively told Duluth to go auction itself. ANTO may bid and may be the highest bidder and may even be the only bidder. ANTO might end up buying all of DM (60% of the project) for $100mm instead of paying $200mm for 25% of the project. It seems strange that ANTO pushed this project so aggressively with spending way past the orginal budget and then walked away from the 25% option. But perhaps ANTO knew that aggressive spending would leave the junior partner (DM) in financial distress and vulnerable to a bargain buyout. It was as if Dundas was at the bar trying to match Andre the Giant beer for beer.