RE:RE:RE:Big guyszibo wrote: Galena is part of Trafigura Group who holds all the paper on MWE, Galena was forced into backing MWE or else their whole investment would have gone south, I don't know how this will play out, I am guessing they're banking on the new mine being viable, but with copper where it is, this is dicey. Interesting to watch from the sidelines. Super pumper has left the building now that his job here is done.
So in other words Galena are prepared to take a massive $ 20 million hit just so maybe Trafigura can get it's $ 50 Million back ! Just how stupid do you think these people are ? How about maybe Trafigura already has an offtake agreement and will be well paid under that contract but can't , by virtue of it's internal controls, take on anymore debt but glady refered this cash cow to it's partner Galena who is providing a bridge loan and an equity injection to get the mine up and running. Galena obviously believe there will be plenty of cash flow to pay off Trafiguras $ 50 Mill and their own $ 15 Mill of debt, which is subordinate, and they must also believe there will be plenty of excess profits to pay off the $ 5 Mill they put in as equity. As you must know there are only 2 ways that Galena can get that last $ 5 mill back, one is to sell their 40 million shares at .12 or better either in the market or via a takeover, or the other is to collect it by way of dividends. If they intend to recoup that money via a takeover then we all benefit and if they intend to collect it via dividends then we will be the beneficiaries of those too. For Galena, who currently own 20% of the Co., to collect it's $ 5 mill via dividends would mean the Co. would have to pay out a totall of $ 25 Million in dividends over the life of the mine or about .12 a share or .02 per year for 6 years.
Thats an annual yield of 80% based on todays share price. Try to find that in a bank stock !
Galena have worked the numbers and have factored in just about every scenario possible short of nationalization and they still come aweigh with big numbers. By my estimate you can chop the revenue model in half and still pay off all the debt plus interest and still have millions left over to pay dividends and run an agressive exploration program too. Oh and we haven't even discussed the fact that the DRC is home to some of the highest grade CU deposits in the world and MWE have only found two of them so far. Let's get the mine up and running and then start a new exploration program and we'll see how long this stock continues to trade at .025 !
Crazy !