RE:RE:RE:RE:RE:New Haywood CommentsIt is really fun to speculate on this as I can say without a doubt that in all my years of investing in this space I have never seen a deal like this one.
Has anyone spoken to Chris or Simon? Usually they get back to me quickly but this time around they appear to be MIA. Probably a good sign that they don't feel the need to be promotional and hopefully they have better people to speak with.
One question I would have is how they are defining the HS versus porphyry zones. There is a transitional zone between them that grades typically just over 1% cu eq. that would be really hard to lay out in a contract such as this. It really doesn't matter much but I do find it interesting and would love to see how the actual Lundin offer is spelt out.
More to the point it would appear that Dundee was trying to lock the stock in around the $6.20 region today using a 50k bid and an iceberg sell around $6.24-26. This would seem to indicate an equity financing in the works. I think for me this would be the least appealing course of action at this point in time. I guess raising cash might get Lundin to make a move if they are as keen on the deal as they have said publicly.
So if we went the equity raise route, I think it would be of the utmost importance that it is not done on a bought deal basis and that we have an out (some sort of right of recision) which would put us in a perfect position against any parties that might covet the project.
I don't really see debt as an option. Traditional lines of money wont touch this as they don't have the people in place to give it the stamp of approval without a BFS. Even a whiteknight from China or whatever would be unlikely given that we don't have the inhouse personel to build a mine.
Most likely still has to be a bid from RIO Tinto. This deal in my mind anyway is beyond perfect for them and their healthy balance sheet. The question I have is how soon would they have to act in order to ensure RMC exercises it's ROFO. I'm thinking they would have to have taken over the company prior to the 60 days being expired. Or, could they do a friendly deal, (lock up the Insiders Shares and include an extemely punitive break up fee) and then loan RMC the money to match the Lundin deal?
It's all extremely complex but the best part is that if no deal is done over the remaining 49 or whatever days left, I think we're left sitting on a 200-400% return over the next 2-4years. I don't know a lot of investments offering up a double as downside. What did Rick Rule say? Something like "they win or they win"?
It's going to be fun watching this pay out in the days to come.
GLTA,
Buck