RE:good discussions here today
TraderDad wrote: For me, at the end of the day, if the drills keep producing ridiculously high grade uranium assays and the SP keeps inching up ... I have no reason to complain about management granting themselves more options. I'm up nearly 4-fold, so I'm ecstatic about Nexgen.
Managment is not giving themselves more options. Per the proposed amendment, Article 2.2(b), the number of shares issuable to insiders still can not exceed 10%. Insiders are also limited to 10% of issued and outstanding shares per the TSX participation rules.
The purpose of the proposed amendment is clearly outlined in Article 2.1:
When, how much, and to whom do we sell Arrow.... if at all? Cameco, is one company that can not afford to lose Arrow. Cameco's share of unmined reserves and resources at McArthur River (240Mlbs) and Cigar Lake (110Mlbs) total 350Mlbs of U3O8. Arrow easily has at least that much, and the ore will be much easier to mine.
While Cameco could potentially face competition from Rio, BHP or a foreign utility in a bidding war for Arrow... another threat to Cameco is NexGen deciding to take Arrow to production themselves. If NexGen plans to take Arrow to production, they'll need to attract a whole lot of talent. Dangling the options carrot is one very effective way to do that.
Cameco recently laid off a bunch of employees after putting Rabbit Lake on care and maintenance. I'm sure others within the company are a bit concerned about job security. With this proposed amendment, NexGen could end up poaching key talent from Cameco.
Bidding war or no, Cameco will have to table a fair offer and soon... or Leigh will make good on his plans to take Arrow to production.
"We still have one more company to pass" - Leigh at the Subscriber Investment Summit.