Deal combinations and permutations I wondered out loud previously why IMO I thought the PEA NPV and Revenue were unrealistically conservative. And Mike previously explained unlimited combinations and permutations in any deal potential. Here's a couple I'll throw out there, it's fun to speculate when we've got no news on the table.
A.
The Friedland's have a 100% buyout price, and that price is/was independent of the PEA. PGD explained that the PEA NPV was a base case, conservative, and clearly outlined the potential to expand the Phase 1 PEA, and continue efforts to build a Phase 2. I'm thinking the PEA has no relevance in the determination of a potential buyout price. So, if the price is met, the Friedland's credibility skyrockets, and what people will remember and what will be published in the press is the ratio of the Buyout Price to the PEA NPV. Everyone is happy.
B.
I don't think I've seen this potential scenario before.
PGD is fine with the conservative PEA. They put together a partial cash, partial Gross Over-riding Royalty in a deal for just Chidliak asset (all minerals or just diamonds). The conservative in-situ diamond (and other minerals) value in the PEA works to their advantage in negotiating a higher than normal GOR %. As Phase 1 expands and Phase 2 is developed, the $ value of the GOR has lots of growth potential. The GOR is paid annually to Peregrine Diamond, then PGD uses the funds as dividend payments to shareholders and retains some to fund exploration and development of the spin-out PGE. Kind of like a long term “royalty” and dividend paying stock with high growth potential. Maybe same for DO-27. This sort of deal would take a lot of time and be fairly complex.