Takeover Target
According to past Bloomberg article, the scarcity of new copper deposits, falling grades at mines in Chile, the U.S., Australia and Indonesia, and runaway costs to develop projects combine to make it more attractive to buy a rival than build a new mine. Barriers to entry in Chile are very high because as practically all properties or claims are tightly controlled by local families and the Chilean Govt. making a deal extremely difficult...Copper aka the Red Metal is in a mini-bull market with major copper stocks such as First Quantum (FM) and Lundin Mining (LUN) at new 52-week highs. In late 2014 LUN bought out Freeport's 80% interest in the Candelaria Copper project in Chile for US$1.8 billion, and also in late 2013 LUN bought out Rio Tinto's Eagle nickel/Copper mine in Michigan for over US$300 million. I bought Tenke Mining (renamed Lundin Mining) about 16 years ago for $1/share and it peaked at $27...I predict that Coro Mining will be taken out within 6 months at a valuation of up to $250 million or around $0.50/share. Greenstone Capital and institutional investors now controlled 70% of the float and management another 7%. Greenstone will have all their 300 million shares out of lock-up within 4 months. We know that private equity capital firms will at some point in time cash out for big bucks to earn those investors who put up the venture or speculative capital. Greenstone is domiciled in the Channel Islands and is exempted from capital tax. These guys could walk away with more than $100 million in pure profits if they pull the rip cord and take an offer at $0.50/share or more. With 70% stake acquired in a friendly deal, a prospective buyer can do a compulsory "squeeze-out" for 100% of the Company. Management has 7% ownership, and there are no anti-takeover defenses available such as "Poison Pills" or rights offerings (courts have recently said no to rights offerings to thwart takeover) since they had previously agreed to the imposition of an "anti-dilution" clause with Greenstone. Believe me, these ex-JP Morgan & Xstrata guys from Greenstone know a thing or two about M & A. Some people have an irrational mindsets about giving up their stocks.