RE:RE:RE:RE:RE:Merger circularTiny, there is a time limit, on certain exploration expenses... it's all in the financial notes to the 2016 Annual Report. The carry-forwards for MPVD start to expire in 2026. For KDI, they expire later. But my intent is to point out that MPVD will exhaust all its tax-loss carryforwards by 2020 at its current rate of income generation. (what a thought! Income!)
And yes, it's likely that some amount of current income will be expensed as exploration of the KDI property, if the deal goes through, just as any expenses in running the GK operation (or exploring it, as a partner of deBeers) get expensed against income.
Here's the nut of the argument: Kelvin & Faraday are already proved out as not unreasonable ore sources, but not juicy enough to warrant the expense of a freestanding mill, certainly not at current world rough prices. If deBeers owns 100% of KDI (buyout scenario), MPVD is screwed. If MPVD owns 100% of KDI, deBeers chooses either (a) not to play, in which case, they have a mill and no ore in 2030 or (b) negotiation with MPVD to exploit KDI / Kelvin / Faraday / whatever-else-is-found, and at terms more satisfactory to MPVD than "junior partner, 49%". Consider: with each sale, MPVD's financial position improves, and MPVD can better stand to extract sweeter terms from deBeers on any split. Hence the "timing is right" pitch from Whittle. I recall that PE whined that the original deal done with deBeers was done from a position of weakness, and he swore never to do that again.
So let's not beat each other up on writing style; I'm me, you're you. I'd rather we buy each other rounds in Vegas in the near future. Black Russians, anyone? GLTA.