RE:RE:Shotgun MarriageEVH,
There are good and bad points to this partnership.
1) The Company needed money now. That's why the interim $100 million loan. I would have preferred this occurred after positive news on mining laws.This really should have been for $5 or $6. $2.75 was always ludicrous.This isn't a criticism of management. They did the best they could under difficult circumstances.
2) The priorities of Chinese State miners may not be the same as investors. We want to maximize profits. They may consider access to the raw commodity more important. They may even be prepared to see the Congolese and South Africa governments skim the bulk of profits, leaving little for investors. They are State owned, so their priorities could be different. This wouldn't do wonders for our long term share price. We were looking at a 2.5% royalty and 30% corporate tax just six months ago. Now the picture has drastically changed. Over the next few months we'll find out by how much. Confidential negotiations are still ongoing. They may bear fruit or not. We don't just need high grade mines. We also need to earn high profits to justify all the share dilution.Today's news tells us CITIC wants access to our metals to fuel Chinese growth. But that doesn't mean we'll make lots of money.They could even sit on assets for years. We'll find out soon enough.
3) Today's financing wasn't for construction. It was to advance projects, general and corporate expenses. Further on, CITIC agrees to seek financing at a later date, presumably debt, for first stage construction at Kamoa-Kakula. So, the money is to be used for drilling, studies, exploration. Perhaps Kipushi? Hard to know.
All in all, this was bittersweet. I like that $3.68 sets an objective value. Yet, there are now many strategic partners, some of whom may not share the objectives of most investors. Maybe not. We'll see. The share price was up modestly on news. The wider market has taken a wait and see attitude. I hope your optimism is thoroughly justified.