2 realitiesOne reality is the pp was a terrible blow to sh. It was nothing but a lowball sellout. The cost
was larcenous in terms of their equity.
The other reality is at the time did it make sense and what were the alternatives given the
time constraints to guarantee the surety bond. I wonder if they knew what copper would go
for today, would they have done it. I doubt it and who would have but hindsight gives us perfect
vision. Mgmt isn't in the guessing game and need to make decisions based upon current
realities.
Some wish they had waited as Gib could have carried them on its back to a higher evaluation which then would allowed them more options. The problem there was they would have had to
pass up on the opportunity to secure the surety bond which allowed the EPA to issue their water
permit. TKO was in a bind and had a bad 3rd Q as well. Mgmt knew that so options were
limited. Thats my understanding even though it was a terrible price to pay for their water permit,
they felt they had no choice.
I think in retrospect, if mgmt had come clean with their explanation at the time, in the full spirit
of transparency, holders may have been more accepting. Doesn't really matter now because
the deed is done and people like fish used it as an opportunity. Others probably would never
have accepted it and said to H ell with the water permit. The cost is too high.
The last chapter is where does the company go from here. That really will define whether it
was worth it or not. As a long time holder, I'm hoping in the end it will have been worth it
and I will make a ton of money on TKO in a copper market that gets extended for many years.
MS