RE:RE:RE:RE:JV economicsDC, the PP was done as I mentioned due to an issue with the mine, and CoVid looming, and this bunch does not like to leave much to chance. I have no doubt that if they do a JV, there will be some kind of perk or discount, that is a given, but I do not see that as valueing Florence at $3 a pound, not even close, and with CU north of 3.70 and most indicators pointing to much higher, there is no pressing need to JV the project, it would be done to derisk, bring in a partner, raise cash to complete Florence AND other projects, and current CU values.
Some get confused with this as dilution, which the PP was, and always is, but a JV is selling the profit, for equal or close to equal value, the JV partner then shares in the expenses at their precentage rate, and the risks as well. A bond does not dilute, just adds an expense line at 7%+ per year, but the other options are not as good. A bank loan might have been at a better rate, but in the US they charge those cute things they call "points", put it on the expense side of the ledger, so a bank loan would not likely be any better.
KW
dcjones4396 wrote: KentWilkens wrote: Good questions Golden, but not new math, just simple math. NPV means 'net present value', what the asset is worth as mine build and all costs, what it will put into the bank for the company, based on various parameters.
The current NPV of Taseko, with $3 copper, is north of 5B. That as we all know, and mentioned in the interview is not reflected in the market cap of the company, at all. The market cap represents Gibraltar, at partial value, zero for florence. When they sold 25% of gibraltar for 240m canadian, the market cap at the time was 400m. People did the math, and the share price began to reflect that.
I will expect that when a JV is reached, it will be at a discount to the current copper price (but not $3), and maybe even a discount to the NPV, but far north of 92M US for 10%.
2024golden wrote: So let me get this right...the best way to increase share price is through jv dilution of the lowest cost producing asset they will ever have???...even when we already have all the cash needed to build out with zero jv dilution??
This must be NEW math huh!!
Hey Kent, today's share price action is indeed interesting as they are trading much higher than their peers by quite a bit percentage wise. Makes one wonder what the actual cause is behind the pop. It certainly isn't due to the YouTube video recently released. That said, it is more than likely because the big traders are finally starting to give value to Florence in the share price. I wish I had the same positive view you have in regards to what management will ultimately get for the JV at Florence. Unfortunately, I still believe they aren't going to get near fair value in the deal. Your numbers of 92M for 10% are fair but when you move that to a 25% "give", that comes out to roughly 225M. I believe they will JV for 25% but I highly doubt they get 225M for the transaction, simply based on their past and recent dealings. Hopefully management surprises us all with a truly fair deal but I'm not holding my breath. Still hard for me to complain as my share holdings eclipsed the $500k US value but this crew continually keeps us guessing, with a side of agita.