RE:RE:My take on the latest Crux interviewHi Sooner, true, you can have multiple folk read the same article or listen to the same interview and they can walk away each hearing something different. This was a very informative interview, BUT, I feel that Paul may have done a disservice by not expliciting stating that his figures were being based off the headline NPV. It is a fairly safe bet to assume that is what he was referring to, yet, he goes on to discuss the what-if scenario of higher/current metal prices to drive the point home that there are multiple NPV possibilities in play.
Paul should've laid out possibilities based upon NPV instead of just focusing on the lowest number. I don't mind he was focusing on the lowest number, just tell us so and then work with the what-if scenario. This runs the risk of having RIO use this verbal misstep during negotiations: "Well, your CEO stated he even knew we weren't going to pay $2 billion.....yadda-yadda-yadda......"
Let's look into the crystal ball here a year from now and assume we do have $2,500 gold and $5 copper. Would Paul argue that we should use a ridiculously lowball $2.3 billion NPV? We know that the truth actually lies somewhere in the middle (as it always does) between the $2 and $7 billion or the $4.5 billion Paul mentioned on the more realistic scenario.
The properly valued package of Casino has to be hashed out and that depends heavily on the metals prices. But, since I have already read between the lines and determined that Paul also believes we are looking at a 50% of NPV buyout figure, it gives me confidence that we will be looking at my $10+ figure.
Hate to say it, but if we are only going to get $6 a share in a buyout, there are so, so many better juniors out there than WRN. SPA is one, it was already triple its current price last year before they published their updated PEA, so there is a triple already baked in before any extra boosts from future gold prices or buyout rumours.
So, the question is: Can both parties make $$ on a 50 cents on-the-dollar type buyout? The answer is yet. Can both parties agree upon what NPV figuure to use to value Caisno? They of course will, we just don't know what that final figure is. If we did, it would be a piece of cake to calcluate our eventual per share buyout value. The two things in play are the metal prices over the next 12 months and how well the BOD can negotiate. Since the door is being left open for other suitors, we are not in any rush to accept the first lowball offer being thrown at us. This will have to be negotiated, but (despite Paul's verbal misstep) I believe the BOD will perform this job properly. BTW, Paul is not on the BOD, thankfully!!