RE:RE:RE:RE:RE:Rob McEwen Interview today Tikinagan wrote
Was this the only alternative to issuing shares? Did no other companies, especially copper producers, emerge as potential partners? The market has been underwhelmed by this move so far, and only the vaguest of suggestions have been made as to how this enriches most MUX shareholders. I want to see some frank conversation and hard questions asked, and will be listening carefully at the meeting next thursday.
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Apparently they could not make a deal at good terms with any other major copper producers or i am sure they would have.
The copper project is a $5 billion dollar project which is way to big for a company like MUX to develop on its own. From what it looks like to me McEwen is splitting off the copper project and selling shares to raise the $80 million US which he will use to speed up preliminary development of the copper mine. Then as that is done he is hoping for a major to come along and invest to develop the project. To buy in their share of the project a major would hopefully pay a large amount to the copper spinoff company which would be used to develop their share of the copper project. The spinoff company would then own 15 or 20% of the copper project and MUX shareholders who own 68% of the spinoff would own that percentage of the spinoffs copper project.
Is it the best way to finance the copper project development? Its either that or issuing a boatload of shares at low prices or taking on debt if they can find anyone to lend them money. The fact that McEwen is willing to invest $40 million US of his own money in this deal leads me to believe that he has confidence in the copper project and may have something up his sleeve that he is not telling us at this time.
Personally if a major came along and made an offer of lets say 3 or 4 hundred million dollars for the whole copper property if i were the copper spinoff company i would take the cash 68% of which would go to MUX which they could then use to develop their own gold projects while letting a major spend years and several billion dollars to develop the copper project on their own.