RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:FINALLY!!!! Mk wrote:
One difference is that while Teck finances everything, a potential buyer (e.g. Newmont) could invest their money and generate a nice profit elsewhere.
You are making a false statement here again MK. Teck is NOT financing everything. Under the JV agreement Teck is responsible for ARRANGING the financing for the capex expenditure. ALL parties are still liable to meet their obligations for this financing. So what difference is there if another partner comes along and decides they will arrange their own financing or allows Teck to do it for them? There is no difference whatsoever except for the rates and terms that a third party can arrange for themselves. The JV partner is still liable to pay off the full amount plus interest and it will sit as a liablility on their balance sheet until it is fully paid.
Whether that JV partner chooses to use their own cash or get financing to do it makes no difference. If they chose to finance their obligation thru Teck or someone else it still sits as a liablity on their balance sheet. If they chose to use their own cash to do it, it will subtract from their balance sheet as an asset and negatively reduce their shareholder equity and cash flow. Either way, because SC will not be producing positive cash flow for a number of years this will most likely negatively impact the JV partner's share price or credit rating depending on how well this JV partner is capitalized. There is no free lunch for a potential JV partner if they acquire an interest in SC under this JV agreement Teck has with Cuu. NO free lunch = no advantage, so why would a Major pay up more to acquire Cuu's interest in SC under this JV agreement?