RE:RE:Pentwater answer to RIOAlthough queering the current bid may extend early resolution, we have the approaching unarguable cashflow from Lift One coming, and the fact of the matter is OT has had methodically suppressed valuation for two decades, mostly to hold the reins on Mongolian overenthusiasm.
The upside potential of higher metals prices, other major miners desperate for tier one copper assets, incredible expansion optionality, exploration potential for even higher NSR ore bodies, the massive reserves, the buildout and most engineering and financing challenge mileposts past ...
Not so fast Rio Tinto.
Did somebody drop the ball on the free-trading paper? They let Pentwater scoop another few points when they have a proxy battle extraordinaire coming? I have a ton of respect for the mining and engineering folks at Rio Tinto but their corporate strategy and senior management ... you gotta wonder what planet they live on. They could easily lose this deal by lack of a few percentage points of votes from the minority.
Now let's wait and see what the big proxy advisors come out and say.
ETG is so deeply undervalued - if I was a TRQ holder I might be switching horses to the higher risk/reward proposition at ETG. And no question the structural risks around no IA treatment secured from Mongolia yet is a big deal, but even a haircut on a 3x or 4x lift is probably more than can be hoped for from TRQ from here in the best of circumstances. AND ... sorry for the pumping drumbeat of my repetition, ETG's leverage to the optionality of advancing Heruga and Lift 2 HNE, to expansion of the stated resources, and to new ore bodies on the JV ... is far superior per share and the cost ... well, for 20% deep, 30% shallow, ETG has a paltry market cap of $170 million US (this close to significant cash flow that is extraordinary!), whereas TRQ ... for 53% deep, 46% shallow (we have to back out Mongolia's 1/3) where are we at today ... $6.3 billion USD? So my math says ETG's leverage to new JV resources is 18x that of TRQ. And I am convinced HNE should double when the sham of it being truncated at 725mN of the JV line is reconciled by "discovery" of a modest displacement and a doubling at least of the strike length. Highest ore value at OT, narrowest ore body, lowest hanging fruit.
Good luck all.
cg