CANDENTE COPPER $1.00 and $321,000,000 MARKET CAP
CANDENTE COPPER $1.00 and $321,000,000 MARKET CAP
This is a good deal for shareholders and Fortescue. After the January 31 meeting, Fortescue will own 23.4% of Candente Copper on a fully diluted basis.
Fortescue accumulated their shares as follows:
Jan21/20 they bought 21,000,000 at 5 cents
May20/20 they bought 27,500,000 at 5 cents
Aug23/21 they bought 4,400,000 at 12.5 cents
Total outstanding shares owned by Fortescue at Dec31/22 is 52,900,000 which cost a total of $2,975,000
On January 31, 2023 they will purchase another 22,222,222 shares at 18 cents which will cost $4,000,000
Effectively on February 1, 2023 Fortescue will have a total of 75,122,222 which cost a total of $6,975,000
Why is this important and why is it good for shareholders?
(*calculations below are simplistic/estimated/rounded)
Fortescue will own 23.4% of Candente Copper on a fully diluted basis (75,122,222 / 321,000,000)
Fortescue has paid a total of $7,000,000 so far for Candente Copper shares.
There are still 246,000,000 shares or 76.6% that are not owned by Fortescue.
To purchase the remaining shares let’s say at $1.00/share, Fortescue would need to pay an additional $246,000,000.
That means if they already invested $7,000,000 and they purchase the rest for $246,000,000 they will have paid a total of $253,000,000.
At this point Candente Copper would be worth $1.00 per share and a valuation of $321,000,000.
So Fortescue can buy Candente Copper for $1.00/share and pay a discount of $68,000,000 ($321,000,000 – $253,000,000) but the stock will be worth $1.00 or $321,000,000 market cap.
Plus Fortescue’s 75,000,000 shares will have a net gain of $65,300,000 which means they effectively bought Candente Copper for $187,700,000 but the stock again will be worth $1.00 or $321,000,000 market cap.
It works for shareholders and for Fortescue.
There is opportunity you just need to see it.