how might the Tunnel dispute affect TUD pricing long term?The BC Ministry of Energy, Mines, and Low Carbon Innovation has said it prefers SEA and TUD work out the matter themselves. That seems unlikely to happen because there's not enough pressure on the two parties.
The ministry must consider TUD's interests in evaluating an application by SEA for a tunnel, even if TUD stops exploration expenditures and doesn't apply for a mining license, if SEA comes back with another application for a tunnel.
Who can outlast who? SEA, or TUD? Both currently have access to enough capital for this deadlock to endure a while.
SEA has a market cap ~ 6x that of TUD and could in theory effect a merger of all parties, but:
- Would TUD and the other two companies all sell to SEA?
- I doubt SEA would offer enough money.
The Treaty Creek and KSM projects probably have similar total AuEQ. KSM has about 1/2 the grade of Treaty Creek, and hence will have inferior economics (IRR, return on capital, etc.)
A third party (like Newmont, if looking to invest...) might prefer Treaty Creek (rather than KSM) because of its better grade.
I doubt Newmont (or another other biggie) would want to buy all the parties before there is a PEA or an FS for Treaty Creek.
It's been speculated that SEA is posturing and maybe neglecting legal reality in its news releases.
- Is this to delude naive retail market participants so they won't sell off shares?
- If it's the CEO's hubris, how many years until he's gone?
SEA could spin off KSM, retain some ownership, and let the SpinCo pursue a merger or deal with TUD. But if the CEO's got hubris he may not be open to it.
TUD has no other projects, and access to funding, so it is in no hurry to sell or merge or complete a MRE or apply for a mining license.
Summation:
I don't see the market giving TUD or Treaty Creek its full value until the tunnel dispute is resolved, or until TUD completes at least a PEA. (Anybody know when TUD is likely to complete a PEA?)
For me:
I'm thinking its time to sell TUD and buy something with a better-constrained timeframe for known catalysts to push prices upward (like more Artemis or I-80 Gold).
Thoughts?