RE:Mongolians dependence on OT
ETG is going to appreciate due to revenue beginning from the JV, and many of us expect, rising metals prices. But Rio has other pressures as well - the need to determine the true extent of Lift 2, pethaps the desire to expand production capacity to accelerate and expand JV production. They also benefit from more thorough exploration of the JV, and conclusion of the Licence Fees Ageement in respect of ETG's 100% ground if they see geological promise there.
While many shareholders hope Rio might decide their copper capacity capital might be best deployed in buying up ETG and its OT assets, if they delay there are many reasons to believe ETG will continu3 to be an outperforming asset with a rising market valuation in the meantime.
I shake my head at how TD is now revising its copper price projections, still trailing the spot market, after their ludicrous if not outrageously accommodating fairness opinion given in respect of TRQ's T/O Bid by Rio - long term $3.50. So sleazy even if they can hide behind all kinds of slippery defences such as "it was our honest opinion at the time." I would love to conduct an investigation with powers of subpoena, threat of perjury, to follow all interactions between Rio, TRQ and TD leading up to that egregious seal-clubbing of the TRQ minority.
Anyway, if there is an exploitable weakness among ETG shareholders or the structure of the JV, I have little doubt Rio's business instincts are to exploit. However, on the other hand, ETG has hung in as a very curious and non-sensical appendage on OT for a long time after 2009 ... while we can see why management might have enjoyed the benefits of stringing things along, at some point you have to wonder why the Mongolians and Rio haven't decided to wind us up. The arbitration - a chance to close a door or resolve one set of ambiguities affecting valuation. Rio surely has plans that would add value and they are waiting on a resolution of ETG as well. No freebies from them!
it's all okay, but I agree some shareholders may run out of time even if the share price is appreciating nicely in the meantime?
cg