Post by
materialsgirl on Sep 11, 2014 2:14pm
yes madfatter
What you say is totally true. It could happen and in fact it might happen. If copper climbs up to $4 (it was $4.50 3 years ago) and nickel goes to $15 (it has been there and has a good chance again within 3 years) then the DM assets would be worth a fortune.
My caution is that this may not happen inside 10 years and DM needs to dillute and dilute and dilute in the meantime. If the company quadruples in value but there are 4 times as many shares then a shareholder is no further ahead. There is a big risk that the project will stall for years and there is always a chance that permitting will never be granted. Multi metallic mines are also much susceptible to metal recovery challenges. In other words an open pit copper mine with 1% copper grade is always better than a similar property that has 1% equivalent copper made up of copper gold silver palladium etc as equipment is lower cost and operations are more simple
A key factor when describing a company as cheap by using $4 copper or $1,600 gold or $150 iron ore or $600 potash or $120 oil is this; sure it is cheap but are there others who would benefit even more by these commodity prices.
Dilution and long long timelines are the headwinds facing DM
It is almost 100% sure to become a mine one day. But the ever present question is when?
My view is that a takeout is the best option for DM
mat
Comment by
estebancaballo on Sep 11, 2014 3:08pm
An open pit mine may be cheaper but it would also get a lot more resistance from environmentalists than the type of mine that DM is proposing....imho.