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Entree Resources Ltd T.ETG

Alternate Symbol(s):  ERLFF

Entree Resources Ltd. is a Canadian mining company. The Company is focused on the development and exploration of mineral property interests. The Company is principally focused on its Entree/Oyu Tolgoi JV Property in Mongolia. The Entree/Oyu Tolgoi joint venture property includes Lift 1 and Lift 2 of the Hugo North Extension copper-gold deposit, the Heruga copper-gold-molybdenum deposit, and a large underexplored, highly prospective land package. The Oyu Tolgoi project comprises two separate land holdings: the Entree/Oyu Tolgoi JV Property, which is a partnership between Entree and OTLLC, and the Oyu Tolgoi mining license, which is held by OTLLC. The Entree/Oyu Tolgoi JV Property comprises the eastern portion of the Shivee Tolgoi mining license and all the Javhlant mining license. The Company has a 56.53% interest in the Blue Rose Joint Venture. The Company has an interest in acquiring a 0.5% net smelter return royalty on the Canariaco copper project in Northern Peru.


TSX:ETG - Post by User

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  • CountrygentX
Comment by Countrygenton Nov 08, 2024 1:26pm
182 Views
Post# 36303596

RE:RE:RE:RE:RE:RE:New Press Release - Entrée Resources Announces Third Quarter 2024 Results

RE:RE:RE:RE:RE:RE:New Press Release - Entrée Resources Announces Third Quarter 2024 Results

Judges rely on the evidence and arguments made by counsel in front of them, and they have to respond to the pleadings as filed by the parties.  You might be a little hasty on slagging the NY judge as the point you are making may not have been apparent from the evidence.  And recall they were pleading misrepresentation so what is probable is there are no statements made by or signed by Rio's BofD that are actionable.  The individuals who signed-off on filings and statements were likely all TRQ people.  And the corporate veil is important in how all limited liability companies operate, raise capital, etc.,. Now, maybe TRQ is liable and Rio might have inherited those liabilities when it acquired TRQ, I don't know.

Pentwater no doubt got snookered like the rest of the TRQ shareholders - but I would say it wasn't misrepresention coming out of TRQ that did the greatest damage, it was the reverse of what Pentwater is saying - it was the loud and ongoing arguments and criticisms between Mongolia and Rio Tinto, and the construction delays (some of which may have been advisable to avoid some great engineering blunders in the mine design).  Rio Tinto and Mongolia both want to own all of OT, so listening to them bicker and run down "stability", "profitability", "predictability" ... when they were the most likely buyers of this prime, fabulous asset ... it just suited their long term goals so well.  

So, if Rio Tinto had been more prompt in coming out and saying they were concerned their block caving plan was flawed and they needed to double-check, revise, delay, would it have made any difference at the end of the day? I'm not so sure.  It might have affected TRQ stock price, sales and purchase in the interim, but end of the day the bad news was what the press lapped up and it was essentially misleading - TRQ's perceived value was trashed.  Pentwater's ultimate complaint isn't that they couldn't sell out earlier, it was that Rio Tinto's successful offer for TRQ was not fair - and that depends on the valuation opinions, things like that outrageous $3.50 Long-term CU price TD used in the fairness opinion.

Then they go in front of a Judge in Canada to approve the buyout and point to the premium to market as important evidence of the fairness of their buyout price.  When all the bad news they and Mongolia together created by ugly, prolonged negotiations had exaggerated the perceived political risks in Mongolia and got the press referring to OT as a "troubled" project.  Sleazy!

They (Rio) in my opinion did a masterful job in making OT look like a lame ugly duck when it was always a beautiful swan.

Hopefully now it is clear that Lift 2 in particular is an absolute gem, copper and gold long term prices are very favourable, and ETG is worth a heck of a lot more than the market is pricing it at as it stands, only because Rio Tinto and Mongolia have engineered the uncertainty of no tax stability.  Which no doubt was the point of the arbitration, and why Rio Tinto will now come to the table - because it is clear that as soon as they and or OTLLC own ETG, that political and tax uncertainty and major discount of value it's vanish in a flash. Then, they will expand the production capacity, accelerate the mining timetable, and the ETG JV assets will we worth multiples of current implied market value.

But like we have been saying, time is now running out - Mongolia and Rio Tinto are four times more injured financially by delays in progressing towards Lifts 1 and 2 production from higher grade ore as the 80% owners than ETG as the 20% owners.

Time is slipping away, as made clear by ETG's most recent disclosure, and the story of Rio Tinto pressing to resolve the ETG situation.  Be right, hang tight, lots of upward revaluation potential here!

cg

 

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