Post by
cupricity on Feb 08, 2021 12:59pm
Reductions in risk incrementally
The nice thing about Florence is that it will keep us liquid through pretty tough times. This stock is approaching 500 million CADs market cap, but, not that long ago we sold a quarter of GIB for 200 million when we had a par dollar with the southern side. That was when CAD was a petrodollar and the oilsands was going to go on and on forever.
Now oil is doomed in the medium term, and meanwhile EVs are reducing the cost of transport exponentially through the 2020s.
We are going to have a really weird metric in the markets. EVs are going to reduce the cost of transportation by 20 to 40 percent, especially as self driving becomes a thing, meanwhile the low interest rate environment is going to send people investing in things that hold value. Like metals and mines, and land and the like.
It will be interesting to watch it unfold. I think that our stock price has priced in the Value of GIB now, and the 400 million dollar loan is giving us a decent value for florence. Although every 10 cents of copper price is the wild card. Gib gets 10 million in earnings for every 10 cents rought and dirty which should add 20 cents to the stock price.
At 5 dollar copper, who knows what is going to happen. One thing that I think is likely is that ramp up of copper mines around the world is going to be slow, costly and painful as grades are declining, costs are going up and permitting in good places to invest is painful. And where permitting is quick the lack of law and resource nationalism is a major downside.