Western Copper and Gold Corp T.WRN

Reality Plus…

[dfwrgk]

Regarding Rio, when Paul said, "Would they pay 2.0 billion, likely no... But would they pay 1.0 billion, yes perhaps."   I think that amounts to a $6.75 U.S. per share price.  

If he is a somewhat realistic and conservative guy, perhaps yes underestimating the future ahead for this ground, and the copper market remains reasonably strong over the next 12 months, I think $6-$8 is what we might expect in their offer. He knows how these more-private Rio conversations have evolved the past year. We really don't. He likely already knows what they'd offer if you listen again to his carefully chosen words.  Unless another bidder appears. Which very likely might already be in the mix now, as some of you have suggested with a Gold mining partner/venture. Seems like he's saying in a year, likely not 18 months to play this out.

[Sooner]

$1B cad + $800M usd. Probably should use $5.5 usd /share and a band around that of $1.5 - so $4-$7 usd range is realistic based upon PEA and long term prices used in that....IMHO

[dfwrgk]

Ok I just used 1.0 Billion U.S. because I assumed the whole world is American.  Forgot about the conversation and this is a Canadian company. So I suppose he is saying 1.0 billion Canadian.  That seems to be a low range, for the property they have in their hands, but ok... hopefully it's more in the end. 

[jclarke042]

Let's remember Rio is offering their input to the FS. This field season (and ground game with YESAB/FNs) plus their people helping with FS, is Rio's DD for the buyout offer. bb-99 has said it generally, I've said it more specifically: the ultimate offer will be negotiated based on the after tax, base case NPV of Phase I per the FS. Add in a little of Heywood's "goodwill,"

[Heywood_Silvers]

Yep, so we have three things in play: 1)  prevailing metals prices near the time when the i's are dotted and the t's are crossed.  They will affect quite a bit which after-tax NPV figure is agreed upon. 2)  which discount rate will be agreed upon.  I look at this as the give or take "release valve" for either party.  One side can give on the metals

[jclarke042]

Paul almost certainly reads this board. I couldn't help but think his "Rio isn't paying $3 billion" was directed at us. 

[Sooner]

Hopefully he does! Lots of smart people on this board.  at a minimum, I'm sure they are just as smart as us and way smarter than some ( the meth Meathead stock house village idiot for example). probably lots of give and take in the negotiations. Rio cost of capital is well below 8% base miner rate and even below 5% gold miner discount rate used in NPV. We of course will highlight

[metalhead666]

Jesus is going to kill a puppy for all that sinning you just did...oh my!  At least a couple of the big 10 violated. For shame.

[Eyeinthesky]

You could be right. You could be wrong. But you are a dbag. 

[jclarke042]

I mean, yeah I disagree with sooner on our valuation, but a little aggressive for a first post, dbag. Let's see, are you Metalhead? Sign up date is a little suspicious.

[Sooner]

Oh geez, we have the meathead procreating ? That would be a pity indeed....

[Sooner]

Should be 144M fully diluted shares prior to Rio acquisition of 11M shares. Everyone should be using 155M total outstanding shares. At $1B cad , that's $6.5 cad per share or about $5.2 usd per share. 

[jclarke042]

Here's your chance sooner. Find me a buyout PR stating the price is X per Fully Diluted share, otherwise I'd have to think anyone exercising all their options ahead of time are privy to insider info.

[Sooner]

Ok- not 100% on that. So if 147M shares then the $5.2 usd changes to $5.5 usd.... I always thought options were excercisable in case of change of control....

[jsladek]

Outstanding options will be paid out as if they had been exercised.  One example is from a company that some people on this board might have heard of called Western Copper.  Very few people know this, but it was taken over by another company called Glamis in 2006.  The filing related to this takeover, available with WRN's SEDAR filings (in fact the oldest filing), includes the

[Heywood_Silvers]

Hi Sooner, the number of shares to determine a buyout price shouldn't include RIO's shares as RIO isn't "going to pay themselves".  Looks like we added another 2+ million shares for more cash to the kitty today though, so I would use about 137 million as of today. Back of envelope calculation as of right now:  Agreed upon NPV buyout price * 50% divided by 137

[metalhead666]

Will NEVER be 50%....sooner is coming around but there's obviously no hope for you. You're way too far gone. $3-$4 maximum

[metalhead666]

LOL...you all keep creeping towards what I told you it would be....too funny.  The one guy putting out the reality that you all block as you whipped out stupid numbers only to painfully see the light that you're only getting $3 to maybe $4....which ain't bad.  I'll take it all day long. Your grovelling apologies not accepted.  BHwa!