Oroco Resource Corp V.OCO

A lesser-mentioned reason high CU prices are good for OC

[jwall34]

Everyone by now knows that higher CU prices = higher NPV for Santo Thomas = higher buyout for Oroco.  But most people are missing just how good high CU prices NOW are for the company, which realistically is still 12-18 months from a buyout.

Have a read through Freeport's Q1 earning report 
https://s22.q4cdn.com/529358580/files/doc_presentations/2021/FCX_1Q21_CC.pdf
Specifically slide 18 - EBITDA and Cash Flow at Various Copper Prices.  At $4.50 copper (average for the year 2021, which is looking very likely if CU prices hold) they estimate yearly CASH FLOWS of 10 - 11 billion.  For comparison, their cash flow estimate for $3 CU was about 4 billion from their Q1 report last year. That's an extra 6-7 BILLION dollars in ONE year just from a rise in the copper price.

So, the question then is: What would a company like Freeport do with these extra billions?  It certainly makes a 2-3 billion dollar expense on a generational asset like Santo Thomas seem much more affordable. Now consider that every major copper producer in the world is going to have the next 12-18 months to accumulate cash while Oroco proceeds to bring Santo Thomas ever closer to the feasability stage.

[zins]

It's a good point, I was looking at the balance sheets of several of the majors the other night. And not just the major copper players others like Barrick Gold who are looking to add copper. Many are sitting on billions of cash with ample room for debt and as you say those cash piles are going to be rising rapidly. My worry is someone jumps the gun on ST before the resource is fully defined

[jwall34]

[EStreet]

I agree,,,,"majors aren't in the business of making speculative buys",,,they wont do a buyout for Billions for a property that is non compliant with modern regulations, I can see a major take an equity position in a future financing especially if this property continues expand boundaries and grades along with the program budget,,. I also think that Orocos management and shareholder

[MikPrecious]

I think the stock options done recently informs you that we are very much undervalued.