RESERVOIR MINERALS INC V.RMC

Rio Tinto Partners with RMC in Timok

[psj567]

Another risk-free ride with another major. Excellent strategy of introducing a competitior to Freeport in the Timok complex. This will be a catalyst to get Freeport to move quick.

[cd673]

good for reservoir for sure. kudos to management rio tinto is a really BIG player. too bad the market for copper is in the tank and more significantly freeport on  life support.  one should also not lose sight of the fact freeport and rio are partners in part of grasberg. i wrote about this  scenario a while ago - that freeport tries to bring in a friendly partner on timok.   i

[psj567]

RMC may be the smaller company but they hold significant leverage over Freeport and any would-be acquiror of Cukaru Peki in Timok because they own the Right of First Refusal over any sale by Freeport of its majority interest in Cukaru Peki.This legal right is what in the end will drive a significant premium for the purchase of RMC by a third party (perhaps Rio) even in a crummy macro-environment

[cd673]

so I am clear. this is a big win! rio is the A team. i'm positively excited here.  my only point ia a right of first refusal is of less value in a bad market than a good one. if someone offers fcx say 750 mill for their share of timok, which is about pro rata to reservoir's 250 market cap today... how would reservoir exercise it's right?  where can it get 750 mill. issue

[psj567]

RMC itself would have no problem obtaining a combination of debt and equity financing to acquire 100% ownership of Cukaru Peki-- even in this market-- it is that great of a discovery. However a likely scenario under any such attempted sale by Freeport would be that a third party (such as Rio) who wants to match the purchase price (because they think it is a good deal) would simply first buy out