Metal prices have to rebound at a minimum to bfs base line
The base case metal prices and exchange rate were as follows:
• copper – US$3.25/lb
• gold – US$1,445/oz
• silver – US$27.74/oz
• molybdenum – US$14.64/lb
• exchange rate – Cdn$1.00:US$0.97.
Price are not that different and this is a multi-deade mine.
The fact that Teck was able to back in for an initial payment of approximately $24M I believe is the number was a give away imo.
We have debunked that notion here. We didn't give anything away. Do the math on what we would have received under the strict wording of the Option Agreement. We were only entitled to matching spending (4 X). We got most of it in much-needed cash instead. It's a better deal than what you should have expected from the Salazar.
The fact that the old Salazar agreement was scrapped puts Teck completely in charge with no obligation to proceed until circumstances make it conducive to do so.
That is no different than what the Salazar Agreement called for under Teck taking the 75% option. The operator of a project is always in charge.
Teck has a lot on its' plate right now.
The Schaft Creek project is in line with their stated objectives of increasing copper production with long-life assets. Dr. Keevil's words. SC is right in their back yard and is the most advanced project in their pipeline that they haven't already put into production. They will likely bring in a partner to help finance.
They are considering a bid on Las Bambas which goes into production in 2015 and if successful would put less pressure to proceed with Schaft Creek in the near future imo.
Profit is profit. If Teck takes at 25% piece of Las Banbas with production to start in 2015, then Teck's share of the annual profits their would be more than enough to fund their Schaft Creek obligation. Sounds like a good investment. I encourage Teck to get a piece of Las Bambas. It's an attractive asset.
They are also proceeding with their Fort Hills project which will surely be a priority.
IMO, Teck has long ago prepared for their financing role on this project.
I don't know the expense required for these three projects and I'll leave that to the numbers guys but I sincerely doubt that Teck would proceed with all three.
You would have to pull out realisitic Internal Rate of Return data from all projects and then understand Teck's risk tolerance. The data is not available. Waste of time. Focus on the economics of the project. If Teck can't finance it someone else wanting safe profits will.
I would think that SC would rank #3 imo
See my anser above.
The drilling results are crucial to a production commitment near term.
Okay.
The drilling results are also crucial to attracting an offer from a third party that we can take to Teck for a fror.
Okay.
It's a Right of First Offer. Very different. Please read the joint venture agreement.
If the drilling results bring a commitment from Teck to proceed you will see a much more optimistic slant to my posts.
Me too!
Feel free to critique and as always jmho
