At least we would have gotten all their Liard shares and 100% ownership of the property back if they didn't make a quick production decision though.
There weren't any time limits, just a minimal amount of dollars to be spent every year. It would not have been a quick production decision guaranteed.
Although we would have gotten all their interest back, it would have been almost worthless since if Teck deemed it a poor project I doubt anyone else ever would (in our lifetimes anyway and that's all I care about.)
Did they actually spend $15 million for 2013's drilling?
I thought someone reported that Elmer had said Teck spent about $15 million on the project this past year. Clearly it wasn't spent drilling. I was hoping they were looking at the mineral recoveries since I think that might have been the quickest way to improve the project overall.
They could have chosen the 75% option and drilled for two years and then bought us out.
The reason I don't like this option is because Copper Fox would not have had cash for those two years and we would have all faced lots more dilution.
Yes, (*)with a production decision.
Don't forget that someone has apparently said that a decision not to proceed is also a production decision and that we would get the remaining $20M. Of course, that might be small comfort at that point.
There were cheaper ways of achieving the 75% ownership, but not any that gave them the operator control.
I think they might have been able to walk away from the deal and then let us suffer a bit, then start to negotiate on even better terms than our current contract. These are really hard times for funding juniors and I just don't think anyone else would have taken a risk on the property if Teck had walked. We'll never know, so it is just speculation.
Parts of it would likely be be modified by a court (such as the 4 year clause as it would be unrealistic to be able to build a mine of this size in 4 years).
I am on a personal quest to remind people that this clause did not ever exist in the Salazar Agreement. There were no anti-mothball clauses in the Salazar Agreement beyond the need for Teck to spend about $250K per year, and that has been bumped up to $500K about in the current contract.
This 4-year clause supposedly existed between Liard and Teck. Now Copper Fox would also be a party to that contract since we own about 25% of SC, and whatever percentage of Liard. So, if this clause existed we would also be required to complete the mine within the 4-year period or else lose our share. This is not a clause we want to promote, since it is held over our heads as well and would be even if Teck walked. Besides which, if it existed Teck/Copper Fox own 80% of Liard and could change it presumably.
