Teck was supposed to back in by paying for their share.
Now we are getting somewhere, because "by paying" you surely mean spending on further project exploration and development. Teck, in all scenarios, retained the 75% back-in right so we never would have retained 100% (of an attractive project) and so it never represented a gun to Teck's head like some assumed.
If Teck backed-in and earned their share by spending 4X $80M, we would have received ZERO cash and would have proceeded with massive dilution waiting for $320M in spending and then waiting some more for the critical value-confirming production decision. And if Teck didn't like what CF were doing as the interim-operator Teck could quickly spend 40% of their developemnt commitment and that, according to Salazar, would have given them operator control.
I don't think you are fully appreciating the excrutiating pain we would be in right now with PP's in the pennies had the Salazar JV agreement been pursued.
Instead of eventually getting an accounting credit for $80 M (25% of $320M) we got development commitments of $60M 100% on Teck's dime worth $15M to us as a credit, plus we get $60M cash if the project is worth putting into production, for a total of $75 million.
I can't make it any simpler.
It's $75 M mostly in much needed cash where the benefits were a dividend, a great Carmax deal and AZ drilling, and massive dilution avoidance
OR
No dividend, no Carmax deal, nr AZ dilling, and excrutiating dilution of all shareholders while at the mercy of Teck's pace of development and production timing decision.
Take your pick. I say Thank God they negotiated a win-win 'out-of-the-Salazar-box' solution like this.
