$1.9B to get $140M/yr at current prices. Not a great return
I think the CEO felt pressure to justify his existence and made a bad deal. These are the kinds of deals Barnes did not want to make so he left.
I have a question - a question from someone who's never invested in SLW, not studied it deeply but have found the streaming concept interesting. I thought the basic premise of the streaming model was to grab a healthy share of future revenues streams by providing financing, i.e. up front money for developing companies who do not have a myriad of options open to them. How does the VALE deal fit into that model? Surely they have lots of options and don't really need the financing, do they? Why would VALE do this deal with SLW unless they thought they were getting the better of the deal by a wide margin? And yes, I admit this is a question of ignorance, but please don't take it as a bash...
foreverwhiteroses,Vale made the deal because they need money, they have $ 31.63 Billion in DEBT, it is that simple, and SLW took advantage of the situation. I would not be surprised if SLW sp hits $ 100 within 18 months.
because VALE ironically sees the gold as a by product metal. I don't know these mines but I am guessing the primary metal is copper or nickel. They really don't care about the gold. They could get financing from a bank, but they don't want to pay the interest or have the risk of lower gold prices in the future