I have to say these guys have horrible timing. They bought Palmero before prices dove a few years back and now they bought Orko before prices collapsed. If they waited a month or two they could have picked up a bunch of companies on the cheap. Last time in cost them the Franco deal. What will the Orko deal cost them?
we actually paid 100mill and 11 million shares replaceable for much less now-we added joe Phillips,kennedy and Mitchell great assets in themselves because of orko they will also help with rochestor and palmarejo -kennedy just straightened out piquitas so we get also bolivian experience Argentinian experience and Phillips previous experience at la preciosa and recent mexico at pitarrilla-then we have Mitchell from taesko-these guys came for preciosa and a growing future not to do maintenance and rehab-you get to build according to Phillips at the best time-that means good prices, with a teams so we build below budget and on schedule-the complete overhaul of management will not be lost on those who know -these new men have credentials-the orko deposit world class and does balance our country risk another benefit-judgement is being swayed by some of the worst sector sentiment at moment-orko has drilling to do and a pea its early to make these sweeping judgements using palmarejo as a template-we may not have gotten orko at a capitulation bottom but there are not many deposits like this available-200 million ozs plus and a very valuable crew-silver is down today again but what if it is 30/35 come sept-you were not going to see a dividend anyway-so be happy with stock buyback or another accreative purchase maybe at capitulation lows -
Puggy_ Buying a big silver ore deposit is not an easy task, ever. Prior to buying Palmarejo, Coeur looked for over a year to find the right buy. On that one they paid in nearly all shares at a market high and as such came out of it shinning when a short time after the deal Coeur's shares were dragging the bottom...along with everybody else. In this case with ORKO, waiting for the market to go get cheaper. Majestic wanted bad but just didn't have the cash to swing the deal. Just having all those silver reserves locked in will pay dividends to Coeur even if they need t o delay construction. There will be no repeat of the N/F hedge! Dilution is a possibility if share prices make it an attractive option to fund La Preciosa or other projects. That is how the Publc Listing process is suppose to work. I like the purchase pending any unforeseen problems with water rights.
I understand that funding with shares at a high is not a bad thing, but you cant tell me Palmero was a good deal. 5 years later the stock is as low as it has been and sharholders have made no gains. One reason silver mines and gold miners share price is so low is that the business model is not making any money for shareholders. The companies buy the property, spend a lot of cash to devolpe it, and use what litlle they made to start over again with a new property. Where are our dividends, cash flow, increased equty? All they are doing is keeping thmselves in a job. People invest in companies to have the company return capital or increase share value. Niether have happened.
they paid with higher priced shares and only 100mill in cash-also we bought at 18 month low on miners -just didn't get bottom-joe Phillips said this is the best time to build mine-everybody scrambling for work, .good prices and a teams-that was backed up by article on hycroft coming in possibly under budget and for the last decade building prices up256% and since 2011 cost curve bending down---time will tell if these prices stay collapsed-but you are right as to deals out there of small producers and jr explores but this was biggest and best and most advanced deposit-also first majestic forced the issue it was bid or lose it to a competitor and future challenger in mining space-orko brought them Phillips,kennedy,mitchell-whats that worth for the future-have some vision
I don't think they got it near the bottom. Orko's price is the only gold stock up this year. Shoot they could almost buy Hecla right now for a little more. I also don't think buying a property to beat another miner to it isbthe best plan. It's not like in this environment they could not buy another small miner that has run out of cash for pennies on the dollar. The best thing was locking up the financing when they didand they just ran out and spent it on a property that is going to take cash flow they dont have to bring online. This means more possible dilution.