Moving On. Regardless of the reasons(industry cost inflation,poor management , maybe both? ) after reviewing Q, I have no faith these guys will have much equity left when they are done with the new properties. Maybe TC shareholders will end up with 35-40% of the gold stream if they are lucky. That is not enough to cause a big pop given the debt burden.
Departing now is odd, based on your reasoning. They have no more of a debt burden now than they did before this q release. And the $200mill for the additional 12% gold stream effectively replaces the $200 mill revolver credit line. So in some sense they will now have less indebtedness than they otherwise would.
From my perspective the biggest problem right now is not mt milligan, its the price of moly, which we need to stop falling, and the biggest risk is the price of copper, which we need to hang in there.
Valid points but the gold stream sale was it for me. Management has guided that they would be OK re: capital 3 X (and subsequently back-peddled) since i have owned this issue. My gut says (based on Europe) Moly pricing will not spike anytime soon so there may be a need for additional goldstream sales. Each sale removes much of the upside here while(admittedly) reducing short term financing risks. In the end I think they make it but Royal Gold and the 12.5% bond guys will have feed off the equity holders. In a nutshell management mortgaged the future to survive the present. I realize costs have spiked in the sector but in hindsight these guys grossly underestimated what it would take to build out a property. In many ways it would have been preferential if they had brought in a partner with developmental expertise to share costs/profits instead of trying to go it alone. I also believe one of their senior technical guys left recently. Mining expertise is in very short supply these days. I really an unsure if the current team knows what they are doing on the technical side. I have said it for 6 months---running a property and building one out are two very different skill sets. I think our current management does a very good job in the first case and lacks experience in the second.
I hope I am wrong for the longs' sake. I have owned TC on and off for several years and understand the cyclical mnature of the business and share price. The recent turn of events cannot be blamed on market forces alone. Put a different way, this company is less valuable then it was at the bottom of the financial crisis when commodities were collapsing. Management has to be held to task @ some point.
When you see TC at $6+ next year, don't be upset/filled with regret, just use it as a learning experience. It takes many years and many mistakes before you become a seasoned investor, so do not sweat the small stuff.
30 years in the markets myself. Have paid tuition many times over. $6 is possible but this is not the same company it was 6 months ago. Capital structure was ruined by last round which put bondholders in driver's seat. Simply not a compelling short term story for me. No drivers over the next few months as Moly likely stays weak and new properties will still be under construction. I may look again at year end if tax loss selling hits.
Why would I regret a higher share price next year? I am always happy to see a story work out. Best of luck.