Royal Gold say the sale of Mt Milligan is at a mature stage.
Scotiabank estimate of effect on Royal Gold
Thompson Creek Metals’ (TCM) debt wall is quickly approaching and a
recent media report indicated that a sale process for Mt. Milligan is in its later stages.
As such, we have taken a look at how various scenarios could affect RGLD. In Part A of
this analysis, we review the possible scenarios that could unfold in the near-term and in
Part B, we look at possible outcomes if TCM were to enter a bankruptcy process.
We believe the market is generally pricing in a favourable outcome for RGLD – yet we
could see ~10% further upside if a positive deal is announced (i.e. asset sold with the
stream intact). On the flip side, if TCM is unable to work out a deal and announces a
bankruptcy, we could see ~30% downside in RGLD shares. There are other possible
outcomes that fall in between this range.
Mt Milligan stream is valued at $894 million to NAV Royal Gold.
Brexit hasn't changed anything fundamental about oil in the short term and probably not long term either. Once the flight to the American dollar is over and US currency drops again the relentless climb in oil price will continue. Give it a month.
Gambler, Yes I have looked at the WTI price vs BTE stock price.
The equation below gives an estimate of the relationship between them.
BTE = 0.0034*WTI^2+ 0.0177*WTI + 1.4491
This equations prediction lines up with fairly well with the stock price predicted by calculating the free cash flow per share from each well site and multiplying the total by 8.
The results for $50 dollar oil are the essentially the same $11.
I discount this some what for the uncertainty of the future factor.
The potential is there.
Good luck to you
BTE latest presentation reports that they have reduced the break even at Eagle from $35 to $32/BBL at Peace from $47 to $46 and Lloyd from $44 to $43. The leverage of the stock value to increasing oil price is huge. IMHO this stock is still way undervalued at $50 oil.
Increasing demand and supply disruption have put the market back in balance. This verified by the futures market. In the last six months, the degree of contango in both Brent and WTI futures has shrunk significantly, consistent with signs of strong demand and faltering supply.
The average contango price between 2005 and 2014 was $1.50 per barrel. Today it is now around $2.00.
All good signs for the oil market to remain above $50. BTE price should continue to rise on this news.
Saudi Arabian Oil #$%$ Monday raised its official selling price for Arab Light crude in Asia for the second consecutive month. The company said that the demand for oil was good and they were raising prices by 35 to 65 cents per barrel depending on the grade. This should be good for BTE stock price today.