This will reach 8 dollars very quickly if oil prices can hold at $40.
From the year end statement.
"Our estimated net asset value at year-end 2015, discounted at 10%, is estimated to be $11.05 per share. This is based
on the estimated reserves value of $4.3 billion plus a value for undeveloped acreage, net of long-term debt, asset
retirement obligations and working capital."
Once the crusher is in place there will be an increase in copper/gold production. Then I don't see why TCM can not raise 300 million dollars for a fixed gold stream sale out 12 years of 50,000 ounces per year. If TCM can also buy 100 million face of the 2019 then a secured refi for 350 million will take care of the 2017 bonds and a revolver will clean up the 2019.
Since Feb 11 the price of BTE has risen 5 times faster than the wti price. If the OPEC and Putin keep talking up a freeze it could go a lot higher.
IMO this is all about an unstated understanding but not agreement with Royal Gold to back stop TCM. Going out and making the expenditures on the crusher combined with stating the preference for gold is leading up to a fixed volume streaming sale of gold to Royal Gold. That's how this will play out. BHP has said the price of copper will not rise much above $2 until at least 2020. Gold is the savior through Royal Gold.
Road 78: Thanks for the info. I was listening to a number of pundits and analysts on the future of oil this morning and the general message was one of guarded optimism for improved pricing by year end. In any cases they seemed to believe that the world oil supply demand would re-balance by the end of 2017. I also have a lot of BTE stock and I believe it is in a strong position to appreciate substantially in value by the end of 2017. Good Luck to you.
Will $40 or $45 do it. Clearly $55 will.
Just to add the remarks from RGLD at their recent conference call.
Phil Russo (analyst)
Yeah, hi there Tony, Bill, Stefan, Karli, just one question here and thanks for the call and the color on Mount Milligan, is there a scenario I’m thinking a Chapter 11 scenario of Thompson Creek where you would stop receiving ounces from that mine for a period of time, just curious on your thoughts there?
Tony Jensen (CEO RGLD)
Well, Phil there is a many, many different ways this could all play out and we’ve already said that we want to be a catalyst to see solution here out of any kind of court type system and there is scenarios if it were go all the way to bankruptcy that there could be an interruption in our production or we just can’t specify exactly what might happen in bankruptcy court.
But that’s why I wanted to emphasize in my prepared remarks that we thought long and hard about this even at a point when Thompson Creek was not into a financial situation, years is in fact ahead of that when all of the commodity prices were going at a high price we felt it was important to have security on this asset and we feel it’s a very strong security position if we have to rely on it.
NOTE: RGLD wants to be a catalyst to see a solution outside of bankruptcy court.
Surely we don’t want to rely on it, but we have that in the back if we do need it.
I agree. MM is actually a gold mine with copper as the by product. Even if RGLD only buys the equivalent of say 400 million in bonds and then traded it for half the remaining stream its a win win.
I am sure the financial analyst of both companies and their consultant are poring over the numbers.
There is no bankruptcy here IMHO.