There will be two opposing factors.
1) Anticipation of the mine opening (on time!)
2) Possibility of some financing needed in case they miss opening by Q4.
I would not make any large investment until production starting confirmation and Q4 report and maybe Q1 report.
This is a large project. Large projects more often than not are over budget and not on time. Then there are the start up hiccups - infant mortality stuff. Then tuning the mill. Worker skill ramp-up. Mining takes luck,skill, money and most of all patience.
"How about if the do both at once"
Do you mean divvy + the stock scheme? I have found that workers prefer cash. If things beyond control of either mgt or miners cause output to miss it results in bad feelings. My preference would be cash raise, divvy and also a ESOP (at a discount).
170,000,000 @ .15 = 25.5M USD or 30.86M CAD. On a generous 200Koz that is $154/oz.
They can't cut the TMF spending. And there has to be some stope development spending. If not production will suffer. My -.06 to -.07 includes FX loss. Without that it would be closer to -.02.
I think there is room for both. Lets say the give the miners $8000 raise - that would cost them about 13M. A 1% div would cost them about 14M. With their cash and cash flow that's seems doable. I don't get the moving to Denver other than for the life style of the execs. Savings are minimal compared to everything else.
Marathon and Peregrine are water under the bridge and I don't think either side gains anything by using it as a talking point.
And as soon as union deal is done, the much talked about divvy is in order. IMO they are sitting on much too much cash. Maybe they should buy a copper mine somewhere- :-). Frustrating to think where this stock would be without the Peregrin fiasco.
BAM interest cost about $`150/oz. No way Q1 positive. My est now -.06 to -.07 (-25MCAD). Can analyze better after I see Q1. Including the recent 25M BAM has about $160M skin in the game. IMO they would take $175M and run to the nearest bar to celebrate. After the re-org I think they will buy out the 6% db holders and the 2% common and not have to negotiate or deal with anyone except a possible buyer.
"We can then start to argue what the market cap would be for a company like Molycorp with less than half the debt it currently has..."
You have to distinguish between the prospects for the company and the prospects for the current stockholders.
Even if I grant you $400M of senior debt (instead of $650) and other debt gets nothing that is still a tripling of outstanding shares. MCP may eventually do well, but current stockholders will not. GL.
Bravo. You are one of the few that understand the psychological effect of a R/S. There is the "I'm a big player" effect. Holding 100,000 shares is big for the ego. Do a 50/1 RS and it's only 2000 so those players sell and go elsewhere.
Apparent earning effect: Q4/2014 was -.51/share. So would you rather own a .80 stock that lost .51 last qtr or a $40 stock (50/1 RS) that lost $25.50 share last qtr. Also the perception that an .80 stock easily double if they "get their act together" but highly unlikely for a $40 stock,
R/S alone can take 25-50% off a stock value for no real financial reason.
Don't be so sure. If you want to see what a debt/equity swap can cause look at PAL. (Now delisted and trading as PALDF). Was .20 and two days later was .05.
If just the $650M of first lien notes were converted at current price that would be another 850M shares a huge dilution. That still would leave 1B in debt. If they get to convert some current stockholders will be wiped out. Don;t say MCP case is different. On APril 14th PAL stockholders owned 100% of the company. On April 15 their debt/equity swap left them with 2% on the effective date.
Another way to look at it is that the company has a mkt cap of 225M with 1.6M of debt. Debt holders already "own" the company. Debt/eq swap will formalize it.
Here is a possible scenario - stock may be halted tomorrow until details of the proposed swap are known. Could easily open under .40
When they report of loss of -.06 to -.07/share (-23MCAD)?
On what news or data makes you think this will triple?
Please post so you can look even more foolish.
The Company plans to issue its 2015 first quarter results news release and quarterly report before market open on May 11, 2015.
Could have done without the tape unpainter at 2.30 at 13:55. Took $8750 of my closing portfolio value. Mya go sidewyas for a while now,.
Since they are still listed on TSXV I expect they will still file on SEDAR. Last year they reported on May 1. Two months to find a deranged white knight. If the curretn holders are furious now, just wait till they see how many shares they have (post R/S) and what they are worth. Will and where will they be listed/traded? Wonder if they already burned through the 25M Interim facility. Unsecured vendors are probably very nervous. Tic-toc.
Will be going to Toronto on May 15 , maybe will drop by the office and see if they are still there. :-)
Read the annual report and recent presentations. Will answer these and more.