The Real Option value is what's left at that point. Replacement cost is probably the least useful of all valuation tools. DCF has its place but it's not the end-all-be-all of valuation models. Each have their pros/cons and metrics purposes. I agree though... DCF as the ONLY yardstick is silly.
Sadly, I've reached point where anything above $3 is "friendly". OBVIOUSLY, I want and hope it to be higher.
Foogie, same question I'm asking. There were no new analyst rating changes. Volume was "high". I'm thinking there was an sec filing that hasn't posted to the website yet. I've seen that happen before which is why I mention it.
Gold and Cu both up big today. Yet TC is down just as much % wise. What gives? Nothing new posted (yet at least) on SEC filings. Hmmm.
New mint Mining. What do you know. Shocker. They do cost cutting and push out some capex in order to generate enough free cf to payoff a $200m bond that came due. Gee, I wonder if there's any lessons in there for perron/ TC ... I wonder.
"J.P. Morgan analysts especially liked the strong first quarter at Batu Hijau and Yanacocha and the deferral of some capex that allowed NEM to generate $344M in free cash flows and pay down $200M in debt; the firm says full-year guidance could be raised if cost reductions can be maintained in Q2."
Basically, $10M to the gang for change in control --- not including whatever the value of their shares are at the exchange. Potato makes about $3m in a buyout + shares owned already.
"The lack of new copper projects in the pipeline could result in a market deficit earlier than the big miners expect, according to Citi, which forecasts a deficit of 61,000 tonnes for 2016.
“We believe downside price pressure has been overrun and investor positioning has been oversold,” said David Wilson, an analyst at Citi."
Interesting read though there's obviously stuff we already know.
"High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. The world’s largest miners, from Chile’s Codelco to London-listed Rio Tinto, do not predict copper demand to exceed supply until at least 2018, after which they forecast growing deficits.
Citi, however, says that could come sooner, in 2016, as the pipeline of new projects empties."
Ouch!!!! "High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. In Chile, the country that produces the most copper, state-owned Codelco, plans to spend $25bn over the next five years just to maintain current production. The company’s large mines are ageing, requiring deeper digging, while the company is also spending on desalination plants to use seawater."
"High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. Financing for early-stage projects for private miners is proving more difficult to obtain, however, despite the predictions of a copper deficit after 2018 by the major mining companies. It takes about 11 years to develop a copper mine from advanced exploration stage through to commission."
Light, take refuge in the fact that they do have one asset that is a cash machine -- and obviously a low cost producer. Therefore, there is at least something there that other miners would want to own. It all the trash mucking up the neighborhood (debt, c&m, etc) that sucks. Think of it as a mansion in the middle of "the hood". Someone will always want that mansion -- albeit cheap. Anyway. The only way I see this thing dipping below $1 is if they announce a major dilution to raise cash for the debt. And even then... it might be a wash (dilution vs debt redux) to keep it well above $1 to maybe $2 or more....???
Wrong Tyler. Plain and simple -- for this particular case. If anything, if calls for a bigger wagon. Also, we're talking about execs... not rank and file employees where that advice would be far more appropriate.
The fact that Shellhaas wont be in a position to continue setting the house on fire will be a bigger cash saver than his salary. His comp savings is just the icing on the cake.