Re: You got to agree Mudguy
in response to
by
Welcome To the Copper Fox Metals Inc. HUB On AGORACOM
CUU own 25% Schaft Creek: proven/probable min. reserves/940.8m tonnes = 0.27% copper, 0.19 g/t gold, 0.018% moly and 1.72 g/t silver containing: 5.6b lbs copper, 5.8m ounces gold, 363.5m lbs moly and 51.7m ounces silver; (Recoverable CuEq 0.46%)
Message: Re: You got to agree Mudguy
FED UP, it is best to let other's words speak for themselves. So here's a sample of words from Mudguy's keyboard to keep in mind (remember, this is the same Mudguy who has supposedly invested his money in CUU again -- my bold, for emphasis, FYI) :
May 3, 2012 (CUU share price: $1.27) :
My views about CUU are pretty clear. Still think the pit is a geotechnical nightmare and Teck just trumpeted it's Chilean copper developments (and low cost operations) in the Globe and Mail. Articles like that come from companies now, so it is a material signal from Teck about their vision and priorities. I think there is real risk with CUU. Potential upside, but nothing here is assured.
March 28, 2012 (CUU share price $1.02) :
A tougher question is why would Teck buy a second large, capex-intensive deposit in a relatively remote area with limited work force? Don't forget, Galore is on the books and Teck has lots of BC risk already in place. Argentina on the other hand...
I hope someone buys 25% of Schaft for $2B- that would make every other copper deposit in the class worth 4 times more overnight. I would not bet on it, although some folk seem to think it likely.
March 19, 2012 (CUU share price $1.08) :
It might be a district in some minds, but the numbers clearly indicate that CUU is middle of the pack for resource size for a copper porphry. Several companies out there with deposits that are multiples of SC with the same upside. Taca Taca is probably six times the size, Pebble... CUU has good metal credits, if the silver is included, which make the potential operating cost near to zero (negative in the 2008 PFS), but events today suggest this is not assured yet. Still lots of risk.
Feb. 16, 2012 (CUU share price $1.40) :
Foxy, just swing trading CUU now. Not much to keep up on with CUU- just delays and OK assays. I hope it ends well for people, but my view has not changed since December.
No mention here about why delay in FS. No one wonders why the pit design is not public yet.... Hmmm.
Further to Feb. 16, 2012:
That 2% area concept is a non-starter and vacuous at face value- who believes that nonsense? The property is highly faulted and mineralization is localized and increasingly, ast the data shows, deeper. We all know that insiders have stopped buying enmasse and the market has been luke-warm to continued delays. Nothing in these results is material to the FS, unless it is coming out in 2013. Let me guess, capex is still going to be the same as 2008 PFS?
Dec. 6, 2011 (CUU share price $1.14) :
Lots to respond to. The crux seems to be whether CUU sp is depressed right now due to the tight trading or other machinations, or whether the price reflects the value/risk the market is seeing. It must also reflect the delivery of benchmarks by the company, which have been consistently late, and in a market apt to be underwhelmed, precisely that. I just can't accept that 100 M shares is a small float- it could be that is being held down by trading mechanisms, in which case, a buyout based on premium is going to be undervalued, but it could be too that people have given up on it and the institutions are not diving in either.
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However, some valuations at this level ($1.25/share = about $500M *4 = $2B value for SC) are in line with an NPV on the order of $2-3B. That is why the capex is so important in the equation but we only have the companies stated goal to keep it low or lower than 2008, we don't know if they can. The RE numbers don't radically improve the NPV from the 2008 numbers, mostly due to offsetting price changes in Au and Mo and modest grade improvements. There is some prospect in several cores for higher grades initially. So while I have simplified my estimated buyout price to $2 or less, incorporating a premium, where my numbers come from is the project as we know it with limited assumptions about how new, non-compliant resources factor in. I know they might be able to increase the RE to some extent, but the extra resources are discounted out of the equation mostly. They might be able to cut capex, but no sensible comparison of pricing for a mine like this can show the way to do this; quite the opposite given general inflationary pressure, likely labor pressures in the region, remote location and increased planned mill capacity.
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I used to think a spinco was likely and would add a lot of value here. I have no way of gauging that possibility, but I'm not sure we have officially seen discussion from the company about a spinco. It has always been conveyed from the company via a poster, and like many things, has taken on a life of it's own. I'm not sure they are thinking this way or not. It certainly would be outside of my price estimate for those reasons, and would add value to the endgame.
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Thanks for your thoughts, it is helpful to think this through.
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However, some valuations at this level ($1.25/share = about $500M *4 = $2B value for SC) are in line with an NPV on the order of $2-3B. That is why the capex is so important in the equation but we only have the companies stated goal to keep it low or lower than 2008, we don't know if they can. The RE numbers don't radically improve the NPV from the 2008 numbers, mostly due to offsetting price changes in Au and Mo and modest grade improvements. There is some prospect in several cores for higher grades initially. So while I have simplified my estimated buyout price to $2 or less, incorporating a premium, where my numbers come from is the project as we know it with limited assumptions about how new, non-compliant resources factor in. I know they might be able to increase the RE to some extent, but the extra resources are discounted out of the equation mostly. They might be able to cut capex, but no sensible comparison of pricing for a mine like this can show the way to do this; quite the opposite given general inflationary pressure, likely labor pressures in the region, remote location and increased planned mill capacity.
.
I used to think a spinco was likely and would add a lot of value here. I have no way of gauging that possibility, but I'm not sure we have officially seen discussion from the company about a spinco. It has always been conveyed from the company via a poster, and like many things, has taken on a life of it's own. I'm not sure they are thinking this way or not. It certainly would be outside of my price estimate for those reasons, and would add value to the endgame.
.
Thanks for your thoughts, it is helpful to think this through.
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YourNadir's thoughts: You can see that Mudguy had come to the conclusion of a buyout of up to $2 late last year. Yet from that point he went on to express much skepticism over the prospects for Schaft Creek and CUU.
Somehow, over the past several weeks, he's convinced himself that it's worthwhile to jump in at the current share price even though solutions to the geotechnical risks that he's raised have not been magically provided.
There's no question in my mind that Mudguy is a very intelligent individual and possibly a savvy investor, but he's one that I regard with a generous dose of suspicion.
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