Hmmm. Given I think the Canadians have colossal reserves and are possibly the most efficient producers in the world with cutting edge technology, and will get us into production very rapidly probably they are a good partner. Their problem is they aren't yet exposed to Cu highs due to hedging so they are driving an extremely harsh bargain.
Raising capital to fund the Roseby build is not a big problem for them, as they are 26% owned by Mitsuibishi, which won't let them go into receivership and M want their mitts on our Cu as the price is set to go ballistic However they do need to get out of this bind with hedging, which must have been part of their original loan agreement, probably with Mitsuibishi, which has a financing arm. The hedging is significantly limiting their upside. I don't think they will make that hedging mistake again.
On reflection I think this deal should be voted down. Then we will see how much the Canadians need us. (a lot!)
Surely as the deal requires 75% approval by shareholders, it should be easier to vote down if we have at least on major shareholder who thinks the same way. The more I think about it, the more likely it seems that will be the case.
AOH Price at posting:
13.0¢ Sentiment: Hold Disclosure: Held
