Hi
@TheGekko, hi all,
Sorry, I didn't explain the Mcap AGM comment clearly. The indication was that any kind of merger, with an accompanied raise/IPO or STREAM funding deal with a partner would be much better done with higher MCaps all around. I.e if BAR and CNJ go into a new venture with their current values ($12Mil each etc) they'd not be able to raise much/may not get as much money from a partner, even with Creasy onboard. Existing shareholders would get screwed. The question then becomes, OK, so why so little being done to market the JV to bring Mcap up right now?
A couple of things that were emphasised at the AGM are worth re-iterating here:
1: Potential partners have not been bothered by the current situation (3 owners). In other words, discussions are taking place, have been for a while now, and interested parties are comfortable with the idea that, if Mt T's economics stack-up, moving ahead won't be a problem - so there is a clear model that has been put on the table. Clearly something more agile and appealing than what we have now.
2:
The JV are in regular discussions with Creasy, they get along well, and all parties 'see the resource being developed as one'. In other words, don't worry, we're all working towards a single plan, we just can't talk about it yet. Why? That's the interesting part that we'd all like to know.
Reading between the lines (and with my belief that Barra directors are honest and excellent operators, and moving as fast as they can) my complete guess is that the JV directors are an annoying bind:
1: There are talks taking place but they can't be discussed. VW or whoever wouldn't want competitors knowing what they are up - they want to be the ones to bag the opportunity. Potentially it has even been asked that the possibility of the resource being amalgamated not be marketed at all, yet - to ward off others looking for resources? Who knows, but that's what I'd ask if I was on Panasonic's cobalt supply lock-up negotiating team.
2: Nothing much can happen until new METS arrive and the JV and Creasy get a more solid feel for the economics.
3: No point in marketing the current Mt Thirsty JV when the project may be about to A, grow in size, B, change name, C, get a big off-take partner, D, get a JV with creasy, or all of the above. These things which each generate a lot of excitement and render any prior marketing lost money.
Remembering that until now Barra has been just two people plus a board, and have been, by the looks of it doing a lot of the work. My guess is that, as damn annoying as it must be to see the SP tank, investors annoyed etc, it's just been a simple question of priorities. Two people working on both gold and cobalt - so the Mt T focus has been to get the SS done, prove up the resource, do deals AND THEN go to the market and say 'Look what we have'.
There's another thing. The directors and major shareholders own a LOT of BAR and CNJ. They don't want to do a big IPO to fund the mine, they want a partner (VW, Panasonic, yes please) to pay for the mine upfront - debt raising VS equity raising. This is obviously a far less common avenue to go down for a junior, and who knows how it could work. An unusual deal could be a big part of the reason there is so much secrecy/mystery.
@TheGekko - re BAR/ CNJ expenditure - I've not looked into it in great detail, but I believe a lot of CNJ's expenditure was buying their half - $9 million from memory.
Time will tell. I could be so so wrong on my guesses above, but I come back to this simple logic:
Barra directors are NOT idiots - they are highly experienced operators.
We can be sure they want to make money.
Companies are scouring the globe looking for cobalt resources and high calibre consultants have show Thirsty to be viable and very appealing on a cost/quick to mine basis. Big companies will have found Mt thirsty.
Thus, the lack of marketing and visible action from the JV (beyond new METS and promise of a PFS) is very likely the result of strategy, not stupidity.
Finally - any doubts as to the competence of Barra directors - call them. They're easy to get hold of, generous with their time and I think excellent.
Solarbat
