Ann: NCZ GRANTED EXCLUSIVITY FOR POTENTIAL ACQUISITION OF GORO, page-91

@Vector

That is just speculation on my part (we still don't know the details of the negotiations) but to answer your both questions:

1- why Vale wants to get rid of such a good asset if it is possible for them to simplify the flow sheet of the asset and turn it profitable?

The most obvious answer is that at the new simplified flow sheet, the substantially reduced scale of the project and expected revenues and profits from the asset simply do not move anymore the needle for Vale.

This is a common and rational behavior for all investors be it companies or individuals. It is like asking Warrenn Buffett or Bill Gates today to invest in a great 10M$ valued microcap/opportunity/project/idea (you name it) while their net worth is north 100 billion$, it is simply not worth their time, energy, focus or effort, even if this great investment opportunity turns out to be a real Disallowed, it still wont move the needle for their personal finances. What is 100M$ compared to their 100 billion$? it is only 1% and that is if the opportunity turns out to be a Disallowed if it turns out to be just a 3 bagger it is 0.3% of their net worth so why even bother?

2- If the answer to the first question is the obvious "it won't move the needle for them", then why not still develop the project and make it profitable and only then sell it at a higher price to the highest bidder instead of selling it today as an unprofitable/risky project at a much lower price?

The answer to this question is included in the answer of the first question: it is simply not worth the time and the devoted resources of a company like Vale, they have better things to do and to focus on and better for them to get rid of this asset as soon as possible. It is like a rich individual who buys a nice luxury collection car that turns out to be faulty and requires a myriad of maintenance operations / new parts installed (1-year job). He could spend his time and energy to do all those operations and then either keep the car or sell it at a much higher price to the highest bidder, but simply it ain't worth his time and energy because he could sell the car now at a loss and just buy another one in a much better condition that he could enjoy today rather than in one year from now.

That is also for example why there are always some great opportunities in the real estate market for assets that require maintenance and renovation. You may say that the owner/seller is dumb, he could have spent the necessary time and resources to renovate the asset and sell it at a much higher price. But if you shift your perspective to his, he is actually smarter than you gave him credit for, he has better things to do with his time and bigger opportunities to seek with his energy and resources. It would have been stupid for him to waste his time and energy renovating the asset while he has better and much bigger opportunities to chase after.