a perfect marraige, page-21

WEC's sp today says it all...going no where fast.

Its a HoA for an initial 1mtpa...moving to 5mtpa. Nothing to get excited about. WEC needs to do much better than that to justify its $550 mill mcap (ESI $30 mill mcap). The Chinese coy is in the top 5 - why have they set a ceiling at a lousy 5mtpa? Tincom is setting a ceiling at 20mtpa (100mtpa possibly).

There is plenty of room for ESI (and CCTC?) to get a similar deal with the same coy when the time is right.

WEC seem to have changed their business model - before they took large equity positions - now they are changing to the ECT model. Interesting.

The 35% is impressive (however the ann indicates there is plenty of wiggle room for the Chinese to "negotiate" that figure down)

ECT management have said future deals will be on more favourable terms for s/holders (than the Tincom deal). In any case - if ECT can deliver multiple deals with $5+ royalty...and 5-10% free carry - I would rather that than 'hope" a project comes good at 35%. Spread the risk.

First deal is the hardest. ECT will have more leverage in future deal making (assuming Tincom happens). WEC will have "real" competition then. The profit margins will be more aligned. The Asians will see to that.