If the $500M savings figure is accurate, that would make greenfield Adina one of the most expensive developments in the world. It’s hard to believe a greenfield project would cost around US$750M for a 280kt mine and plant, especially when PMT's CAPEX is just US$487M for a 400kt operation.
CE must be absolutely certain that we are going to secure a partner for Renard—otherwise, these statements could back him into a corner. If we miss out on the Renard deal due to further delays, the market will assume Adina actually costs ~US$750M to develop independently, which would make securing that level of CAPEX extremely difficult (if not impossible).
Alternatively, he may have to admit that the "$500M saving" claim was completely overstated and that developing a project in Canada isn’t nearly as expensive as he suggested—something PMT's CAPEX clearly demonstrates.
He’s taking a huge risk by inflating "savings" before locking in the Renard option. It’s a double-edged sword: if things go sideways, he’ll have put the company in an even worse position, as he won’t be able to walk back those comments about greenfield development costs. And at this stage, that possibility is still very much in play.
WR1 Price at posting:
27.0¢ Sentiment: Hold Disclosure: Held
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