C6C (ASX) Ann: Copper Mountain Mining Agreement to Sell Eva Copper Project

Originally posted by oblong123: ↑

A pretty good outcome after all these years - a long time for us weary old AOH holders still hanging around to get value from the asset!
I think they'll keep some debt, it can be good if used wisely. Hopefully their next CFO is up to the job

I had to look up what they acquired Eva for back in the day (November 2017) "The total consideration offered for all of the outstanding shares of Altona is valued at approximately A$93 million and represents A$0.17 per share, a 41.7% premium to A$0.12, the closing price of Altona shares on the day prior to the execution of the deed"

potential A$350m+ for A$93m, not bad for 5 yrs. can't recall what CMMC have spent on developing it since then

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The $93M they paid for AOH included about A$40M of cash reserves which they got (and promptly spent, not on Eva).

So it only cost about $50M to get Eva. They've spent very little on it, just some minor drilling and yet another feasibility study (must be about the 10th that has been done since the URL days). It's pretty frustrating for me as a holder since those days, there was a small group of us who could see that Eva was clearly worth multiples of AOH's market cap but Cowden wasn't able to either fund it or find a buyer. As so often happens in this stupid country, it takes an overseas owner before anyone will take it seriously and suddenly everyone appreciates the true value.

I sold my C6C last FY when it was over $3 and when I finally did the sums - from VCN to URL to AOH to C6C - I ended up with a 27% profit after holding for 15 years! Better than a loss I guess, but really brings home to me the lesson that the rational market is a myth.

As I've said before I expect CMMC will look to delist C6C after the sale is completed. There's no reason to wear the cost of a dual listing and associated compliance when they have no interest in Australia any more. I did intend to buy back in to C6C at a decent price but not sure I will bother now. I think CMMC is a good company for copper bulls, it's a fairly high cost operation so it's heavily leveraged to rising copper price, long life mine, and now the debt will be mostly cleared which takes away a lot of the downside risk (which is that a period of low copper prices puts them in loss making territory and likely leads to heavy dilution).

I haven't found another ASX listed producer in a similar position to take advantage of a copper squeeze, where the production costs are in that sweet spot where they're low enough to be mostly profitable through the price cycle, but high enough that the market is leery of valuing them too fully. Plus a long mine life which is a must for me, and preferably gold and silver credits.