Haha, pretty accurate, but I think it's a bit harsh to be compared with the dumpster fire that is AGY, at least for the moment anyway. You can only work with the information available, and everything disclosed about this raise so far has been negative. I’ll gladly retract my comments if new information emerges that puts this move in a more positive light, but for now, it looks pretty bad.
The only reassuring thought I have is why introduce a break fee if they weren’t planning to exercise the option? They could walk away now without any financial penalty, yet they’ve committed to a break fee if they pull out. It’s not a huge fee, but still—it wouldn’t make sense to take this step unless there was a compelling reason forcing their hand.
Assuming the option is exercised by 31 July 2025, that’s costing us C$1.55M (US$1.09M) per month. As Chris pointed out late last year, he expects to bring cold care and maintenance costs down to around US$5M per year (C$7.09M), equating to about US$600K per month. So with this extension, we’re effectively paying nearly double what we would if we had exercised the option and put Renard into cold C&M.
I have a lot of respect for Chris and think he’s been a savvy operator so far, so I’m inclined to give him the benefit of the doubt. There must be a very good reason behind this because it doesn’t make sense to pay double the holding costs and risk significant break fees just to prolong the process. I guess we'll find out soon enough.....
WR1 Price at posting:
42.5¢ Sentiment: Buy Disclosure: Held
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