gold fields signs jv with conquest..., page-44

CQT have given away a large chunk of the huge regional exploration upside they had PLUS 50% of what they have currently proved up at Mt. Carlton ...

What do I mean by that?

Simply, that if Gold Fields do the drilling then Gold Fields have an option to purchase 50% of Mt. Carlton at "fair value" - note, on my understanding fair value IS NOT market value plus CQT are entitled to 51% of the regional exploration with an option to purchase another 24% at "fair value."

So assume Gold Fields discovers for starters $4 billion dollar worth of resources ... they have 51% and give CQT some cash for the other billion dollars worth based on "fair value".

Gold Fields also purchases 50% of Mt. Carlton, say it is $2 billion worth, for "fair value".

Guess what ... CQT will only have an interest in a similar amount of resources as now assuming steady resource prices.

Now what should exploration success like that do for the CQT share price? If CQT's resource base stays the same?

Also let us not forget, if Gold Fields do $30 million worth of drilling that IS NOT all done on behalf of CQT. If 51%
equity automatically belongs to Gold Fields, it follows that $15 million of that drilling belongs to Gold Fields not CQT.

In my opinion this is a horrible deal for CQT.

I now see far better medium term value elsewhere.

That is not to say the CQT share price will not increase with more exploration success. Just what would have previously moved CQT 50 cents or more now might only move CQT 10c to 20c.

Even with good news coming from Mt. Carlton, now at the back of everyone's mind will be that Gold Fields will be able to purchase 50% of this project at "fair value."

Good luck all CQT shareholders.