jinchuan to retain allegiance stake, page-5

Galvanise,
If the new company wants to grow copper, why did they put $875M into nickel. If it is EQN, it is going to be a big purchase. In answering my question, maybe the reason was that it was a bargain at the time.

Once Avebury comes on line, how much will nickel be as a % of revenue? I have not worked it out, but with the combined ZFX/OXR entity, it could be quite small and a bit of a distraction. So why do it?

From your comments and thinking about it a little, I can have a guess at their strategy.

1) Learn the nickel business by starting small. (AGM)
2) Use the combined group's cash and expertise in copper to go after something a bit bigger. (EQN or Tamaya) (I am not a big fan of Cudeco.)
3) Come back to nickel later to get a greater spread of commodities so that there is a more balanced weighting of revenue per commodity. (This could be done by expanding the Avebury mine or purchasing another company)

Comments?

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