Been absent from the sites for awhile but I have been following metals prices closely and as it stands with copper around $2.20, zinc 70c, gold $950.
Plugging into my models the cash profit from operations will be around $500million for CY 2010. Recapitalisation at even 50c would be a better deal.
The only person it would be a bad deal for is Michelmore as he will be out on his arse.
You have to think who will be the winners from this deal? Certainly not OZL shareholders.
1 year of hedging at $2.20 for copper would produce close to $500million in cash flow. Coupled with a capital raising perhaps a 1 for 10 share purchase plan at 90c with attaching option at $1.50 for 2 years should be easily rolled out. That is about $800million in cash leaving the need to maybe make debt refinancing of $500million if that.
The clowns have no idea.
Let's see what the RBC deals means
OZL Price at posting:
$8.70 Sentiment: None Disclosure: Held
