Given the cessation of drilling and the implication that a takeover offer is being prepared, I listened once again to Elmer’s comments at the AGM.
One shareholder asked whether we would see the BFS. Elmer’s response was that if Teck made a reasonable offer, then that offer would be presented to the shareholders. He went on to say that the BFS would then become irrelevant and it would not make sense to spend more money on it. Elmer also said the company would continue to pursue the BFS if Teck selects an option that leaves CUU with some remaining percentage. In such a situation, CUU would go on to complete the BFS so that they could use it to sell CUU’s interest to some other party that is more adept at mining (CUU is an exploration company).
The cessation of drilling may also mean a cessation of BFS. Why spend more money if a takeover offer is eminent?
We may never get to see the BFS if Teck (or some other party) has a reasonable offer that will go to shareholders. I have some concerns with that. If we do not see the BFS when we are considering Teck’s offer, how do we know whether the offer is reasonable?
If an offer is presented to shareholders, usual procedure is to hire some financial firm to present a fair value opinion. Presumably, Bank of Montreal Capital Markets is poised to do this. I would prefer, however, to also have the BFS.
Given that the BFS is very close to completion, I would hope that it is released irrespective of what Teck does. Any suppression of it would be a disservice to shareholders – we have essentially paid for it and we have waited a long time for it. As well, any suppression would raise suspicions as to whether or not Teck is offering fair value. Most certainly, Teck would eventually use it for financing.
But then again, maybe it does not matter. There is one shareholder who has major influence on the any takeover price.
PS – Several have alluded to a CCU2. From the AGM tape, it was clear that Elmer wants to exit the Schaft Creek area and move on to the Arizona properties to determine whether there is a sizeable deposit there. He wants to see if they can repeat what has been done at Schaft Creek.
