We all know that Teck is going to have a very hard time selling this to its shareholders at a fair price. So it's looking much more like an offer should it come will have to be declined. I am leaning towards Teck having to make a best first offer instead of trying a lower one then upping it. The lower our sp goes the harder the sell at a reasonable price. In theory the sp should be going up but the BFS suggest the production decision will be negative. Even though we know that's unlikely the market doesn't know it. So the sp should hold or slide more.

The market sees it as a failed BFS. Right or wrong that's how it is seen. Our sp suggests 49% so it's a go and 51% so nay. So we could slide into the 80 cent range. Perhaps lower. Let's say it hits 70 cents. Just an arbitrary number of course. Let's say we want $5. How does Teck sell that one?

You saw on my blog what just 1/2 the deposit does for us under the ROV. Put all the plusses in and it's starts to look pretty damn good. But, at 70 cents we look a tad tarded. Teck has to sell that without taking a beating in the markets again. Again, not an easy sell.

The real share holder value is in obtaining a greater % of the deposit. Teck is going to have to come up to our expectations and/or fair market value. We are not selling this by the pound. That's just not going to happen. Currently, 6 cents is the average globally. Yes, there's a few ones that stand out. But 10 cents on a pound is not enough because 1/2 the deposit is not accounted for. Again another conundrum.

We want our full price and/or a greater %. We will find the real value in the production decision with or without Teck. I think we'd get a better deal without them because it would mean a greater % of the deposit. All we have to do is say no to an offer. Our only issue is that Teck would be nuts to not take the full 75% regardless of what we want. So for me the real question is how to max the royalty and the remaining %. Part of this would be done by attaching the lands we own as part of any deal. All or nothing sort of deal.

Next we ask, is our portion if refused to Teck, going to scuttle Teck? In one article the author suggest this is so. We are hogging a big fat royalty off the top and 25% of the deposit's returns. In addition, the extra land does have future deposits and I have reason to think it has at least 1 good potential on it. I'm not going to elaborate there. So just considering what's public, will our portion under the 5% ROV scuttle the deal? The answer is, almost. Once you give that due consideration it becomes apparent that Teck is going to have a very hard time selling this.

The B/E point using $2.85 copper is somewhere around $3.27. I doubt we'll take that. Good luck to Teck. They may argue 5 cents up is good but I think we will argue that a couple of bucks up is more like it.