RE: 2%uncapped no buy out NSR21 Apr 2020 20:41
Few comments on MTR.
1. Investors Chronicle had MTR as a share to watch in 2020 as share price didn’t and still doesn’t reflect assets of the business. For that reason alone MTR is a good investment. You then have for free the opportunity associated with the drilling programmes etc associated with MTRs other investments.
2. A4 was known about when SFR bought MOD. The smelter royalty MTR negotiated with SFR was done whilst knowing about the potential of A4. MOD needed to sell as finances desperate. MTR held the ace card during the negotiations as MTR weren’t desperate to sell their stake in MOD. SFR had depleting copper assets and needed to buy assets. MTR therefore were able to negotiate the 2% smelter royalties.
3. SFR have the funds to develop T3, T4 etc. This makes MTR’s investment in SFR much more valuable.
4. SFR success will obviously be good for MTR. Are investors going to start investing in MTR rather than SFR as they then have exposure to all MTRs other investments as well as the SFR ? For example their investment in adjacent tenements.
5. The CEO of MTR recently bought on market shares in MTR. Clearly he believes 2020 is the year for MTR. The recent Proactive Investors interview gives a good indication as to why.
6. SFR could put in an offer for MTR’s 2% NSR. During the negotiations for MOD, SFR didn’t agree a financial settlement with MTR, they agreed the 2% NSR. If they wouldn’t or couldn’t agree an alternative with MTR, why could they now? The 2% NSR becomes more valuable with every discovery by SFR. Are MTR holding onto the NSR and not interested in selling? With significant funds and dividends from SFR that are sufficient to cover overheads why would they sell now? You would wait until SFR stop drilling and discovering. At that point you can maximise the value of your NSR asset.
MTR have the funds, the investments, an astute BOD and a revenue. Perfect at a time when most companies in the sector are on their knees. MTR can pick and choose the best investments at bargain prices. I believe MTR are going to deliver for investors. The building blocks are all in place it is now for investors a waiting game.