Ann: Newcrest to acquire potential Tier 1 orebody in Canada, page-11

If you listen to the webcast on this project, its clear to me that they will need to spend a lot of money and do a lot of work to get a payback on their investment, and that it will not come quickly. It appears that Red Chris is not generating much if any operating profits from some comments made by analysts on the webcast.

It is a longer term project and NCM are saying trust us, we have found a great undervalued project and in time it will provide great long term returns like Cadia after we apply the NCM magic formula.

NCM had net debt of around USD1billion at end 2018, so the USD800m payment for 70% of this project will just add a heap more, plus all the other projects that require capital in the near term.

I was surprised the share price rose yesterday. Unless the USD POG was going to head steadily higher, yesterday's announcement seemed to me an opportunity to exit.

I think analysts have started sending out reports to their clients and perhaps they are not all that positive for now.

NCM is one to keep an eye on, and was a buy before this announcement (so long as the USD POG stayed steady) for its continued net cashflow and rapid reduction of its debt.

Would be interesting to read what the broker analysts have said about this proposed deal.

loki