CFE is not a mining company. They buy distressed and undervalued assets. Most need some further devlopment to take them to a JORCed, pre-feasability stage, some don't. The assets are then sold for many times the purchase price. For example, the Lady Annie copper mine was part of CFE acquiring Copperco, which went under during the GFC. It was sold for 3-4 times the purchase price. They've just taken over DMM for peanuts. This will be a multibagger+++. To use your McDonalds analogy, it's like buying a store for $1m and selling it for $5-10m without ever making a hamburger. Evidence of success of the strategy is the fact that the cash, receivables, listed and unlisted assets continues to balloon. It's hard to say how the CHM deal will pan out, but CFE's past performance is encouraging. Either way it's only a tiddler for them. Their Marampa iron ore project will be JORCed and up for tender at the end of September. Asking price - $600m. One of many, many. If the markets continue to get hammered, CFE just scoop up more companies on their knees.
Peter
Disclosure: Hold CFE. No brainer.
CHM Price at posting:
9.2¢ Sentiment: None Disclosure: Not Held
