Home > Boards > US OTC > Delisted > Primero Mining Corp. (fka PPPMF)

My opinion:

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Lucullus   Sunday, 01/07/18 07:58:25 AM
Re: StockItOut post# 571
Post # of 652 
My opinion:

1. 70% chance they sell San Dimas over the next few weeks
2. 20% chance Primero will operate San Dimas in the future with a changed WPM- silver purchase agreement
3. 10% chance for bankruptcy

Position 1 and 2 will mean some value for shareholder!

As Primero and WPM both stated: San Dimas is a world class asset and there is a lot of healthy interest for the mine but the key factor realy is the bullshit streaming deal with WPM. The actual silver purchase agreement is a high burden for the mine operating company and it means a dispute with the mexican tax authorities, too. WPM stated: "Primero's problems are solvable. There are solutions on the table and it's up to Primero to choose!"

Last Quarter report Q3/2017 San Dimas produced 17.070 Ounces of gold and 1.05 million ounces of silver! That would be around 39 million USD even in a bad quarter if there wasn't the bullshit streaming deal. With the streaming deal they just received around 26 Million USD revenue! The actual streaming deal is one of the most expensive in the mining sector. Very bad for Primero!

So the key factor is WPM: San Dimas could be very very profitable again with a changed streaming deal! WPM is willing to change the deal but they want compensation and in my opinion they want a new mining company to operate San Dimas. Primero management made several realy bad decissions over the last years and WPM is not willing to reward Primero for their incompetence. Primero will be kicked out of the game for their incompetence but the question is: How much money will Primero receive for leaving the gamefield on their own feet or will WPM knock Primero down and Primero will be left dead on the field?

So my speculation: WPM will choose a way through the middle! We will get around 50% of book value, which is still much more than actual marketcap and the new operator of San Dimas will get a changed streaming deal!

BTW: I expect Q4 will be much better than Q3 and perhaps Primero payed almost the RCF back or refinanced the remaining RCF. That would bring them in a much better position in negotiations!

We will see in the very near future!

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