In response to your answer to Nennwert
Quote:
Canada and the US are democracies which means people and companies have certain freedoms which include being able to JV with a Chinese company.
This is true to a certain extent, but the Canadian Government does exercise its right to nix deals that it finds not to be of net benefit to Canada.
For example:
Last Monday, the trade journal Canadian Business reported that Canada has issued a "thumbs-down" verdict on a deal that calls for Malaysian state-run energy giant Petronas to pay $6 billion for Progress Energy Resources Corp. (PINK: PRQNF), a natural-gas producer that's based in Calgary.
Canadian Industry Minister Christian Paradis said Ottawa nixed the deal because the administration of Prime Minister Stephen Harper was "not satisfied that the proposed settlement is likely to be of net benefit to Canada," Canadian Business said.
So if you take Nio-Star that has a potential street value of approximately $100 billion in Niobium and REEs, the Chinese SOE gets 51% controlling interest for $32 million of which $20 million goes towards the bankable feasibility study and $12 million into Nio-Star's bank account for odds and ends. In other words, SRSR share holders only get 49% of the $12 million ($5,880,000) less the cost of the odds and ends. With a little creative accounting this could amount to $0.
Once the bankable feasibility study is successfully completed the SOE invests or borrows the additional millions required to build a mine and supporting infrastructure with Chinese engineers and everything needed imported from China. With the mine operational, Nio-Star hires several hundred locals at minimum wage to do the grunt work supervised by Chinese engineers.
With the mine successfully in operation, the unprocessed ore is then loaded onto freight cars and shipped to China for further processing by the SOE's processing plant into Niobium and REEs for the Chinese steel industry and other manufacturing industries. In return, the SOE's processing plant pays Nio-Star for the cost of mining the ore.
Ok I admit this is the worst possible scenario, but if this is the case then SRSR shareholders get 20% or 49% of $0. To be honest, I wouldn't put it past the Chinese to try and pull this stunt off.
The only way I can see this being of benefit to SRSR shareholders and Canada is that the processing of the ore is done on site into Niobium and other REE products and sold at street value back to the SOE's steel plant and other manufacturers.
This has to be part of the final deal worked out by Scot and the SOE. Otherwise, the SRSR shares won't be worth the paper they are print on.
If the Canadian government finds out that ~$100 billion of its strategic resources are being sold out to the Chinese for a mere $5.88 million, if that, and a few hundred low paying job, well I'll leave that to your imagination.
