A little snippet from yesterday’s weekly…
Nevada Copper (NCU.to): And on the subject of pig-awful balance sheets, NCU filed its 1q17 financials after the bell on Friday evening. Here’s the balance sheet, with scribbles:
You don’t need very many this time either, just a circle around that long-term debt pile is enough. If it had a viable project it might be a different story, then again if it were viable it wouldn’t be at project stage today. Instead, NCU is merely a vehicle used to drain cash slowly from Pala to Red Kite.
As for that “Fantasy Island” comment, it’s useful to remember that despite using a copper price of U$3.00/lb for U/G and U$3.15/lb for open pit in its feasibility study (and those only get you yo a mediocre 15.6% IRR) and despite copper not being at those price for many years, NCU hasn’t bothered to write down or impair its fixed asset value by a single red cent. That U$235m asset price may as well be U$235 Billion as neither number bears any relation to reality. At least CMMC has some cash flow. “Optionality on copper” stops being “Optionality on copper” when the project never has a chance of being built.