We stalked this trade a long, long time. See our 9 July analysis of the company here: Crystal Peak Minerals — Independent Economic Analysis
We got in at a considerably better average price over the last month than we ever imagined (U.S. $0.0577). But why did shares get so cheap?
I don’t have an answer. Insiders haven’t abandoned the stock. Director William Basse bought a few shares last week. The Cynosure Group may be shedding shares and EMR, which owns a > 60% stake, may be shedding shares, too. Who knows?
The Department of the Interior has authorized construction at Sevier-Playa, a huge de-risking milestone, and one of two factors for which we were waiting as would-be investors. The second factor was price: we weren’t going to pay a lot for the greenfield Project in the present SOP climate.
Price may also be anticipating the impact of debt and equity financing, an announcement about which could come by Q2 ’20, with construction set to commence in Q2 ’20, as well. Debt will be approximately 60% of project finance. I’d like to see an off-take account for up to an additional 15-20%, with the remainder achieved with equity at a later date.
