Q: Hi Peter..,may I have your thoughts FNM and their relationship with AEM? It looks like AEM is going to purchase 13% of FNM with the money going to in turn fund the purchase of some land and this year’s development work. I suppose $8 million is not a huge sum for AEM. Would you characterize FNM as your proverbial lottery ticket or is it a small step better?
Any comments you have would be appreciated. I don’t own the stock as, I suppose, I don’t have the same level of confidence that AEM appears to have.
Jim
Any comments you have would be appreciated. I don’t own the stock as, I suppose, I don’t have the same level of confidence that AEM appears to have.
Jim
5i Research Answer:
$8M is certainly not material to AEM, and it is very common for major producers to invest in juniors in order to get a seat at the table for any future discoveries/developments. FNM looks a bit better than most $67M developing companies with no revenue/profits. It owns 100% of its Finland deposit and has significant Swedish assets. Insiders own 15%. It still needs to drill 'good' holes and develop its resources, but that is true of all juniors. The AEM backing adds legitimacy to its assets, but it should still be considered 'lottery like'.