Q: Can you comment on latest press release regarding the Valory option to purchase Summit Coal Inc. From Maxim. It looks like a fantastic deal and a great cash injection for the company. Also can you comment on AI power play opportunity and Alberta jurisdiction opportunities. It looks like a good risk/reward proposition. Maxim Management also looks solid. Am I missing anything.
5i Research Answer:
Valory will be paying $142 mln for the assets with net cash proceeds to Maxim of $8 mln. Maxim will then get a 3% royalty on raw coal volume produced by these Summit properties. It looks like a decent deal for MXG where they get some cash and an ongoing royalty. We think the name caters a bit to the AI power opportunity but they are focused within Alberta, so there might need to be some noticeable AI development in Alberta for this theme to really gain traction but overall the demand story here likely does not hurt.