nst - a positively geared investment, page-12

"However good BB is I wouldn't gear to purchase NST until it had two operating mines... and even then I would only gear to a level where earnings could support paying a dividend with one mine being offline for up to 3 months."



To me the two versus one mine is only one of many variables in determining risk, as an analogy underwriters consider single prop aircraft to have similar risk to twin engined aircraft
"So, again, statistically you are as safe in a single-engine turboprop - at least one powered by Pratt & Whitney Canada's venerable PT6A engine, which dominates the category - as you are in a twin."
http://www.wilderness-air.com/faq_engine.html



"Over the past two years there have been water shortages and fire at the mine."

The response by BB to the fire needs to be commented on. He had I think 3 of 5 generators catch fire and out of action. However he had them back on line within about 5 days -to me he and crew passed the test when under pressure.


"At the time people didn't think BB would achieve much so the effect on the share price was somewhat muted even though cash generation and production levels were not too far off. At these levels if that same fire happenned today the share price could easily drop by 50%."

Thats conjecture and I will also theorise other large shareholders also have confidence in BBs abilities to replicate his previous capeability under pressure.

As a footnote the mine is also derisked in that they have identified areas to stope a short way down the decline if there was a cave in, at Paulsens.