Well it's def not a tier 1 mining jurisdiction I think we can agree on that.
As for apportioning risk, that is almost a matter for the individual investor as each has a different risk appetite & ergo normally adjusts the risk weighting accordingly.
I myself normally weight the IGV at around 5% of agreed value at the time, but admit to apportioning 10% in this case because of the shallow oxide nature of the host lithology. Easy access and easy extraction of the gold being key metrics.
The attraction of say a Cuba or the like over Oz is in the cheaper labor & operational costs plus the favorable tax treatment received. The risk most see is a sovereign one &/or that of US embargoes as well in Cuba's case.
To that I look only to the Nickel operation up the road at Moa who Sherritt have been mining with great vigor for many years without so much as a peep from the Gov wanting a bigger slice. In fact Sherritt carried the gov to the tune of $360m CAD for a long time before agreeing to a Cobalt swap deal which will see the debt paid down.
Sherritt plans to expand and extend the Life of the Moa Nickel-Cobalt Mine in Cuba
Sherritt International (TSX: S) is developing plans to expand production and extend the life of the Moa nickel-cobalt mine in Cuba. Moa is a joint venture between Sherritt (50%) and Cuban General Nickel (50%).The plan calls for a multi-stage approach and the work will include the expansion of a new slurry preparation plant and other circuits of the plant. The existing equipment at the refinery owned by Sherritt in Fort Saskatchewan, Alberta is part of the plan.Moa is a kind of laterite nickel deposit mined by open-pit mining. The ore is leached by pressurized acid at the site and then transported to a refinery in Canada. Production of finished nickel and cobalt and by-product ammonium sulfate fertilizer.Moa's latest 43-101resources were completed in 2019. At that time, the project had a measured tonnage of 111.9 million tons, with a nickel grade of 1.03% and a cobalt grade of 0.13%. The part shown is 46 million tons, with a nickel content of 0.94% and a cobalt content of 0.12%. The inferred resources are 32.6 million tons, the nickel grade is 0.89%, and the cobalt grade is 0.13%.
***** give some basic values but then place the caveat on things that each location will have different capex expenditure and operational costings so these need to be accounted for. The Scoping Study produced for La Demajaguar gives us an insight into probable mining costs per ton, including processing. Needless to say they are competitive and ergo provide for plenty of margin and cashflow.. Which is/was Brians plan all along..
There is always an element of sovereign risk, even here in Oz where Governments make policy changes on the run, so it can never be completely diminished so as to be zero.
Antilles are currently in dispute over this very scenario with the Dominican Republic as we know.
And that just got really interesting whereby in regards to the claim against the Sovereign state of the Dom Republic, where the absence of a counterclaim, were it indeed ever allowed, is telling.. IMO
THE ROLE OF COUNTERCLAIMS IN REBALANCING INVESTMENT LAW by Andrea K. Bjorklund
It might be said that, absent the ability to submit a counter claim, a state cannot win; the most it can hope to do is not to lose. Moreover, although states are not without any ability to seek redress even absent the ability to submit counterclaims, the advantages to investment arbitration that investors appreciate, such as the enforceability of arbitral awards, might appeal to states as well.
Notwithstanding the hurdles they face, states are becoming more aggressive in asserting counterclaims against investors, though their efforts have tended not to be successful. Yet there seems to be a growing interest in the phenomenon and given arbitral pronouncements that lead in varying directions, it is fair to say it is an unresolved issue. Of course even if a state cannot submit a counterclaim, allegations of improper behavior on the part of an investor might help a state defend itself from the investor’s claims of fair and equitable treatment violations by demonstrating that the state’s conduct was warranted because of the investor’s actions.
More controversial is whether a state can seek diminution of the damages awarded against it by arguing that they should be “set off” against damage caused by the investor. In both of those examples, however, the state can only seek to diminish the investor’s rights; it cannot seek affirmative relief from the investor. The ability to submit counter claims—most likely based on investor’s alleged non-compliance with host state’s domestic laws and regulations or its breach of an investment contract, where there was one—is thus ap
It is hard to see how one can say the investors actions were unwarranted if no claim against these is filed, at least to my way of thinking and therefore the state seeks to claw nothing back in the way of costs by not submitting. H8tey
AAU Price at posting:
3.9¢ Sentiment: Buy Disclosure: Held
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