Ann: Trading Halt, page-26

We are not lending to the Ecuadorian government, we are a junior lender into a mining asset in Ecuador.

The Country Risk posed by the sovereign government is a MATERIAL risk factor that needs to be accounted for in return economics or mitigated through PRI (Political Risk Insurance) or other forms of Credit Enhancement. It is a very rare occurrence for the credit quality of an entity in a country to be above that of the sovereign. See here for further details -> https://www.standardandpoors.com/ja_JP/delegate/getPDF;jsessionid=F64653FB819B98411DB2FEFF6F7D92A2?articleId=1493557&type=COMMENTS&subType=CRITERIA

Let me pose the question to you this way. What do you think the risk of any of the following occurring:
- Ecuador Nationalising a portion of the gold mines in the country?
- Ecuador Imposing new or increased tax on the production or export of gold from the country?
- Ecuador mandating gold produced in the country must be sold at a Government determined price?

None of these are zero probability events and there is a risk associated with them and projects in these jurisdictions where the sovereign is experiencing a level of distress. I personally view the second as a material risk that I would demand to be remunerated for, which is why I am absolutely livid at management and the boards decision on the purchase. Blackstone have done beautifully out of this and played them for absolute suckers IMHO.

My RoE expectation is 15%. If we're talking about a de-risked (developed and producing) asset in a Tier 1 Jurisdiction (i.e. AU, CA, US), I'll accept 12%. If it's an explorer or in development the risk premium (RoE expectation) goes up, materially.