I recall reading though experts who have declared that single-mine producers, with relatively low production and relatively short LOM are inherently higher risk. I dont know enough about mining economics to understand what sits behind this but a moment's reflection makes it reasonable to conclude that limited ability to blend grades, smooth out cashflows or cope with unexpected downtime does impact the risk profile.
My response to that is that I have as much respect for ALK which holds 10% of CAI as I do for CAI itself. They are unashamedly seeking to be a multi-mine producer. We know that they have a joint technical committee with CAI. While those things of themselves dont de-risk the CAI proposition they do provide a degree of comfort as to what might happen if single-mine economics or a single event affected CAI viability.
I also by complete accident (because I didnt then know what I was doing) rode GOR the last part of the journey to production. If the market really is impatient to the extent it appears (i.e cant be bothered investing in anticipation of next year) then that surely is the closest thing to a sure bet we more patient folks are ever going to see.
I do see mining in a category all of its own in that regard. Most times patience is required for a company to grow and flourish when it has already worked out what it wants to do and is already doing it. In mining start-ups there is project risk/reward, as much as market risk/reward. That to my mind amplifies the risk but also the return which is why its fun to do....
In summary like you I think this is a really good place to make an investment and I remain committed....
CAI Price at posting:
40.5¢ Sentiment: Buy Disclosure: Held
(20min delay)