Ahhhh,someone with something constructive to say.Thanks duff.All factors that any investor should do some research on and take into consideration before investing in AVL.
If one takes a closer look at the barge factor one would have to say this without doubt the safest way for the concentrate to make its way to the smelter.Sure,there is the possibility the barge may have problems,but I doubt both drives would go similtaneously.I'm pretty sure AVL will have a spare standing by if this eventuates,if they havnt already.They will certainly be able to afford one once the concentrate starts moving.AVL has also stated previously that Zambias road network is more than acceptable for the trucking of the concentrate.
Political instability is a factor with any African country.For that matter ANY country.Even Australia has crippling strikes that bring mining companies to a halt.The DRC is no picnic when it comes to political instability.One would have to be a fool not to admit this.
However,as I have said previously,the current political situation is more than acceptable for AVL to commit to the project.Rand Merchant Bank has also been prepared to sign over the mobilisation/financing facility of $5.5 million.The DRC/Kabila government recently signed an agreement at the Sun city talks with the MLC rebels(one of the 2 main beligerants) which involves both parties in the new to be government,simplifying the political situation considerably.Kabila is also currently in talks with Rwanda to create an exclusion zone for rebels between the 2 countries.So there are efforts from all major parties in the conflict to arrive at a peaceful solution.From recent news reports this effort appears to be gathering momentum.
To add to this the World Bank President,John Wolfensohn is currently visiting the 3 Central African countries of DRC,Rwanda and Tanzania.He will also participate in a meeting with financial ministers from Angola,Burundi,DRC,Guinea,Rep of Congo,Mozambique,Rwanda,Sierra Leone,Uganda and Tanzania,in Tanzania.
The World Bank has also just committed $450 mill from the IDA fund to the DRC.
So politically the DRC is making large strides towards peace.
The likelyhood of an overthrow is also remote.An overthrow of Kabila may have come from previous corrupt politicians that supported his fathers regime.But these individuals have all been replaced by Kabila as he was wise enough to percieve that threat.The achieving of total peace will not be a simple process,as evidenced by the RCD rebels reluctance to join the new arrangement between the MLC and Kabila Governments in an interrim Government.But the situation is much more promising than previously.
Dikulushi also has a geographical advantage in that it is cut from the problems further to the north by a rugged mountain range that is all but impassable.
Yes there is a higher level of risk with AVL,but that risk appears to be diminishing almost daily now.
Yes there are plays with lower risk.but this is the speculative end of the market.
The market knows what AVL has in Dikulushi.There are many other specs that are financially rated higher than AVL even though they are nowhere near a financial return.AVL has a quality project in Dikulushi and it is approaching production/financial return quickly.
The decision is the investors.One has to consider all the above factors in this thread,and more.
