I feel this topic is worthy of a new thread so I've decided to copy and paste my post from earlier today that was under a different thread and fear it may have been lost due to there not being much of a response for such an important topic, with the exception of @Mitchum and @wsc0016. I've also decided to copy and paste wsc0016 reply to this thread, below, to keep it all under the same thread. A little messy I know, but feel the correction would be prudent and a worthwhile exercise. I'll be more specific about risk factors in my next post but let's see how much meaningful information we can muster on this subject between now and monday and then I'll be taking it up with the MD on Monday. Naturally, the best of luck for maximising returns to all investors, however, results from due diligence and establishing comfort for both the upside AND downside could mean the difference between a meaningful investment, or just fun money investing or nothing at all. Each to their own level of risk aversion.
"Hi Mitchum and other posters. It's an interesting story you have here. The content of Ventnor posts in recent days and weeks certainly arouse a curious mind and it's very clear that the 'demand' checkbox appears to be checked, however discussion of risk factors appears absent. Is it because it has already been discussed and resolved with consensus in earlier posts?
I invite and would appreciate any comments on the following
"Risk Factors"
, which were credibly and extensively highlighted in the recent prospectus. In particular:
4.1 "Specific Risks Associated with the Company"
(a) Muchea Tenement Risk
(b) Granting of licenses, permits etc
(g) Environmental Risks
(n) Increasing logistics costs for rail, port and shipping
(o) Maintaining effective quality control at the mining and processing operation
(q) Extreme seasonal weather conditions
(r) Insurance risks
(y) Native title
4.2 "General Risks"
(c) Risk of litigation, claims and disputes
Additionally, does anyone have any idea of the proximity of the nearest residential communities from Arrowsmith or Muchea?
Comments appreciated. The idea here is to gain the most amount of informed HC comments and to then progress a discussion with the MD.
Thanks in advance."
wsc0016 replied,
"In response to Dianna, here is my view. The main risk mentioned in the prospectus which differs to any other exploration / mining companies is the Muchea Tenement Risk. I think VRX said as much as they could in the prospectus. If they had received any formal legal challenge VRX would have to disclose this to the market. On the basis that the Tranche 2 Shares have now been issued to Australian Silica I hoping nothing has come of it to date.
4.1 b) Licenses and Permits. So far appears work permissions have gone through reasonably well.
4.1 g) Environmental. The Environmental Survey is due to be completed in the next quarter and hence more will be disclosed about any significant risks.
4.1 n) Logistics costs. Proximity to rail for both developments is a plus. Some recent posters questioned the condition of the rail. But if VRX can show there is good volume offtakes and a long mine life then the rail companies likely would undertake any restoration works and maybe even fund any rail sidings required. They would recover the costs in their rates.
4.1 o) QA/QC for the mining operation. Getting a bit ahead of ourselves unfortunately. With the recent grading test work and further work to be performed VRX will know more about the target market. Chasing the high $ grades will require greater processing and QA. Guess we should know more when some mine /plant engineering is performed.
4.1 q) Extreme seasonal weather conditions. Bound to be some risk. In addition on some of the previous threads there has been some debate on drying requirements which may be required to meet buyers demands. (OzBattler knows more about this than others posting here. Unfortunately I'm Oil Trash)
4.1 r) Insurance. You can bet all Asian offtake buyers will want everything CIF to their port.
4.1 y) Native Title .......... Pass.
Residential proximity
Arrowsmith looks middle of nowhere (anyone know more?)
Muchea about 10km to nearest township."
(20min delay)