with Silver trading at US$18.70 an ounce the overall economics have probably taken an additional step forward.
When I think about risk, first thing I want to see is a tier one resource so I know the fundamentals are pushing it forward then I want to know the probability of the government wanting to see the project go into production. Given that the government will see a mine producing VERY substantial cash flow for the governments coffers as well as regional stability, jobs, and an inducement to upgrade infrastructure I think the sovereign risk is substantially less than that projected by some.
Next I want to see the probability of plant funding etc. The Perilya US$150M MOU is a nice start, there will be other offers coming forward and it is a tier one resource. I have no doubt (I was there with them on the ground) that some large commodities traders find the project very appealing. How that all washes through will be the interesting bit. The MIC dropping in Q2 (calendar) followed by DFS will bring firmed up offers and it will be game on. We will all get to see what is actually on offer. IMO, it is too large a resource not to induce competition. That will leave management choice.
Some will want to wait to see the MIC before investing, I will (and have) jumped prior because I have done my own research and think the MIC is a very high probability of being granted.
MYL Price at posting:
5.0¢ Sentiment: Buy Disclosure: Held
