Sovereign Risk

Posted similar on the EPM thread, so would like to get this going here.

This is a topic that should interest all forum members. Just to be clear, this is the risk that changing government regulation by whim or political manouvering creates for a stock. It typically means downside.

Sovereign risk is a significant issue in Greenland. The lobbying of NGOs, the climate agenda, change in Greenland society and so on is creating a situation where mining projects will be critically assessed by financiers and the flow of capital might well be constrained.

How will this bode for GGG ?

Well, it has already affected the development program and the share price. So it is real. There is risk that the necessary finance to make this mine happen will not be there because of the wider sovereign risk. UNLESS the government finds some way to reach a compromise.

There are sound of compromise coming from both politicians and technocrats. They understand (or have been made to understand) the risk that the silly populism has created for them (but also real concern over environmental issues). IA is partly to blame but they appear to be shifting away from "nothing in Kvanefjeld" to "we are going to stop Uranium mining" (has anyone but me noticed this?). Which is all well, because GGG will not mine Ur as an economic resource. It will be put back where it came from (is it just me, but if I were them I'd love for the Ur to be shipped out of the country, it is just polluting it, but that's me lol).

That is what sovereign risk means for GGG. Make no mistake, these are high stakes for this government as well as Denmark.

Sovereign risk also = legal litigation. Not good for anyone but the lawyers superannuation funds.

Compromise is at hand because the adults in the room will want to ensure that this sovereign risk is not something that will cripple their economy for a decade.

Debate encouraged, misinformation not (but expected in this thread) You know, because I am the voice of reason in a sea of misinformation.