I think it's a area of concern which has FFX at an unfeasibly large discount . But to my thinking it is overinflated in the minds of the typical Aus investor.
I've done extensive research on the security situation, an area I have a professional background in. The region the two projects are in is one of the most settled in all Africa. The tribal situation is settled and peaceful. No issues.
Mali's problems in security, begin and largely end in the North - where a smaller and completely different ethnic group and culture resides. That's where you get Islamic extremist incidents. There are fewer, though violent incidents in the centre region along the border with Burkino Faso relating to tribal issues and land - down to "your dad stole my grandfather's field". There is no reason for those to spread to the regions of FFX's project as the tribes are different with no overlap.
If you want to keep an eye on the situation there are some very handy, accurate and timely twitter accounts to follow that specialise in security, but that said...
The Morilla gold mine has been chugging along incident free for 20 plus years and there has never been a major or even medium grade security incident to my knowledge at ANY Mali mine. Even if there were to be one in the future, I would put it in the category of isolated incident that would be dealt with quickly and as it would be in any Western country. The mines are central to the economy and the government treats them as such.
As for national politics, they just had a "coup" - not a single person injured, not a single day lost at any mine around the country when it happened. And the deposed figures are all healthy and alive (and free from memory). Everything seems to be on track to elect a more popular government early next year. The central figure in national politics who is likely to shape the next gov is an Islamic scholar with broad support in both the North and central areas. Good news IMHO.
As an example of my comfort in FFX I have sovereign risk assessed in Mali as less a threat to ongoing production than cyclones in the Pilgangoora region. My only bugbear with Mali is the b'tards are much better at taxing their mining industry than Australia.It's Aus that is the tinpot country now as the multinationals here extract billions without paying a cent in taxes or royalties on gas etc. (But seriously, happy for Mali to get their share, we are still going to do extremely well).
Obviously no area is totally risk free, but the risk/reward situation with FFX is compelling IMO.
FFX Price at posting:
60.5¢ Sentiment: Buy Disclosure: Held
