Beauty contestThe Mongolians will act in what they think is their own best interest. Who will offer a better deal for developing the mine for the benefit of the Mongolian people?
The new Nuclear Law is managed by a new agency. Seems to me that Khanwill need to reapply for a new license once the suspension of the current license, ( issued by the previous agency) has expired.
So, is Khan a desirable partner? What have they achieved during theirstewardship of the asset? They've invested in power and some otherinfrastructure. They also did a bankable feasibility study. So they haven't been wasting time. Anything to add here?
From the Mongolian perspective, would they want Khan to develop this resource? They'd consider the track record of the management team and their financial resources. Based on Mr Quick's senior role at Cameco, they should at least be serious contenders.
Money is the obvious weak point. $20m will cover only a fraction of the estimated $333m to develop the mine. Where will the money come from? Khan needs a financial backer. Will this be Marubeni? Or perhaps Cameco? Without some show money, they have very little leverage when they reapply for a license with the new agency. But without a license, it will be pretty tough sell for Khan to raise +$300m to develop the mine. Chicken & egg. But if someone like Cameco bought out Khan and delisted the company they would have some negotiating clout. If Khan shows they have access to the money to develop a mine, then at least they've satisfied a necessary but not sufficient condition.
So, if you were Cameco, would you want to own this mine and would you want to keep the Khan management team in place? What are the economics like? As soon as I finish this post, I'm going to dig out that BFS and have another read. Because a takeout by a friendly player like Cameco looks like a sensible strategy for Khan.
There was a good quote from Mongolian official cited on Stockhouse recently -- paraphrased it was something like "we won't just take it, we'll pay for it" and "it will take more than 10,000 in the bank to own a mining license". If anyone has the original links, perhaps you could post them again?