GREY:CPMNF - Post by User
Comment by
Greenandgold.on Nov 21, 2011 12:32pm
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Post# 19254517
RE: RE: NEWS
RE: RE: NEWSYes, rail cost estimates are creeping towards reality. The 2010 PEA estimated rail costs of $87.8 M for 62 km of rail, now the estimate is $228 M. With the 30% contingency for cost overruns that's around $300 million, which is a little less than $5 million per km.
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Fire Lake North is going to be expensive but it's one of the few projects in Labrador Trough that can realistically come online in the near-term. Most of the other projects have millstones around their neck: ADI (900 km of rail to build), NML (800 km of pipeline), FEO (1000 km of electrical lines).
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What signs of progress to look for from CHM:
1) Hire an executive to deal with environmental permitting and governmental relations. The regulatory regime is multi-level, complex and takes a long time.
2) Register the project for environmental review. CHM's own PEA expects permitting to take 24 months from registration.
3) Sign an offtake/investment agreement with an Asian steelmaker (thereby scuttling the possibility of an Arcelor takeover). Arcelor's stubborn and patient--they never gave a fair deal to Consolidated Thompson for rail access or a buyout--and they are likely never going to give CHM a fair deal either.
4) Move out of exploration mode into mine-building mode. Hire more execs with iron ore experience.