RE: RE: Ivanplats off-topic here Hi, yup I'm here licking my wounds like the rest.
Looks to me like the last hurrah of the dismantled old Stalinists in the MPRP. The Dems look like thay might be able to go it alone in reforming Cabinet, depending on how the final allocation of contested (still!) seats go.
But look at the reality - they are desperate for cashflow and can't push their luck with TRQ. Why would any partner be willing to renegotiate the IA to less favourable terms at this stage, after making an investment of several billions in OT? Seems to me a lot of bluster intended to try and build political reputations as the real goal.
The Minister of Mines by appearing to be a hardliner for Mongolian interests might just be attempting to secure his tenure and franchise for when the cash starts flowing. I'll be interested to see what he has to say about his promise to resign in the coming months.
TRQ and ETG look to be changing hands at very sharp discounts these days, with a new mining plan promised in the last M&A for perhaps 1st quarter 2013, pending drilling results on the extension of the HNE, plus underground drilling at Hugo North also having recommenced. That's where I believe the upside lies, in upping the grades in the Hugo North lifts by adjusting the mining plan and trying to get some payback on the capex ASAP, and while Mongolia hasn't yet descended into complete anarchy.
Lots of reasons for Mongolians to be very pleased with what is coming for them, jobs, taxes, share of a massive project with huge upside, cashflow. All good stuff and it will have incredible spin-off and multiplier effects all through their economy if properly managed. That should spell the death of the MPRP old-school and broader support for the moderates.
The pessimism is rife everywhere, wouldn't you say? Western press re Eurogeddon, fiscal cliffs, stagflating economies, Chinese implosion, Mongolian pouting over cashflow (they seem to forget the long delays their own dithering caused), junior market risk having chased away main street investors and punters. All darkest before the dawn. Sit tight, be right, we have a world-beating asset in OT and income will prove value soon enough.
But ya gotta be able to remain solvent and holding your position longer than the market can remain stubbornly bearish on OT.
CG