Jovest, answers to your questions.Hi Jovest,
Firstly sorry for my late reply. Nowadays, I don’t post much because I don’t really have the time and there’s nothing much I can add besides what is already known and nothing significant is happening yet. However, I am still here reading this BB everyday as there are some very useful information being posted here as most posters here are decent genuine investors of Stans who do great dd and share unselfishly (like Kettl, Opencurtain, Greenbox, Andech, HYL…etc)…
Before I continue, a short word for Colima…
Hi Colima, I’m sorry I cannot define what they mean by a few months (whether it means 2 or 12, I am not in a position to decipher that). However, I did say that this is going to be a long term play and those with short term trading hopes could be disappointed). I suspect that seeing full value here could take the average 7 years that one famous investment guru says it normally takes an investment of his to see full value…..and that would mean that we are half way there (since mid 2010).
Jovest, now back to your questions:
1. Nationalization ….why a noose ?.....If they were to nationalize, this would turn them into a Pariah state. No foreign investor would touch them with a 10 ft. long pole thereafter and they can’t survive without these investments……an example of a country that used nationalization as a means to rob assets is Zimbabwe and looked what happened to it thereafter.
If they really thought nationalization was an option ( despite all their rhetoric), they would have done it with Kumtor already. An operating lucrative gold mine already to which the scientific expertise behind it isn’t hard to acquire .
What makes it even more less motivating for the govt. (if its actually the entire govt behind this) is that when it comes to Stans, if they were to expropriate or nationalize the mine, they would not be able to operate it for at least another 10 years ! This is because firstly even if you had the expertise in REE, every mine would have different metallurgy and deciphering these would take years.
The reason Stans was able to do it in 4 years is because the mine had already operated before with already proven metallurgy which the people from VNIIHT were familiar and involved with before.
If they were to nationalize/expropriate this, they would not have access to this expertise and thus would need to do the metallurgy from scratch and that could take about 10 years (that too provided they had real high level expertise in the field).
2. What Legal action could stans take to recapture the mine ?
Firstly, even though they’ve been able to get certain ridiculous judgements, it has on everytime, saved the last one, been overturned by the City Court . This shows that they (the crooks initiating all these) do not really have a strong control of the judiciary and there is a some sort of credible independence there. That’s why I believe that they were just trying to delay stans until they ran out of money and fold up (like what sometimes happens to other junior resource companies), hence the endless delays in having a court date.
However, with Stans’ Russian plan it means stans is not going away. That means Stans will continue to fight for their rights. This means that Stans may not be able to operate their mine, but nobody else will be able to get it either (save nationalization, which is a no –no). Example of this is the latest Kyrg court decision will be appealed by Stans to the Supreme Court and I don’t think they (the crooks) will be able to get the Supreme court to deliver a crooked judgement.
As the article that Andech just posted says, Kutissay mine has become a barometer for foreign investors and the longer this drags on it will practically cost them the same effect as nationalization on foreign investors.
If Stans’ Russian plans works out, things will turn around 180%...Stans will be able to let it drag on but the Kyrg govt would not be able to afford it.
We need to be clear that its only the license for the operating of the mine that we are having a problem with. The plant belongs to us and they can’t stop us operating the plant….and if they tried, we could just pack it up and ship it somewhere more friendly.
With regards to the arb award, it’s not based on the lifetime earning’s of the mine but on a discounted to cash flow of the life of the mine……I don’t know what basis they used for the discount calculation but what’s for sure is they are based on earnings of the raw oxides only….
If I’m not mistaken, Kettl did some calculations a few years back and said they would do net earnings of $30 to $40.0 Million a year on REO of 500 tons per year and Mackay kind of said the same thing later but also added that they were targeting to increase to 1500 tons of REO per year.
However, they later developed the ability to produce the entire end product metal instead which I believe could push their earnings up 10 times ! as the end product metal was a whole different level of ball game as opposed to just the oxides.
Thus, I believe Stans would still have ways to take legal action for all possible earnings loss if it came down to that…..
Now, for a short comment on another poster.
He posted : If he did his DD he would have sold at 3.0
Obviously this poster does not know the difference between DD and watching patterns !!
For those of us who did our DD, why would we want to sell even at 3.0 at that time when the company had not even started operating yet and based on our DD we knew the company had the potential to be worth far more than that many times over ??
These one track minded type of traders would never know the difference between a trader and an Investor which really amazes me as how could anyone who invests or trades in the market never have heard of Warren Buffet for if they would, shouldn’t they know that he practically never ever sells and has proven that to be the most successful formula to which no trader could ever beat ?
As for me, if this Russian things pans out, I am going to be holding my shares for a few more years to come and in one sense the Kyrg shenanigans would have proven a blessing in disguise as I would not have been able to accumulate the amount of shares I own now otherwise.
Once again, this is JMHO. Please do your own DD.
Cheers all including Bago.
Simon