RE:Looks like we can thank KAT for our problemsYou must be suffering from Stockholm Syndrome, Newbie. Gecamines mugged Glencore. They could have brought up these issues anytime over the last few years, and didn't. They waited until Glencore was fully invested in a sunk costs trap. It's now impossible for Glencore to walk away. Furthermore, all attempts by Glencore to resolve outstanding issues through discussion have been rebuffed by Gecamines.
There but for the grace of God, this could easily have been us. It may be best for the Company to ease off the DRC accelerator a bit, and limit this to one project at a time. All agreements are up in the air. We can't build a mine without a legally binding agreement, which is not subject to last minute alterations. It's like building a high rise without a permit. Let's start with Kakula (4 or 6 Mtpa) and take it from there. This is why, in my opinion, the Company may want to consider putting Kipushi on the back burner for now. Alternatively, they could also get a partner, or sell it outright. We need to remember where we are. The government has still not responded to industry proposals, and it's the 24th, deadline for the first round of discussions. Which as far as I can tell, are not even taking place. Instead international miners are talking to non-governmental Civil Society organizations.
Fortunately, we have Platreef. That can be accelerated, while this sorts itself out. As I've stated previously, the government may hesitate to stick it to a JV with a Chinese partner. They can't play off Western miner against Chinese. And since nothing has yet been built, there is nothing for Gecamines to steal.The government must come to an agreement if they want to receive royalties and taxes from this rich resource.
Kipushi is another story. I could easily see a scenario where US$337 million is spent on Capex, and then our litigious partner, Gecamines, takes us to court on some pretext or other. All this for an NPV8 of $500-600 million. It's not worth the grief. That doesn't mean it won't happen. But it wouldn't be the first project on my list.
We're not in trouble.They should keep it that way. Company liabilities are modest, and cash is strong. Only take on debt or dilution where the end game is clear. Getting there SAFELY is more important than getting there fast.