RE:For Ratso07, Countrygent and the othersFirst of all, history may not always repeat, but it often rhymes. Expect a nasty war of words out of our sovereign hosts, it may dampen things at least one more time, but I’m betting this time around Rio Tinto and the Mongolian government have too much to lose on both sides of the table not to reach a mutually acceptable resolution. They may try and attack title to the mining licences, the validity of the IA, I haven’t forgotten the shiv job done on South Gobi, the Khan Resources crimes, Hotel Mongolia, the surprise windfall tax gambit ... and there were other shenanigans as well. Zero shame if it means clawing some immediate short term advantage. They don’t seem to value long term goodwill a whole lot. Which is crazy given the insane amount of mineral potential they have and their huge needs for social improvement spending and modernization. They need OT as a poster child for a winning foreign investment in Mongolia. The culture is not yet near generally accepted international business standards. But maybe some nation-builders may be among this newer cadre of politicians who take a longer view and have greater vision. Heaven only knows how much the global economy needs new sources of minerals in the coming decades.
On SSL, my take is Nolan and Co would salivate at a big chunk of ETG’s carried interests. Their problem is managing their core shareholder expectations of a diversified gold streamer with a politically sound portfolio. Their core brand is safe, leverage to gold. Not potential downstream income from carzyland. So they have settled so far for building a quick trade on the equity and a place at the table. There was a lot of negative rhubarbing about the initial big buy-in, so much so Angolan tuck his neck out proving it might be the best deal ever done in the space. Not yet it ain’t.
It’s still a very large capital nut for SSL to crack to take a majority position, given their market cap, although it makes so much sense from an efficiency viewpoint for them to manage the ETG streams. ETG has become an expensive, inefficient albatross management vehicle, IF you saw a big PP into SSL from a major backer that might change the complexion completely, but as things stand I don’t believe they can stick their necks out too far in Mongolia. The numbers are too large for a single mine position given the overall size and need for diversification of their portfolio?
I’m personally very optimistic lots of eyes covet ETG’s assets, but let’s not kid ourselves the unanswered fundamental question about IA treatment for ETG is a tough one. Most obvious and politically acceptable solution is consolidation into the TRQ/Rio camp, even though OTLLC might be the structural landing zone. The Mongolians have no leverage to buy, they might divest in part, only time will tell where they want to go.
interesting days. Yet another election draws near.
Just splendid trading over the past months though. I believe most of the more volatile trades are closed now and the float has hardened up.
But after 17 years of twists and turns, I can’t say anything is certain until it happens. Craziest speculation of my life, bar none, and there have been some pretty wild child mining plays through the years.
I’m dug in and stubborn as all get out on this one. I didn’t fall in love with it, I think I’ve fallen into vendetta mode. Lol.
cg