Post by
juanPeru on Oct 02, 2020 11:47am
Why I see the last corporate update as good news
With the risk of sounding as a contrarian, this last corporate update has been good news for me. I've been obviously eager about the second Medida Cautelar's issuance, and the reason why has always been that, without it, I saw the risk that the expiration of the 15 concessions could be advanced to the point that it became irreversible.
Now you may ask, if the authorities are favourable to the project and want it to go forward, why on earth would the publication of 9 claims as available was a real possibility? Well, because, once the expiration was conffirmed by the Mining Council, back in August 2019, a bureaucratic process started inside Ingemmet to advance the process to the point were somebody could take the expired concessions. After the appeals available failed (some of them were illegally dismissed by Ingemmet, but that's another story), and the Medida Cautelar wasn't issued for 15 of 32 concessions, then Ingemmet's officials were not only entitled to advance the expiration of these 15 concessions, they were in fact obligued by law to do so.
Then, what is the administrative process all about? It's a separate process coordinated directly with the higher authorities (Minister of Energy and Mines, President of Ingemmet) to find the legal ground on which the hurting decisions can be overturned. And one obvious way to do so is that Ingemmet's President issues a resolution self reversing the expiration resolution. But, if said self-reverse resolution is not adequately "motivated" with supporting reports from Ingemmet's legal department, Ingemmet's President could end up investigated and sanctioned for such a blatant favouritism.
Now let me give the reasons why I see the last corporate update as good news:
1. It shows that the Medida Cautelar is stronger than I expected. Even when expiration has been registered in the Public Registry, the claims have been published as available and the new interested parties have started the application process, the Medida Cautelar can be used to cancel the whole process. Previously I thought that, after being registered in the Public Registries, the expiration was irreversible.
2. In the case any interested party were able to successfully finish the application process (how much does it take... i'm doing some research about it) it would become a party to the ongoing judicial process. This is good, because if the party knew about the litigation when applying for the claims, then he holds resposibility for his lost investment in the very likely event that Macusani Yellowcake wins the judicial process. This show management has a plan for every adverse development and makes me more confident about PLU.
3. Only 9 of the 15 claims are currently at risk. In other words, over the last year management has been able to reduce the risk from 32 claims to 9 claims. I'm pretty sure that yesterday's publication in El Peruano have been submitted by Macusani's attorneys to judge Hermoza Castro, who will hopefully understand the urgency and give priority to the Medida Cautelar over other cases she is responsible for.
4. It confirms once more my view that the main focus of PLU is now the advancement of the two great projects it owns, the concessions issue being moved to the background.
So, like Covid-19, it seems to me this legal process is something we will have to learn to live with... at least until a cure/vaccine is found!