"What needs to be explained exactly about the exploit ore part? Seems pretty straightforward: the company needs to exploit ore by May 2020. Veovaca can be exploited prior to May 2020."
To be clear:
- Veovaca is covered by both exploration and exploitation permits
- Rupice is only covered by an exploration permit
3.1.4: The Exploration Concession agreement requires Eastern Mining to commence the exploitation of ore before 25 May 2020. In the event that Eastern Mining fails to begin exploitation before 25 May 2020 the Government of Zenica-Doboj Canton can terminate the Exploration Concession.
In the event the Company wishes to commence exploitation operations it must obtain the consent of all owners of the land subject to the Exploration Concession agreement through a land expropriation process involving the Government of Zenica-Doboj Canton. This process can be lengthy and costly.
Therefore, per 3.1.4 of the prospectus, the Rupice concession is currently at risk of being terminated if it is not in production within ~18 months. This is an incredibly short time-frame/deadline to be in production, and why I stated that it was extremely unlikely for a takeover to occur when such an onerous deadline is in place.
SFR's Degrussa deposit is considered the gold standard for going from exploration to production, and took them approximately 3 years and they were able to start with DSO ore, whereas the average is usually 7+ years. So even accounting for some infrastructure being in place, to achieve this in 18 months will be incredibly challenging considering they will likely require Scoping/PFS/DFS (these studies themselves usually are more than 2 years), project finance, construction of a processing facility, securing necessary land and permits and off-take agreements.
I suggest you read the below post from Mineralised who is a 'heart' and one of the more knowledgeable posters on this forum and a holder of ADT who sums it up well: "Ultimately the only way to sit secure in a jurisdiction like this is bringing onboard a private entity with decades of prior success in Bosnia, ideally mining but even a local bank of size who makes regular political contributions would do the trick.
I wouldn’t be comfortable until that point and the discomfort grows in proportion to the significance of the discovery.
People think just because the government is white and the great white people are civilised they can expect fair treatment, good luck with that attitude, governments are just legalised mafia, everywhere, mafia double dip and wheel and deal all the time."
So, what Mineralised is alluding to is that as the value and status of Rupice grows, the bigger the risk that the local authorities will play hard-ball in granting the necessary permits to a foreign company.
I want you to explain to me why Lundin is so intent on buying Nevsun, which has projects in Serbia, which is BiH's neighbour
I do not sit on the Board of the Lundin so am not privy to their rationale regarding the proposed takeover. As several posters were posting about takeover possibility, all I mentioned was that the geopolitical risks would need be taken into account prior to any offer, as well as the mining license risk noted above.
Also interesting to note I couldn't find any reference to the May 2020 deadline in the above Corporate Presentation. I would have thought that risk this should have at least been placed somewhere in the document to be fair.
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