Originally posted by bm3121
If SOLG is so far away from production, and a unversally agreed undersupply of long term Cu is looming and already of public concern to the majors, (due to genuine structural changes) wouldn't the short term macro-economic conditions be of less importance?
Also, isn't the beauty of having a Cu/Au deposit that you are naturally hedged against the macro-economic cycle (ie gold defensive, and copper aggressive)?
You could further add that DGR is also hedged against a recession by way of being listed in AUD (and the fact their SOLG holding is valued far below carrying value).
If your theory is correct, why would Newcrest & now BHP be investing heavily in SOLG & Ecudor? Why not just wait? Doesn't the recent activity suggest to you that BHP are positioning themselves prior to the updated MRE?
Also, I thought one of the key benefits of Cascabel was it's proximity to Hydro power, sealed rds and deep water ports? Doesn't the minister's recent comments that the forecast explosion in growth of mining's contribution to Ecudor's GDP hearten you? Isn't it likely this growth in large part would be generated by large scale infrastructure spending?
Furthermore, aren't these comments reassuring to all miners in Ecuador? Let's remember that the value of SOLG has been generated by having 1st mover advantage. A decade ago Ecudor was off limits to the majors, and even until very recent times, investors were sweating on the outcome of elections. Those risks have abated, and so, NM and (us small holders) are already laughing our way to the bank.
You think NM is going to sit back and chew on his wage, waiting for the next dip? He may be many things, but he doesn't strike me as that type. I have very little doubt he wants to win above all else, and then move on to doing the same with Armour & IRR. I also feel that even if he wanted to, he couldn't hold onto SOLG. He wasn't able to defend OBS, and that was many magnitudes smaller. All any potential predator needs to do (particularly Newcrest or BHP) is takeout CGP and lob an offer. This could happen tomorrow, after the MRE, or as you mention, in two years time during a recession.
I'll admit I'm not as familiar with the more advanced projects, but I'd note that Cascabel is likely to have significantly more Cu in the next few months, and is still growing. That's only one of the targets. I also note the others Au resources are reported as tonneage not in Oz, so it is a little difficult to compare apples to apples.
(20min delay)
