Re: From Marla......
in response to
by
posted on
Jun 04, 2008 07:26AM
The company whose shareholders were better than its management
There are some points on which the mining companies have suggested that the government may want to revisit their approach. For example, the spending requirement per hectare on exploration is at the high end of international norms. Aurelian would have no problem meeting it but it would be a challenge for some more junior companies. For the long term growth of their mining industry, it would be better to have a somewhat lower requirement.
if i read between the lines, it looks like this means aurelian will get to keep ALL of its concessions no matter what the final draft looks like. although aru has many far-flung concessions throughout the country, and has only worked on a few of them, it won't lose the ones that have been dormant because the requirement seems to be an average spending requirement per hectare.
since aurelian normally spends $2 million/month on exploration overall, it will meet the requirement of spending per hectare, no matter how high it is. it is only a problem for the more junior companies, which may not have the cash or the drills to meet the requirement.
based on further input from the mining companies, the government may reduce the requirement to something the junior explorers can live with. but as i have said before, aurelian will do well in this environment no matter what. as far as i am concerned, the uncertainty may still be there for the junior companies, but for aurelian it's just a matter of how profitable the operation will be, and in turn how high the buyout offer will be.