pdac7 Mar 2018 10:01
Speaking in front of a crowd of several hundred people in downtown Toronto�s convention centre on Sunday, noted investor Rick Rule sounded a bullish note about mining in the Democratic Republic of Congo.
The central African country has been riven by horrific violence, said Rule, chief executive of Sprott U.S. Holdings Inc., but it holds vast deposits of high-grade copper, cobalt and other minerals.
Still, he acknowledged there are risks.
�What could go wrong? We don�t have enough time� to answer that, Rule told the audience, gathered for the mining conference hosted by the Prospectors and Developers Association of Canada.
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It�s a question that is attracting much reflection from mining executives looking for the next place to explore or build a mine, many of whom now are flush with funds to replenish their project pipeline, as a result of a surge in the price of a variety of metals.
At the same time, many countries with nascent economies, such as the DRC, are rethinking some of the deals that were cut with mining companies when commodity prices were struggling. Now that prices have risen, many are looking for ways to increase their share of the pie.
A copper and cobalt mine the Democratic Republic of Congo.
The result is that as metal prices rise, counter-intuitively, mining companies in emerging economy countries may also see their risk profile increase.
But there�s still plenty of exploration going on in such countries.
Don Dudeck, chief executive of Savary Gold, which is exploring in Burkino Faso, said the country recently increased its royalty rate by one per cent, and the government would own 20 per cent of any mine he built.
Still that�s just the cost of business in West Africa, which he described as one of the last places where high grade, high volume deposits that have never been explored, can still be discovered.
�I spent the bulk of my career working in North and South America,� Dudeck said from his investor booth at PDAC. �I can find more here (in Africa), for less.�
Indeed, he pointed to other large companies that are already producing in Burkino Faso, including B2Gold Corp. and Endeavour Mining Corp., as evidence that it�s possible to flourish there.
�Governments are financial opportunists too,� said Mark Child, chief executive of Condor Gold Plc., which is hoping to obtain permits in the next several months for what would be one of the largest mines in Nicaragua.
Child also noted that other mining companies are working in the country, including B2Gold, without incident or changes in the royalty rates.
�There�s always a risk in any frontier market that things will
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