London South East | The UK's favourite investor portal.

Analysts expect the energy transition to cause a shortfall of copper yet the price remains low; why?

MWS: We are witnessing the short-termism of the markets. Markets are run by traders so they put more emphasis on short-term pressures than long-term fundamentals. The Chinese slowdown, which threatens an overhang of commodity supply is forcing prices down. But over a longer-term the whole world is electrifying which means there are strong fundamentals for prices to move up.

It’s tough to time it exactly, but I would expect that to change in three to five years. In the medium-term the world will sit up and take notice. We will see the cost curves of miners increase as inputs – such as processing chemicals and energy become more expensive – and that will drive up commodity prices.

MWS: There already is a bifurcation in the market. Companies that do ESG genuinely well trade on higher multiples and will get a lower cost of funding from traditional banking sources than mining companies with ESG challenges.

MWS: Everything we do as investors involves a trade off between risk and reward. Ultimately capital flows to the path of least resistance. When we look at a country in Latin America, we are inherently benchmarking it with other countries around the world, including mature jurisdictions like Australia and Canada. So, if Ecuador or Argentina present themselves as a more attractive environment for capital then they will attract it. If not, it will go elsewhere.

At the moment I would say that Ecuador and Argentina are exciting but still Tier 2. However, the challenges in Mexico, Peru and Chile, mean that Ecuador and Argentina have a real opportunity to absorb some of the capital that normally goes to those countries.

As somebody who has been here for as long as many of you (7 years so far), I am no less frustrated.

But then I look at the fact that my 625k shares have cost me c£70k and only 18 months ago they would have cost £250k...

And what's changed?

Precious little...we still have the same world class resource...one of the biggest copper/gold prospects on the planet...at a time when Gold is less than 5% below its all time high (and $300 above the PFS assumption) and copper is also above the PFS assumption and looking to push forward at last...

Yes there have been wasted years, especially while there was antagonism between SOLG (NM) and BHP, NCM and CGP...three of our biggest shareholders...

Now, after the debacle of hiring a dunce and losing some good people who talked commonsense (Ingo and Ayten), we have Scott, who was in at the beginning with Guyana Goldfields and seems to have knocked some commonsense into the economics.

But we also have CGP shareholders who, having thrown their lot in, have a huge vested interest.

We have two investors with designs on the company (BHP originally; Jiangxi recently); 20 interested parties in the data room and at least five that have done in depth site visits.

The resource isn't going to go away.

The global demand for copper will soar.

Gold will plough on to record heights, and...

Sooner rather than later, one of the prospective predators will break cover and either launch a 'knockout' bid or start a bidding war a la Noront.

In the meantime it becomes increasingly tiresome, but I've never felt more that resolution is coming in the next six months.

Nobody knows how it will play out...but...

We can't take it to production because there is no appetite anywhere in the world to lend $2.5 billion to a Junior Miner valued at £271 million...

And a joint venture seems remote because why would somebody want only half the cake when they can have the lot for a few months cashflow for a major...

And in any case, surely a J/V proposal would also prompt a bid from one of the 20 interested parties

So...either Cascabel will be sold (unlikely, because that would probably also prompt a bid for the whole ball of wax) or...sooner or later a takeover will happen and we can all go back to whatever we were doing 7 years ago, rather than wasting man years on here...

Cheers one and all...

Latest Share Chat

Member Info for mattlilly

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Latest Share Chat

Member Info for mattlilly

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Please enter at least 2 characters

No results found

Search results

Recently viewed

Trending