Member Info for Smoothbrain

@AuInspired

I thought similarly to expansion in the Philippines, but I was looking at blackstone minerals which is similarly located, 25 year 'mineral production sharing agreement', a huge gold/copper resource, and also Australia based. With the trips to Australia, I wonder if it is another contender. They have huge gold/copper deposit

https://blackstoneminerals.com.au/projects

True, but this goes back to Sakura's point. Are MTL happy in the Philippines because it is good for business, or is it because Darren lives there, so 'MTL' are happy in the Philippines.

Pedro, I may be misunderstanding, but I believe EL was referring to sunken cost fallacy in his original statement, and I agree with that. If we choose to stay in the Philippines but all attempts to develop a new mine fail because of how the country is set up in order to allow new mining enterprises to exist, then it is a bad situation and cutting losses by leaving would be the right choice

Lee, that is current risk based on today's figures. I am talking forward risk if situation isn't resolved. Those costs will change, and likely escalate if oil spirals upwards and will far exceed 3 million USD per annum, and may accompany a drop in the price of gold if traditional market trends between the two continue.

My comment was in response to and supporting Surrey's healthy dose of realism, being right about the Philippines and reports we keep getting from there. If you read my previous posts, you defended all of MTL's moves when I also pointed out that MTL has failed to deliver materially in the Philippines in the last 5 years towards any progression of mine life or new mine.

Darren's comments are the point of contention here. He says the price of fuel is not an issue, max cost is 3 million per year. His same comments are the ones that promised Runruno expansion and Dupax, and same lack of comments that meant issues were found out by us digging around to uncover relevant information. Treating his statements as gospel ignores the other possibilities based on current market data and global trends. We are lucky we are in a low cost mining zone, however we are not independent of other infrastructure and logistical problems.

Poor market and purchasing power means countries like Nicaragua might get less fuel shipments because national purchasing power is lower, as we are seeing currently in the Philippines too. You said in a previous post fuel issues were addressed, but in reality they haven't been, and the country is still managing shortages and just released a large economic stimulus to further address this. In Nicaragua, with similar situations and a large mining enterprise, if there is poor domestic enforcement during shortages, then fuel is more likely to be stolen, and mining infrastructure not protected.

This in comparison to say GGP in Australia, much more fluctuation in price with fuel and gold prices due to higher cost of mining, but relatively speaking these risks it will be more shielded from - if the possible encroaching black swan event happens.

After all Hormuz is essentially still closed for all intents and purposes, and Russia which had sanctions lifted has had most of its refineries attacked such that it cannot even supply its own population currently.

You can say this is all speculation, but having worked in and with third world nations and in import/export, these are all very real factors one should consider. In the UK we pay more but can still get what we went. There, you go without.

And as much as we love gold, it is a highly volatile asset and the entirety of this investment is predicated on it staying at the levels we currently have.

Condor is grand, and I wish for all the success as an investor, but as pointed out before, a significant fortunate pivot that is keeping us afloat if it delivers. However based on traditional metrics of a business delivering on its promises and plans MTL has not been

I for one prefer the dose of realism on this board. Cheerleading without proper consideration is how we all lose money should there be unexpected change, let alone something serious go wrong.

We need to be able to consider ideas and situations. We are still rapidly approaching an oil crunch point due to hit many nations in the next 1-2 weeks given Hormuz traffic has not normalised yet, and gold prices are trailing downwards. We are not out of the woods yet by any measure imo.

Hopefully Nicaragua is ok, but again who knows what Trump seeks when he gets bored next time. Thankfully the one blessing of Iran is that he is unable to focus on attacking other nations currently.

Replenishing global oil stores will go on concurrently with existing consumption, so inflation won't drop for months after the conflict ceases and existing oil shipments resume. Considering 20% reduction in global flow resulted in a global strain within 3 months and depleted oil stores, I would estimate minimum 6-12 months to restore to business as normal without additional measures placed on top to oversupply for correction.

Stands also to reason that any oil producing region would not oversupply either and capitalise on highest price of oil for as long as possible, so realistically 6-12 months is a pretty conservative estimate. We could easily see up to 2 years depending on how things pan out.

Various factors here but biggest to me is still Iran and Hormuz situation. Has been long enough now that strategic oil reserves the world over are depleted, so there will be a deficit into next year which will keep prices relatively high until at least 2027 - and that is assuming that the flow restores today.

If the conflict continues, then we may a parabolic rise in the price of oil which will further dent price of gold in the short to medium term.

Https://news.sky.com/story/tsunami-alert-after-8-2-magnitude-quake-hits-the-philippines-13551811

We will be fine if AI takes over the world as gold is great for high end electronic equipment

As above. Let's see how this plays out

We are lucky the price of gold is where it is based on that report.

I think this uptick is Iran exuberance. I think it's premature, but happy to be proven wrong. An end to the madness is always desired, but I just don't see how it will happen with talks having collapsed and Lebanon being continually bombed which was a requirement for reopening the Strait

I'm hesitant to be happy with this recent shift. The Iran situation is only now beginning to reveal the significance of it, and it looks set to escalate unless there is a sudden positive change.

I would guess the announcement is going to be the expansion in Nicaragua which we are already aware of?

Yes but that money is unlikely to be earmarked and set aside at no cost to us.

Isn't taking a loan being in debt, which MTL has just done to continue building La India?

My quick breakdown of risk:

If Darren leaves, I think MTL would struggle. I get the impression he assumes a lot of the general responsibility of standard corporate senior roles into how he conducts himself and the business. This gives him greater oversight but then nuances such as communication and updating fall at the wayside. If he left, whoever took over would probably struggle to replace him both for this knowledge and the lack of broader senior leadership to get them updated to the necessary level.

Gold is going up, what goes up must come down. Really a question of when in the long run. If monetary policy relaxes with less international turbulence and overall improvement in trade, banks will hold less gold as a hedge and more foreign currency instead, so the price might drop.

Costs of mining - region is reasonably fixed for cost given MTL is in 3rd world countries. Fuel is the biggest outgoing, both directly for machinery, but regional domestic electrical production. If it is fossil fuel based, similar hits to production and processing may be observed, whether the mine is finally hooked up to the transformer and regional grid or not.

Political interference - domestic and international. Domestic - Philippines has shown that even with government support an empowered local population can do well to derail developments, especially when it overlaps with artisanal mining interests. Most mining has domestic opposition and we know Nicaragua does as seen from TV, online news and youtube comments.

International, we know of US sanctions already against Nic. US invasion into Venezuela and historic claims to oil in the country. Their threats to neighbouring countries extending into central Nicaragua under the guise of cartel/drug/immigrations interests.

That mines used to belong to US companies may still regard international assets is an unknown variable. Bessent is a notorious gold bug and how influence at that level might be flexed. We know Darren talked of potentially purchasing them. If Nicaragua awarded them to MTL for example, and the US later claimed they were stolen from US companies, all hell would break loose.

Other risks:

Financial - MTL transitioning costs and building of new mine, already discussed, relatively low risk and hedged with a loan but still greater than before. The close case for MTL was if Runruno had no future we would all get a decent payout based on share price. While new mine is better for long term investment, if the company crashed at this point after burning its cash reserves on trying to construct La India, we would get nothing.

Workforce - Again lower risk, main issue is injury, illness and death to work force through either direct mining incidents or indirect such as further pandemic or natural disaster. Upskilling workforce may delay some development.

While all is relatively unlikely, it has less unlikely under US administration that ignores the rule of law at every level

Any others?

Somehow the undoing of the underlying logic is more disheartening to my investment than the ongoing Iran war.

I am not the biggest holder here but this discourse is what makes me sense more risk rather than less, as dishonest and continuous cheerleading is exactly where I made investment mistakes when I had less experience.

I would never put all my eggs in one basket, and I would question how logical any risk considered investor was if they did that in the absence of specific knowledge that the rest of us do not possess.

And risk has increased Lee. The buffers we depended on have reduced (Runruno) and disappeared (Dupax). All we need is a hurricane in Nicaragua and then we are almost certainly in the pits in a bad way. Pretending otherwise is not a good look.

No worries Lee. I think it is important to debate these points and glad we can all try and hash out our relative understandings to better direct our investments.

I don't think that analogy pans out to running a company or known measures and adjustments over a period of months to years. It is not just Dupax, but Runruno expansion as well. If you know the local population is blocking you continuously from developing the area, destroying your equipment and negatively impacting the timelines you have declared is part of your development plan, informing your shareholders about such changes would be the right thing to do.

Not doing so, the lack of knowledge and information and then the information being negative is worse than being given negatives in a timely fashion. It negatively impacts sentiment and trust, and is obvious this is part of what has happened. Trust is much easier to erode when you stand to lose more from such actions.

Pretending that these are not poor decisions of leadership is also problematic, and again all impacts actual risk assessment. How a leader behaves is vital to how we perceive a company and its relative likelihood to succeed.