I assumed, when the new investors bought Niobec from IAG, that the only reason it made sense for them was that they were buying it in part, perhaps mostly, in order to obtain the business... the customers... and not the spectacular "potential" in the already existing production capacity. IAG's own (really expensive) feasibility study had already shown it didn't appear to make any economic sense to try to expand production there using the existing deposit. Maybe different managers would find a better way ? But, there, the issue comes back to rocks is rocks... and while management trumps geology, its still true that better management can't make the rocks that they have any better than they really are.
The way an already proven quantity in a good management team trumps the geology... is by going out and getting better geology to pair up with the quality in the management effort...
What you see happening there would make sense... if they also wanted to also buy Niostar to get Nemegosenda as an expansion play... as Niostar's rocks would provide a wide open ability to increase production and lower costs... if they paired the existing demand now met by Niobec's production with a larger and lower cost production capacity.
But, the customers might not care much where the niobium comes from... so you can't discount that the same investors could be a source of money behind recent events... as $$$ is probably what's behind the shifts occurring in Africa, now... where suddenly "legal issues" are disrupting the pre-existing relationships between those in the governments and those who've long been paying and working to try to develop the smaller niobium and REE deposits in Kenya and Tanzania...
Or, for that matter, maybe they could close up the Niobec operations, sell the customers to CBMM, and allow them to further consolidate the monopoly ?
I'd also not discount that it could be a NioCorp focused plan... although I don't see too much sense in the economics of it, none of the advantages in Nemegosenda's lower costs being obvious, there... meaning that would have them replacing a proven, already developed, but higher cost underground mining operation with another, undeveloped, and thus even higher cost underground mining operation, that also still has significant uncertainty in the development risks.
Maybe there's some other wild card out there we don't know about... ?
It hasn't been all that long since the new owners took possession of Niobec... has it ? Maybe there'll be more news, soon... about how they plan to make money off the deal they made ? |
