Thanks for the reply baystock!
I think we'll have to agree to disagree on that Lamaque project.
1. Geos I talk to say the veins are narrow and hard to mine.
2. PK mentioned in a CC that CMM would be working 24 faces in order to meet the production rates. That is a LOT of faces and will take a large number of development crews to keep that many faces going.
3. I think inflation is going to take a bite out of PM profits. Fuel costs have to lead to increased electric charges, petrol has gone up and if $200/bbl oil finds us that will work its way to the diesel equipment all other commodities are going up so parts, steel, tires and other stuff will continue to go up.
4. Little has changed internally in CMM such that those that made the predictions of 110,000 opy from the Sigma pit are still in charge. This "team" has yet to hit most production targets so I'm not sure they can hit the 100,000+ opy goals. As you point out they are lacking in competence.
5. In order to get this loan, The Banker is going to require some guarantees. It sure seems probable that CMM will have to hedge a fair amount of production - which should cut into the gross margin in a big way.
6. That $60 Million CMM is try to borrow is only the gross capital needed to build out the mine as THIS plan calls for. CMM also needs an additional $38 Million in sustaining capital so that has to come out of profits too.
7. While Banks are in the business of lending they still want to do so with clients that can repay the money - taking write offs makes managers look bad. With the aversion to risk out there now, one has to wonder if anyone will be willing to loan CMM money with PK's track record? {failed production goals for 4 years, 2 bankrupt companies in the past, CMM technically bankrupt right now]
8. I agree with Freedom - if PK gets the ship righted again, she might have a tendency to go off and buy another project.
I think CMM, if it can get financing and avoid bankruptcy, is now in a severe "show me" mode. Until it demonstrates real profits and sustainable development investors, rightly so, will cast a jaundiced eye toward PK and her band.
I think there is an even chance the whole thing collapses.
Good luck with your investment!
Cheers,
H3 |
