Hello gemsearcher, russett, et al,
I have a couple comments:
1) the Klipspringer production scenario could be greatly influenced by the decisions of the Marsfontein JV when the high grade M1 ore runs out next August. It is about 17km from the pipe to the existing plant, a reasonable cost with high grade material, but adding much to the cost of lower grade ore. Apparently there is discussion of the JV building a new, 50tph plant on site at Marsfontein, thereby freeing up the existing plants to process 100% fissure material. While at the discussion stage only, the JV would have to begin moving quickly to have this plant ready for next fall, due to permitting, water availablility, etc. Remember that while DeBeers is operator, a 29% equity position is held by various empowerment groups, who likely feel profit, and jobs for locals, as prime motivating factors. Future development/exploitation of the resources in the local region, by all of the JV partners, will likely be tied to continued progress on both sites.
2) The deal on the Messina financing may not be that difficult. I have been assured by SUF mgmt that non-recourse, project financing has been offered from several sources. In RSA, many corporate entities, along with financial institutions, are looking for ways to meet obligations commiting them to invest in RSA. The political implication of being involved in the creation of 900 mining jobs, in the present climate, can not be dismissed. Add in the involvement of empowerment groups on the financing side, and the availability of the technical team and experienced labour force from Klipspringer, and I can see how this project could receive much support as soon as the bankable is delivered. The deadline is mid-November, so some time between then and now, we'll have many details.
3) The analysts have presently abandoned SUF. While this is both annoying and distressing, it puts a grand opportunity before the incoming President/CEO (I hear that something may happen here by month end) to meet, greet and listen to issues that the analysts and large shareholders may present. While this may be little consolation as Canacorn and Porkton whack bids, it will, in combination with the data from Messina, Klipspringer and Marsfontein, provide a huge opportunity for new management to regain credibility/goodwill.
4) The present roadshow in Europe, while a toss-up in my opinion, may provide a new forum for those interested in platinum or diamond exposure. With the depressed share price, it may not be too surprising to see some of the old supporters from the continent return, if only for the short term trade.
5) Many of the technical, chart guys that I've spoken with think that SUF could break down below $2.00. They could be right, but if there is a bunch of cash on the sidelines waiting for the final sell-off before the bounce, well, what might happen if there was a quick development, or if these recent sellers are quickly out of stock to sell?
Just my thoughts, but I was obviously wrong in buying more last week.
Regards,
Confluence |
