Claude:
<Does this implies important CAPEX?>
That's what I don't understand yet. There's no doubt that they need a significant CAPEX to move *millions* of tonnes of sand and gravel. The question is how they're going to pay for it, and this is what I'd like to clarify.
As far as I know, they don't intend to issue CSL stock at these levels to raise the funds -- although I suppose the decision could change if the price rises rapidly as it's done in the last few weeks. That leaves JV'ing the project as one option. And then we may be faced with a "30% of megamillions is better than 100% of nothing" decision -- which is true!
But they've still got some powerful partners. Bateman is the obvious one. Another is the VZ government (EDELCA) that clearly has several political reasons for seeing this going ahead -- namely...
- There's an election coming up within a couple of years and Chavez needs some "good news stories" soon -- e.g., self-sufficiency in energy-production, cooperation with foreign investors, etc.
- The environmental and electrical-generation benefits of the project are *very* real. Chavez will want to use this as a model for the whole of the Amazon basin -- and in fact this could be the "kicker". The issues of cleaning up former mercury pollution, efficient hydro generation, provision of clean water supply, fisheries, the need to provide a livelihood for the former garimpeiros (riverside miners), etc., are common to the whole of the Amazon-basin. So the Bajo Caroni is an important pilot project in this respect for Venezuela, Brazil, Colombia, Ecuador, Peru, Paraguay, etc. CSL seems to have good connections with the science community representing the various Amazon-basin communities.
Finally, as far as I know, CSL has several groups of financiers in the wings -- in both the US and Canada -- and there seems to be a strong interest in financing this thing if all the permits go through. Today's market action showed some real interest by somebody to accumulate shares.
After all these years it would be great to get a decent return on the CSL investment!
Best regards,
Howy
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