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Non-Tech : The Woodshed
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To: SwampDogg who wrote (39141)5/14/2006 7:29:43 PM
From: ItsAllCyclical  Read Replies (1) of 60926
 
>> IMO it has been way overdone but we will see <<

Agree. I'm glad Bolivia went first. Maybe Peru will see the reaction this will/has provoked w/the investment community and the mining co's. I believe mining is smaller scale relative to natural gas for Bolivia vs Peru. I can't see Peru making the same mistake even if Humala wins. I don't see nationalization, but maybe some higher fees that everyone could probably deal w/if needed. Right now the royalty fees vary between 1-3% and PAAS is on the lower end of that scale due to their smaller size (big silver company, but smaller company/mines compared to the big cap golds/base metals). So my assumption is that even if PAAS had to pay 3-5% royalties we're not talking about a huge hit to operations. About 40% of their reserves are currently in Peru as you probably know and I think about 60-70% of production currently, but that's set to decrease as their new mines come on-line in Mexico and Argentina by 2008 making Peru less significant (maybe 50% or less by 2008). Of course perception matters more than reality so I likely won't be taking a full position ahead of the elections unless it gets really cheap. Right now it's looking more reasonable than it has in many years, but still not cheap in my book.
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