The main problem with CSI is its in Brazil. For a long time that as a big problem as the Garimpeiros could eat your deposit's lunch and there was nothing you could do about them. The could by law swarm your property and mine it small scale. Some deposits survived because they were so remote. And the one CSI has now is a case in point. It was the site of the maddest rush in Brazil's history. Even now you must pay the Garimpeiros or small scale licensed miners, as a group, a tax if you operate a gold mine. They are now officially a political party. The problem was in the past too that there was no sure cash repatriation from Brazil. That led to Brazilian companies doing well, but not foreign companies. What this means is that checks to foreign suppliers would not get cashed in a Brazilian bank. And money that went out, went at Brazilian set exchange rates, not the real ones. Equipment into the country was taxed as well, and might have to face bribes to get it in too boot, like Mexico. The other problem with Brazil was layers of "bribes" to get land released. This was really a four layer system of land ownership, native, post Columbian colonial, private and new mining law. Sort of like they are trying to set up in Ontario. With all this, the paradise of mineral wealth that as Brazil lay fallow to foreign companies for decades.
Now many of these problems have been alleviated. Some of them still remain, particularly the corruption and the layers of owhership.
CSI has a good rich deposit with complex somewhat refractory metallurgy. Pt is much different from gold and does not cyanide. It must be floated, and sold to commercial buyers. By this I mean it is more like an industrial mineral and secondary processing to get top dollar and ready sales is not guaranteed without take off agreements. There is no way CSI will make PGM oxides to get the price they would want. They will pay dearly for concentrate processing. Often people like the South Africans or Japanese will refuse to process the con at all. The demand for Pt is largely a predicted one although prices are fairly high. PT and PGMS are like tungsten. You need buying arrangements. The other thing is it is rather expensive to build a mine there and the deposit size although generous enough was limited from the start. I don't think they have added much to the volume if at all. They are basically drilling for dollars. Can they ever get the money to get into production? I don't know. They may, but don't hold your breath. Lakeshore Gold and Cumberland were in the same position in 1996 and, 13 years later, finally Lakeshore made it, Cumberland is still waiting.
EC<:-} |
