Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Bema(Bgo) and Arizona Star -- Ignore unavailable to you. Want to Upgrade?

To: Eldon Slife who wrote (10356)	5/7/2002 12:18:51 PM
From: geoffb_si	Read Replies (1) \| Respond to of 10482

I don't know enough about political risk insurance, but I'd take several factors into consideration: - Is the property already in production? (preferable) Who checked the numbers (production rate, cash costs, etc.)? - If it's a reserve deal waiting to be put into production, who did drilling/assaying, reserve calculation, bulk sampling, capital cost assessment, etc.? Was re-drilling and check assays done as part of DD. (I'd be less inclined to buy into a stock with this type of deal). How will the company raise the money for capital costs? Who's going to lend them the money for a venture in a risky country? - I'd stay clear of a deal that only involves resources (no reserves). - Will the company own > 50% of project and be the operator? - What does the insurance cover? More importantly, what doesn't it cover? Does it cover bribes, if permits are required to advance production? Can production be sold in U.S. dollars (currency risk)? - Is the company cash position strong enough to withstand production halt (strike or other)? There's a lot more, but the level of DD goes to a much greater level. There are certainly success stories, but there are a lot more failures than successes because of high political risk. I would add Venezuela to Liz's list. Las Christinas comes to mind... Regards, Geoff