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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: ForYourEyesOnly who wrote (1294)	9/10/1998 3:17:00 PM
From: Gerald Walls	Read Replies (1) \| Respond to of 8010

Does political risk insurance cover all of the outlaw business tactics they will likely encounter in Russia? Who would insure ALL POSSIBLE RISKS IN RUSSIA without a ridiculous premium?? Good luck collecting from the insurance company........ Probably some group like Lloyd's wrote it so collection should not be difficult. As far as a "ridiculous premium", the insurer thinks the premium more than covers the probability of risk and the insured thinks it doesn't. As far as what it covers, I'd assume (you're free to assume otherwise) that it would reimburse PAASF the nine million if they are unable to proceed with the project due to the disintegration of the Russian government, its actions and the actions of its subdivisions or agents, or of the actions of any successor government etc. Still stinks of big time risks to me..... Not proceeding means 100% probability of 100% loss of the initial nine million. The nine million is already spent. It's a sunk cost. The risk has already been assumed. That's why they insured it, to offload part of the risk onto someone else. The money left to spend can be stopped at anytime if they determine the project to be economically infeasible. This would have nothing to do with political instability except that they might prorate the return to account for the added risk. After all, this project has been underway for quite a while. They can't just say "We wish we'd never started it. Give us our money back." If they knew this Russian mess would happen they never would have started the project but that's water under the bridge. I think insuring the nine million and continuing with the feasibility studies and getting the mine ready for production if economical is the only reasonable course of action. What would you have them do, abandon the nine million and drop the project?