Good Morning,
With a growing discontent in Chile over the drought,
the press are awakening to the idea it's not good for Chilean copper
production, more so the natives. Yesterday EMC reported on the protests at
Antofagasta's (ANTO) Los Pelambres. For those needing to the geographical
model, Chile Copper Mines.
It was asserted that, "The protests were
triggered by a small group who do not necessarily represent the valley
community and are seeking action by Pelambres and the local government to help
alleviate the current drought conditions. Discussions regarding water
availability have been proceeding for some time with the intention of
establishing a lasting solution." Yet today, almost entirely
contradicting that statement is the court ruling against Los Pelambres (ANTO
subsidiary) we’re notified of issues regarding the Pupío stream flowing
through Los Pelambres.
The majority of miners in Chile are suffering,
those myopic iodine speculators will still be focussed on SQM's iodine
production, will be well versed in the problematic history of security of water
supply. The sector is not without its issues of corruption and the legal system
/ prosecutors are starting to pay attention.
A few families control 50% of all mining interests
in Chile (read being perceived to be above the law), with growing resentment
from the locals. Not only brought on by a perception of greed but increase
belief that profit comes above all else, the 'stream' at Los Pelambres
being a prime example.
With various other options available to the miners
including a sea water pipeline (at cost) and not necessarily viable at the
current prices, it's going to be a difficult situation to manage. The blame is
placed firmly at the door of El Niño (a rather large swelling amount of
warm water in the eastern tropical Pacific ocean), although the miners get the
pain/blame by the locals.
APF (Anglo Pacific) still do not appear to have
updated the market on the Largo Resources (TSX: LGO) refinancing issues. If
these end negatively (although unlikely) could have a material impact on the
royalty. Largo emailed out the corporate update last night in respect of its
Maracás Menchen Mine and announced the appointment of Mr. Mark A. Smith as its
new Chief Executive Officer.
Basic maths suggests TSX: LGO needs $60M (CDN),
with Mark at the helm financing should come easy for those old-timers of
Molycorp and more recently NioCorp (Niobium at Elk Creek). Perhaps on the 25
March, Anglo Pacific (APF) will give some indication of their
knowledge. Based on their share price performance since, 2011/12 it doesn't
bode well.
Shorts were scambling to cover on Allied Minds
(ALM) this morning. Those betting on sentiment should be more short-term, with the announcement of BridgeSat costing some profits. BridgeSat intends to develop optical
connectivity system that aims to increase the speed, security and efficiency of
data transmissions from low Earth orbit (LEO) satellites at a reduced cost
compared with traditional radio frequency solutions.
Igas Energy (IGAS) finally came forward with the
long-awaited UK Shale Farm out Agreement with INEOS. The figures aren't
bad at all for both parties, the Swiss Chemical Group (INEOS) get to fund some
decent acreage with Igas getting some much needed cash, and carry. The market,
perhaps, should have reacted better to a deal worth £65M, alas there's no
pleasing some people.
The news is sufficient to find even the negative
of investors now reconsidering. The large bets (EMC) causing some drop as they take
short-term 30% gains in six weeks, perhaps they might just leave
some skin in the game.
Leggie, Cairn Energy out today!
Atb Fraser
