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  1. minegate

    Mining the Oceans

    Hi Gen-X There are a number of companies involved in this technology other than Nautilus. The technology is not that complex. The black smokers vents are actually easy to mine based on our now established deep sea oil and gas technology. It is basically a dredging operation with a special cutting and grinding head and enough suction to get the material to the dredging ship. The material is so soft it disintigrates inside the grinding heads and is so rich, it can be concentrated right on the ship with basically only volcanic silt discharged back into the sea. Doesn't sound like an environmental problem to me. I had the opportunity to actually touch one of these smokers last month. They are not big and have the physical integrity of compressed talc. The good news is they are so common on the shear plates of the Pacific Rim that their numbers cannot even be estimated. And further good news is that they are a renewable resource. Extract one, it starts rebuilding. Just like weeds in the garden. The whole issue of this technology though raises an interesting question and I cannot get a definative answer. If a company mines these resources, beyond the 200 mile commercial limit of any country, "Which, if an body, has jurisdiction"? The question is not academic. Up until now, the companies involved in this activity don't seem to know based on my discussions with them. We may be looking at an new upgrade to certain concepts of the laws of the seas. Regards Jim Eckford CEO Minegate, Inc.
  2. Hi Dr The Chinese markets are the wild west and I'm surprised that markets in Toronto and New York reacted as they did. Shanghi was only down 9% in one day and recovered 50% the next day. The impact on the TSX Thursday was nothing compared to the meltdown in 1989 and by next Wednesday will back up to average 2007 numbers. If you want a one on one regarding world mining, contact me directly. minegate@lincsat.com Regards Jim Eckford CEO Minegate, Inc
  3. This is far from a bubble. India and China notwithstanding. Keep an eye on moly, tungston, indium and other rare earths, nickel, copper, and uranium. Also magnesium and cobalt. Then check the history of new mines worldwide coming on-stream over the last ten years. The industry lost two decades of development. Regards Jim Eckford CEO Minegate, Inc.
  4. It takes on avereage fifteen years, from first exploration boots on the ground until a mine is actually producing. Political risk is real and that is why political risk insurance is available. Jim [qu ote name=No6' date='Feb 27 2007, 01:29 PM' post='15908] You post this on a day that sees FTSE miners falling heavily on news that a task team set up by South African Finance Minister Trevor Manuel has recommended the issue of a proposed windfall tax for the resources industry, which may be earning excessive profits. Russia took BP for a pile recently. Mugabe wants the diamonds and if gold hits $10,000, I suspect governments around the world will want that as well. I don't think any agreement with government whether democratic or otherwise is ultimately worth the paper it is written on. They will make new laws as and when it suits them. The democracies are obviously more trustworthy, but ultimately and if necessary they will also do what they have to do, especially if economic survival is at stake like the US confiscating gold (and silver?) in the 30's. No one should ever rely on government or politicians.
  5. Hi Spoon A forward sell and commitment for physicals makes sense to cover financing costs of capital once reserves have been determined. This approach covers the bankers by effectively guaranteeing their paper and reduces risk cost. This forward selling is not really a hedge position. It is an accepted put option. Jim
  6. Some governments are again going though this silly exercize of either direct expropriation of both mining and O&G operations or major changes to mining law or agreed royalty regimes. At least a dozen countries are now on this track. Three in Africa, three or four in South America, and possibly half a dozen in central Asia including Russia. Best bet for the companies involved is to put their operations into "maintain and hold" status but more important, upload all data via satellite to their head offices and destroy local computer data bases by destroying the hard drives, and repatriate expat staff. Then put "MIGA" on notice under terms of "political risk" and expropriation coverage. Mugabe doesn't care about MIGA and the rest of the Bretton Woods group, but other countries are and realize the potential impact of having the IMF cut them off if MIGA has to swallow a claim. Oddly, few of these countries actually have operating mines that they think could be a cash cow for a couple of years. Most dollars are tied up inside data from exploration programs and the development plans are inside the data and brains of those developing the project. But not all. Zimplats is at risk but for how long? Mugabe is not long for this world and the PMGs are not going to go away. And there is no way the Zimbab gov't could take over that operation. Crystallex in Venezuela is certainly at risk but really has not much to lose after insurance claims and really nothing for the government to seize at Las Cristinas if the data is gone. Just an few thoughts. Regards Jim Eckford CEO Minegate, Inc
  7. There is a big big difference between forward selling of physicals inside hedge books and futures trading. One cannot get knocked offside with forward selling of production regardless of price rise and falls and nothing would affect the balance sheet. Prices rise. Too bad. Prices fall, great. The danger comes inside trading futures with forward selling physicals. This is straight gambling and more than Ashante got cault offside in what they called their hedge book. I've been inside futures calls for physicals to guarantee cash flows. Then one rogue inside decided to bet the farm by trading off physicals to trading our physicals forward into futures. It was a disaster. Regards Jim Eckford CEO Minegate, Inc.
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