Lar – thanks very much for the great summary of your conversation with RM at PDAC yesterday. You have added greatly to everyone’s knowledge and insight.
I am a regular “lurker” and don’t often post, but I do appreciate the enormous amount of work done by this group in tracking this storied stock. I am a long term shareholder and KRY is a big piece of my portfolio and it is really good to have a group like this. Congrats to those who manage it and keep it both civil and on topic.
I also visited PDAC yesterday and also had a long chat with RM. Perhaps I could add my recollections of the conversation and add a few of my own observations.
First, I would echo Lar's observation that RM seemed confident and upbeat. He is obviously as frustrated as any of us about the pace of events, but he left me with the impression that the company is still in a strong position things are moving forward now that some major political distractions have past.
He suggested that the issue with the permit not being issued comes from the dysfunction within the government departments rather than as a result of a desire to change the contract. He said that since there are so many changes in Ministers and senior personnel within the departments that there is no continuity. Every time a key person gets up to speed with the file he is moved to another position. He also mentioned the “half-life of Chavez directions. When Chavez sets a direction, the Ministers and staff start to work toward making things happen. However since the boss changes his focus and priority so often, by the time the Ministers and staff have reached a point where an action can be taken, they are no longer sure that the direction still stands… and so they wait for new direction.
He inferred that it is not likely that the permit delay relates to the illusive “new” mining law. Countries are always updating laws. It would seem that Crystallex legal advisers believe that there is really nothing much wrong with the existing law… it just needs to be enforced and respected.
RF is leading the permitting effort and is in country regularly working with the local management team to clear the way forward. He has a generally good relationship with the government… even though the key Ministers and staff keep changing.
He reiterated that the LC and LB deposits are very different and that the economics of mining are different. They cannot be (very easily) combined. The suggestion that there is some value in combining them does not come from the government officials.
RM gave a strong vote of confidence in Bill Faust as the key guy (along with other senior people) of a core team fully capable of engineering, building and operating the mine. It sounded to me like he was saying that the team was getting ready to do just that.
He also spoke with confidence about the company’s capacity to finance the project.. He suggested that it is not likely to involve much in the way of conventional bank financing. Financing would flow from some strategic partner. I assume he meant private equity or sovereign funds or both. It sounded to me like there have been some discussions.
When I told him that I had bought a bunch more at 20 cents he smiled and nodded. I think he might have been thinking… me too.
FWIW… I also heard the John Doody presentation where he compared market cap per ounce of P+P resources for various companies: AEM at the top at $240 and KRY at the bottom at $7. The difference (he says) is in one four letter word… HUGO.
