April 17 (Bloomberg) -- A sustained slump in gold prices
threatens to shut mines and curb investment in Tanzania,
Africa’s fourth-largest producer of the metal, a senior official
in the Ministry of Energy and Minerals said.
“We are concerned that as the price of gold continues to
drop it will discourage future investment,” Ally Samaje, acting
mineral commissioner, said in an interview yesterday in the
commercial capital, Dar es Salaam. “If this continues, there
will be a point when companies can’t operate and mines will
once again confronted with a fact Lutz crawls back into his hole. Wolfie put your charts where the sun does not shine.. you need a new job... hall monitor next to Lutz would do nicely for you.
Thaks for showing us this. It is a signifficant possibility/probability that hgher cost mines with weaker balance sheets will close. That's the "free market" you know. If this company can pull back expenses it can weather the storm for 5+ years - Business decisions to be made. Possibly go forward if the government partner wants to invest too.
First this company only has 3 years of cash at it's lowest burn rate, just corporate overhead.
Second, the government partner doesn't invest. Sinclair wants you to make that assumption and he reinforces that notion by using the word partner. STAMICO's stake is really just the government's ownership interest. TRX is required to put up all the money. The reality is TRX purchased a 55% interest in the Buckreef redevelopment project and must pay 100% of the costs to get the mine to commercial production. STAMICO gets 45% of the profits after TRX recoups its expenses. It doesn't sound as exciting when stated that way. Don't speculate, read the agreement.