Last week we asked readers what they thought of the HudBay Minerals and Lundin Mining proposal to combine their businesses. Well, the votes are in, and roughly 60% of them believe HudBay is getting the deal of the century. About 35% of the respondents think the added debt of the combination will be the ruin of HudBay. And one curmudgeon believes that the deal seriously undervalues Lundin.
The numbers are interesting, but far from scientific. Only time will tell if a bigger HudBay will prosper.
Previously we asked our readers where they draw the line on project risk. We wanted to know how bad things have to be for a company to drop plans for a property. Well, no surprise, no one in our industry is deterred by remote locations, climatic extremes or delays in permitting and construction.
When it comes to political risks, the picture is different. Almost half of our readers (46%) would abandon a project if armed rebels were threatening to overrun the site. A further 29% would not go forward in a country where the government is hostile to mining. The other risks that put off would-be miners were opposition from NGOs or local communities (12%) and fluctuating commodity prices and/or difficulty raising money (12%).
Just as a point of interest, earlier this year we asked readers to forecast which commodity would see the greatest price rise from 2008 to 2009. Forty-one per cent of respondents believed it would be gold. Well, gold has not gained any ground this year, in fact, the price is off 5% from Dec. 31, 2007. Had we asked which major commodity would lose the least value this year, the correct answer would have been gold.
To vote for this year’s biggest loser so far, please go to www.CanadianMiningJournal.com and vote in the box on the right-hand side of our homepage.