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March 18, 2010 Dear Friend,
PolyMet Mining withdrew from
our conference, and we will add Labrador Iron Mines as the 10 am
speaker on March 24th. PolyMet cited an engagement in Europe.
The updated agenda is attached. Please let us know if you will
attend the conference, want one-on-one meetings or wish to
attend the 7 pm March 23rd speakers dinner at the "21 Club" at
21 West 52nd Street.
The attached "Copper
Industry" report provides a "road map" to possible future FCX
or AngloGold procedures should their projects in the Democratic
Rep. of Congo be similarly seized like First Quantum's Kolwezi
project.
We carefully reviewed First
Quantum's accounting treatment of its $786.8 mm investment in
its 65%-owned Kolwezi tailings project, which the Congo
government seized last September. We expect the full amount to
be written down within a couple years if the DRC ignores
international arbitration and First Quantum fails to collect any
compensation.
We expect the DRC to auction
the property to a new owner, perhaps Chinese. Maybe 5 or 10
years later the DRC might shaft the second owner, and perhaps a
Russian or African company will operate it in a third go round.
We are not optimistic that a change in government would create
more civilized procedures in the DRC, where the magnitude of
corruption exceeds our imagination.
The bottom line is that
future copper output will not grow from the DRC as expected
originally. Further, projects with grades between 0.18% and
0.5% copper in British Columbia, Nevada, the Southwest, Chile,
Argentina and other stable areas that respect legal contracts
will move ahead instead.
Faithfully,
John C. Tumazos
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Copyright © 2008 John Tumazos Very Independent Research,
LLC
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