Reading Between the Lines re KGHM Ajax Aug 2 Announcement

Posted by Stop Ajax Mine on August 14th, 2013 10:20pm

On August 2nd, KGHM Ajax held a press conference where they announced that they were delaying their application because they have potentially found a new ore body that they'd like to investigate and potentially expand the project and maybe even make it even bigger, at the same time, they said they may move some of the facilities further away from the city: coverage here, from Kamloops Daily News

From the Daily News article:

"The discovery could also enlarge the pit that is currently proposed and stretch out the life of the mine, company vice-president of environmental Dan Ferriter told a press conference."

"Ferriter was unequivocal in saying the move is not in response to strong opposition to the project's proximity to Kamloops."

Sounds like they're spinning this as a good thing, and that the mine may last longer, build more jobs, and be amazing for everyone. 

However, we have also come up with some other insights that may have been behind he news conference:

  • The announcement came on a friday before a long weekend. Typically public companies share bad news to shareholders on fridays or before long weekends to reduce the amount of press coverage they receive. Good news is more often shared on mondays. 
  • Reconsidering the locations of various buildings could also mean that their research shows that there will be a significant effect on Kamloops and that they have to move operations further away in order to get the mine approved. Perhaps this will add too much of a cost to the mine and they need to now re-assess whether that is viable or go back to the drawing board to somehow make the mine financially viable. 
  • Finding new ore bodies could mean that core samples show there is not enough copper/gold ore in the present location, so now they must go find some more ore near the pit to make the mine viable. With copper prices falling, maybe they need to find more copper to make the mine viable, and they now need to assess the other lower grade deposits near the pit to see if they will make it more viable if they were to mine these new areas... perhaps they're getting desperate?
  • Also curious, is that they have yet to replace Jim Whittaker, the former project manager, unles there is a project manager located elsewhere, there has been no big announcement of a new hire to replace him. Yet there has been a huge number of communication personnel hired - Yves LaCasse, Robert Koopmans, John O'Fee, and so many more.


A couple other notes about KGHM:

KGHM Podolsky Mine located in Ontario closed in March 2013. The KGHM Sierra Gorda mine in northern Chile is huge and anticipating production in 2014. 

This is a guess, but perhaps the top level executives at KGHM thought that we would welcome the mine, and are shocked at the vigorous opposition we have presented.

Just another alternative to the recent announcement that people are taking as a sign that the mine is more inevitable than ever... this mine can still be beat, keep working hard to spread the word and educate people about the real impacts of this mine!


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