20 LEXPERT
|
2018/19
|
WWW.LEXPERT.CA
How much high-risk adventure in foreign lands
are mining clients willing to take, and has their
appetite for it changed in recent years? e an-
swer may vary case by case, but caution is defi-
nitely the watchword: "We have clients who are
definitely refocussing on less politically volatile
settings and now only consider opportunities in
riskier geographies when they directly comple-
ment current holdings. While other clients are
maintaining projects in riskier areas and have
not exited, these projects are largely being kept
on hold," says Goodmans LLP partner Cath-
erine Lyons.
In an issue of Insights into Mining, KPMG LLP
identified its Top 10 risks facing Canadian mining
and metal companies in 2018. ey are:
1. Commodity price risk
2. Permitting risk
3. Access to capital, including liquidity
4. Community relations and social license to operate
5. Controlling capital costs
6. Environmental risk
7. Political risk
8. Ability to access and replace reserves
9. Controlling operating costs
10. Capital allocation
Since 2016 at least, "community relations and
social license to operate" has ranked fourth, while
"political risk" has continued at seventh. In other
words, these are important risks, considered by
mining clients aer financial risks, particularly
this year. And the top three on the 2018 list re-
RISKY JURISDICTIONS
IT'S A
MINEFIELD
OUT THERE
PHOTO:
REUTERS
MINING CLIENTS ARE
SHOWING CAUTION ABOUT
INVESTING IN FOREIGN
JURISDICTIONS BECAUSE
THEY MAY FACE DIFFICULTIES
THERE AND IN CANADA
BY JEAN CUMMING
