Q: While I understand 5i prefers questions about companies with a market cap of $1 billion plus, this is a general question more about open-pit mining in Mexico than it is company specific. Two years ago I bought DSV shares for many reasons, not least of which were the involvement of Eric Sprott and the selection of Tony Makuch as CEO. This past summer I was shaken out of my position in DSV when I learned that the new govt was hoping to change the constitution in order to ban open-pit mining. However, apparently they do not have the numbers in the Senate to pass the legislation. DSV's Cordero project is planned to be open-pit. I realize you can't speak to my personal situation, but are investors wise to stay on the sidelines regarding development stage projects in Mexico given the new govt's legislative push or do you believe that nothing will really change? Btw, if you have any information regarding whether or not DSV will be allowed to build the intended open-pit mine, it would be greatly appreciated.
Thanks for any insights you can offer.
Thanks for any insights you can offer.
5i Research Answer:
We do not have any non-public data on whether it will get approval. There is always political risk in the sector. Mexico has historically been a very good place to operate, but it has blocked some specific projects. These were one-off blocks and not bans on mining processes such as open pit. But the new president (October 1) has taken the ban off a list of pledge, and the stock rallied on Friday. This is likely a non-issue now. Here is the release from S&P.