South American Silver Plummets As Bolivia Announces It Will Nationalize One Of World’s Largest Silver Deposits [Zerohedge]
July 10, 2012 Leave a comment
Anyone long silver miner South American Silver Corp today is not happy, because while the precious metal responsible for the company top and bottom line has risen significantly, it is our old nationalizing friend, Bolivian President Evo Morales (who last year caused substantial moves higher in silver with threats to nationalize various silver mines in his resource rich if everything else poor country) who has stolen the spotlight, with his latest announcement that he is on his way to nationalize SAC.TO’s Malku Khota property, which the company describes as “one of the world’s largest undeveloped silver, indium and gallium deposits” and which El Pais adds “is considered one of the largest undeveloped silver deposits, with reserves estimated at 230 million ounces, and at least 2,000 tons of indium, gallium and gold as well.” Of course, while this is good news for the actual precious metals as it means much more supply is coming offline, it is very bad for mining and extraction companies such as South American Silver, which stand to lose one after another property to a repeat of last year’s wave of nationalization. Indeed, at last check SAC.TO was down 27% today alone and plunging.
This is how Reuters covered the development overnight:
Bolivia will consider nationalizing Canadian miner South American Silver Corp’s silver property, President Evo Morales said on Sunday, following violent indigenous protests against the mining project.
Leftist Morales, who last month took control of global commodities giant Glencore’s tin and zinc mine in the Andean country, said he hadn’t taken a final decision on whether to revoke the Canadian miner’s concession.
“Nationalization is our obligation, I already raised the issue of nationalizing (the Malku Khota project) last year, and I told (local residents) to reach an agreement, because when they want we’re going to nationalize,” Morales told a farmers’ gathering.
Exploration work, in which South American Silver plans to invest some $50 million, is expected to end within three years. The company describes it as “one of the world’s largest undeveloped silver, indium and gallium deposits.”