Precious metals miner Sibanye-Stillwater has entered into an agreement with Regulus Resources, and its subsidiary Aldebaran Resources, to acquire a stake in the Altar copper/gold project, in San Juan, Argentina. Peregrine owns the Altar project.
Under the terms of the agreement, Sibanye’s wholly-owned subsidiary Stillwater Canada and Aldebaran, will enter into a joint venture agreement with an opportunity to earn up to 80% interest.
Mining Weekly reported that Sibanye states that the arrangement creates a “new, well-capitalised, Argentinean-focused exploration company”.
“This transaction is consistent with our strategy of maintaining our focus and investment on our core mining operations. We believe Aldebaran possesses the vision, skills and experience to unlock the considerable upside potential of the Altar project, in which we will continue to hold a meaningful interest,” commented Sibanye CEO Neal Froneman.
INTERVIEW WITH SANTIAGO SARAVIA FRÍAS AT SARAVIA FRÍAS & CORNEJO ABOGADOS
Please tell me about your involvement in the deal?
I was involved as the local lawyer of Regulus Resources Inc in Argentina. Our work basically consists in advising our client on the implementation of the Joint Venture from an Argentinean law perspective and performing a due diligence on Minera Peregrine S.A. (Sibanye/Stilwater`s Argentinean Subsidiary) and its mining titles in the Altar Project.
Being the mining rights the main assets of Minera Peregrine S.A., the most important aspect of our due diligence was focus on reviewing them to determine its good standing, whether there were encumbrances, private royalties, landowners claims/agreements, overlapping with third parties, agreements with San Juan Province, third parties claims, and the extend of the permits related to exploration activities like the scope of the environmental impact assessments approved, water rights, right of way to access to the project etc.
Why is this a good deal for all involved?
This is a good deal for all involved since with Aldebaran Resources – the operator of the mining projects -, the parties will benefit with all Regulus Resources’ successful past experience and technical knowledge. This will allow to further develop the Altar Project and hopefully carry it out to the exploitation stage. On the other hand, both parties will have interest not only in the Altar project in San Juan Province but also in others exploration projects like “Rio Grande” and “Aguas Calientes” located in Salta and Jujuy Province respectively, which also have the potential to add value to the new company.
What challenges arose? How did you navigate them?
The main challenge was to have the due diligence finished on time. Our client wanted to have a preliminary opinion on the main contingencies and on the good standing of the mining rights in few days, in order to decide whether to enter or not in formal negotiations. To accomplish this, I personally travelled to Mendoza Province where Sibanye-Stilwater’s subsidiary is registered to review the documents at their office and interview the local lawyers and officers. Then I went to San Juan Province and review in situ, most of the documents and files related to the mining rights and permits. Eventually we were able to give this preliminary opinion on time.
With the 10th anniversary of the Lehman Brothers’ shocking and unprecedented bankruptcy this month, Katina Hristova looks back at the impact the collapse has had and the things that have changed over the last decade.
Saturday 15 September 2018 marked ten years since the US investment bank Lehman Brothers collapsed, sending shockwaves across the financial world, prompting a fall in the Dow Jones and FTSE 100 of 4% and sending global markets into meltdown. It still ranks as the largest bankruptcy in US history. Economists compare the stock market crash to the dotcom bubble and the shock of Black Friday 1987. The fall of Lehman Brothers was a pivotal moment in the global financial crisis that followed. And even though it’s been an entire decade since that dark day when it looked like the whole financial system was at risk, the aftershocks of the financial crisis of 2008 are still rumbling ten years later - economic activity in most of the 24 countries that ended up falling victim to banking crises has still not returned to trend. The 10th anniversary of the Wall Street titan’s collapse provides us with an opportunity to summarise the response to the crisis over the past decade and delve into what has changed and what still needs to.
As we all remember, Lehman Brothers’ fall triggered a broader run on the financial system, leading to a systematic crisis. A study from the Federal Reserve Bank of San Francisco has estimated that the average American will lose $70,000 in lifetime income due to the crisis. Christine Lagarde writes on the IMF blog that to this day, governments continue to ‘feel the pinch’, as public debt in advanced economies has risen by more than 30 percentage points of GDP – ‘partly due to economic weakness, partly due to efforts to stimulate the economy, and partly due to bailing out failing banks’.
Afraid of the increase in systemic risk, policymakers responded to the crisis through quantitative easing and lowering interest rates. On the one hand, quantitative easing’s impact has seen an increase in asset prices, which has ultimately resulted in the continuation of the old adage, the rich get richer and the poor get poorer. The result of Lehman’s shocking failure was the establishment of a pattern of bailouts for the wealthy propped up by austerity for the masses, leading to socio-economic upheavals on a scale not seen for decades. As Ghulam Sorwar, Professor in Finance at the University of Salford Business School points out, growth has been modest and salaries have not kept with inflation, so put simply, despite almost full employment, the majority of us, the ordinary people, are worse off ten years after the fall of Lehman Brothers.
Lowering interest rates on loans on the other hand meant that borrowing money became cheaper for both individuals and nations, with Argentina and Turkey’s struggles being the brightest examples of this move’s consequences. Turkey’s Lira has recently collapsed by almost 50%, which has resulted in currency outflow and a number of cancelled projects, whilst Argentina keeps returning for more and more loans from IMF.
Discussing the things that we still struggle with, Christine Lagarde continues: “Too many banks, especially in Europe, remain weak. Bank capital should probably go up further. 'Too-big-to-fail' remains a problem as banks grow in size and complexity. There has still not been enough progress on how to resolve failing banks, especially across borders. A lot of the murkier activities are moving toward the shadow banking sector. On top of this, continued financial innovation—including from high frequency trading and FinTech—adds to financial stability challenges. In addition, and perhaps most worryingly of all, policymakers are facing substantial pressure from industry to roll back post-crisis regulations.”
The Keynesian renaissance following that fateful September day, often credited for stabilising a fractured global economy on its knees, appears to have slowly ebbed away leaving a financial system that remains vulnerable: an entrenched battalion shoring up its position, waiting for the same directional waves of attack from a dormant enemy, all the while ignoring the movements on its flanks.
If you look more closely, the regulations that politicians and regulators have been working on since the crash are missing one important lesson that Lehman Brothers’ fall and the financial crisis should have taught us. Coming up with 50,000 new regulations to strengthen the financial services market and make banks safer is great, however, it seems that policymakers are still too consumed by the previous crash that they’re not doing anything to prepare for softening the blow of a potential new one. They have been spending a lot of time dealing with higher bank capital requirements instead of looking into protecting the financial services sector from the failure of an individual bank. Banks and businesses will always fail – this is how capitalism works and no one knows if there’ll come a time when we’ll manage to resolve this. Thus, we need to ensure that when another bank collapses, we’ll be more prepared for it. As Mark Littlewood, Director General of the Institute of Economic Affairs, suggests: “policymakers need to be putting in place a regulatory environment that means that when these inevitable bank failures occur, they can fail safely”.
In the future, we may witness the bankruptcy of another major financial institution, we may even witness another financial crisis – perhaps in a different form. However, we need to take as much as we can from Lehman Brothers’ collapse and not limit our actions to coming up with tens of thousands of new regulations targeted at the same problem. We shouldn’t allow for a single bank’s failure to lead us into another global crisis ever again.
For the second year running, Argentina has been ranked as the most complex country for multinational enterprises to do business in, according to TMF Group’s Global Benchmark Complexity Index.
The far-reaching annual study by TMF Group has ranked 81 jurisdictions across Europe, the Middle East, Africa, Asia-Pacific and the Americas according to how complex they are to do business in from a regulatory and compliance perspective.
According to the findings, South America was found to be the most complex region to operate in, accounting for the top three places and half of the Index’s top 20, including Brazil, which climbed 15 places to number two in the rankings.
The high levels of government bureaucracy and red tape are cited as key reasons for making the local business environment in Brazil extremely challenging. For example, it can take around 54 days of work to start a business in Brazil compared to just six days in the UK.
The UK (including the Channel Islands) and Ireland are ranked amongst the least complex places to do business, alongside Australia, Hong Kong and New Zealand.
Ireland has retained its place in the top three least complex business destinations (79th out of 81) for the second year running, thanks largely to its common law framework, stable political environment, strong legal framework and pro-business attitude, TMF Group said. The enactment of the Companies Bill in early 2015 is expected to simplify its environment even further and initiatives such as the Knowledge Development Box, which will enhance Ireland’s onshore intellectual property regime, will ensure Ireland remains one of the most popular destinations for international business (airmaniax.com).
Results summary:
• Argentina (1st), Brazil (2nd) and Bolivia (3rd) are ranked as the most complex
• Poland (7th) is the only European country to feature in the top 20 despite significant reform, thanks in part to systems and laws inherited from the former Soviet Union
• Also in the top 10 were the United Arab Emirates (4th) and the emerging economies of Korea (5th), Indonesia (9th) and Thailand (10th)
• Ireland (79th), Hong Kong (80th) and Jersey (81st) ranked as the least complex
The Organisation for Economic Co-operation and Development (OECD) Working Group on Bribery has said it doubts Argentina’s commitment to fighting foreign bribery after completing a report on the country’s implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments.
Argentina still has no law to punish companies for foreign bribery or prosecute its citizens who commit this crime abroad. Widespread delays continue to plague complex economic crime investigations. The organisation says that urgent action is needed to address these grave concerns. As a result, the OECD will evaluate the country again at the end of 2016, while a high-level mission will also visit Argentina in early 2016.
The Working Group report made several recommendations to improve Argentina’s fight against foreign bribery. These included the implementation of a new Criminal Procedure Code; reduction in the high number of judicial vacancies and the use of surrogate judges; and investigations and prosecutions for foreign bribery cases as appropriate. The OECD also called for Argentina to encourage companies to adopt measures to prevent and detect foreign bribery and better protect whistleblowers from retaliation.
