- runup to election in a country with considerably lower GDP than cleveland will generate a lot of noise and posturing around its national flagship project. this is mongolia's nokia. note that Rio stock is unaffected today, Rio shareholders have seen this before. unfortunate if the BB gets dominated by wind direction in mongolia.
- hopefully SSL has not released the funds yet, possession is 99.9% for a lender. if this revision constitutes a material change in the contract prior to funding then potentially no need to even worry about default cures
- as cashistrash and doomz have succinctly pointed out already, there is no value to the cash repayment mechanism if the gov't takes a bigger piece of the pie and Entree's funds are already gone (see NDX, Terex, Royal) however in this case there is Nevada. Without Nevada this deal is reckless, with Nevada we are looking at unpalatable extended repayment plan but at least reasonable expectation of recovery.
- if mongolia were to actually nationalize vs just manoevering for preferred terms than all FDI gets shutdown and china and russia are only future suitors. my guess is they adjust the terms but not completely minejack the project. weak institutions, governance controls, precedent laws, judiciary can produce any outcome but unlikely they want to be complete investment pariah
- sure NW is smart. lots of guys are smart. but smart does not supply experience. is NW a political risk expert or a senior debt specialist with lots of insolvency experience? not on the public CV anyway. this may be mistake. but worst case its a learning experience for a group that has otherwise demonstrated total competence and real creativity
bottom line (obviously personal opinion only)- election noise not surprising, lots of challenges on this deal but i believe the risk is still justified. that said, if the funds are still in SSL coffers, you hang on until the situation is clarified. and i hope mongolian winds don't direct this stock for the next 5 yrs so really want to see more streams added to reduce this proportionate negative impact further