Ian R. Coles


This essay discusses the Julietta gold mining project and the categories of risk that investors and lenders look at when assessing the suitability of a project. The financing of projects on a limited recourse basis in the emerging markets is a subject that has received much attention over the course of the last several years. This has been particularly the case with respect to mining projects where declining commodity prices worldwide have led to the need for mining companies to access minerals in countries where the costs of extraction are lower than in the developed markets. The recent decline in the popularity of hedging as a means to enhance the attained price with respect to any metal produced at a project has only accelerated this trend. This has led to a concentration on the development of projects in sub-Saharan Africa, the former Soviet Union, South East Asia, and--although now less of an emerging market-- South America.