Q: What, in your opinion, would happen to the share price and business outlook of DSV if the permit for Cordero were never granted? In the current political environment and outlook for the price of silver, how likely do you think it is that the permit will be held up forever?
5i Research Answer:
Mexico's mining sector faced a backlog of 176 projects, with environmental permits historically taking 18-24 months due to regulatory hurdles. Cordero's process stalled post-submission amid election transitions (June 2024) and prior government slowdowns, though 110+ cases resolved recently. Recent optimism ties to President Sheinbaum's pro-investment stance, but technical reviews persist. It is a massive project, and a complete rejection (not at all expected) would shatter the share price, likely by 60%+. We do not think it will be indefinitely delayed.