hard rock options, page-22

Treefeed

You stated:
"You as well as many other punters on chat boards like Hotcopper do interpret what you/they read in the most optimistic way possible."

You on the other hand interpret what you read in the most pessamistic way possible.

The negative points you raised:

1. CNQ stock is down 4% to 9.2c
- So what?? 4% on low volume doesn't mean very much. Probably just nervous nellies such as yourself trying to get out at whatever price they can due to overly pessimistic assumptions.

2. The company doesn't make any money as of today.
- The company was never expected to make a profit so soon anyway. How is CNQ different to any other speculative explorer that is yet to go into full production?

3. The plant continues to severely underperform.
- 'Severely' underperform?? That is your pessimistic assumption. Yes, the company has experienced some production ramp up problems but all companies go through this. The company has been upfront about this all along and have clearly explained exactly what is wrong and what needs to be done to fix it. Is it a 'severe' problem that will cause the downfall of the company? Absolutely not because the problems have absolutely nothing to do with the hard rock mining phase which is the real company maker.

4. It will take fresh money to rectify this. CNQ doesn't have this kind of money!
- More overly pessimistic assumptions. How do you know exactly how much it will cost the company to rectify the problem? The company had $950k as at 30 June and some additional revenue from the 1st bulk shipment received in July and potentially more in August depending on the grades/ quality of the bulk material tested by Mitsubishi. On top of that, they have now raised an additional $2m as per the App 3B with shares issued on 10 August which can be used for workiing capital purposes moving forward.

5. There was no follow-through buying in CNQ stock one day after the cornerstone investor was announced. So the share price advance to 10c appears to be unsustainable, exactly as I had predicted.
- Well done Nostradamus.

6. The A$2.0M won't be sufficient to fund the measures to rectify the plant's underperformance.
- Once again another overly pessimistic assumption. How can you possibly know how much it will cost to repair the tailings plant? The Tailings Plant cost $4.4m (from memory) and you have assumed that even $2m won't be enough to fix it?? The $2m was never meant to be used to repair the tailings plant anyway.

7. Hence, we could be in for the third cash raising within a little more than one year.
- Possible but once again, capital raisings are to be expected for speccy stocks like CNQ. If you don't like capital raisings then you probably shouldn't be invested in penny stocks such as CNQ. I suspect that you were possibly overly optimistic when you first bought into CNQ to seriously believe that they could commence Hard Rock mining without multiple capital raisings particularly with a market cap of only $20m.

8. Should we face another cash raising, rest assured the share price will be crushed again as it was the case in both earlier cash raisings. Just take a look at KIS.AX!
- As per above.

9. With construction of the hard rock plant about to start in 2013 the next HUGE cash drain is in sight already! This expansion will cost much more money than anything CNQ has done before and there is no other way to finance it than dilute our holdings further which means more pressure on the share price.
- As I stated above, anyone who invested in CNQ believing that they could commence Hard Rock Mining without dilution seriously needs to get their head examined. Of course there are other ways to finance it other than pure dilution. That's why they are in discussions with Mitsubishi for possible funding arrangements or offtake agreements. I'm not saying they will definitely succeed but to say there are no other options is IMO being overly pessimistic.