get a grip, page-42

CBA have a loan which is expected to be repaid. CCU hedged 180,000oz per Qtr (60,000 per month) at $29.6 per oz.

This generates $1.776M per month.

A loan at 8% requires $160,000/mth in interest to be paid. In addition they need to pay back principle.

The balance of the money goes to cover cost of production and overheads of CCU.

If they can produce 120,000 oz as they did last month, they generate about $3.5-$4.0M per month depending on silver price. $42-$48M per yr.

If they paid $2M in interest and another $5M off the amount of debt owed to CBA each year, they still have about $35-$41M to cover all remaining costs. Divided by 120,000oz is $29-$34 per oz to cover their production costs and overheads.

Question is what are their costs/overheads going to be. To me it looks like there remains sufficient funds even if overheads increase over and above what CCU management had been expecting. Remember this plant has already produced more than 200,000 oz of silver in its short operational life.

We will see the real story when the next announcement is made.