final cap x costs and shares on issue, page-21

Hi Buddy,

Going back to the 18th August, 2010, brings back memories.

I was rummaging through my ASIC files when I came across these thoughts from a CDU poster. I don’t know his/her name from my manuscript.

In hindsight, it is an interesting read and thus should give more recent CDU posters the opportunity to understand where some of us are coming from.

"What a shame we gave away the deal of a Century may we be bleating soon. Some food for thought before you hit that sell button CDU believers.

There has been unprecendented turnover in CuDeco in the past week. Shareholders have been asking why. I can only guess at what I think is the reason for the swings and volatility and the appearance that shareholders are selling down the stock. The register does not reflect that proposition. Although there has been selling there appears to be a concerted effort of someone to force some shareholders into positions where they are forced to sell or have their positions sold due to calls.

If stock is sold by a large force which can force positions to be sold it will create a vacuum and the opportunity for someone to soak up the stock being sold off by the margin calls. We can only speculate who it may be. What I can tell you for sure CuDeco is now in play.

The Game: CuDeco was trading at $4.70 a share before the announcement of the JORC.
The press and some brokers tried to enter the minds of the shareholders by saying the JORC grade was too low. When in fact CuDeco grade is the second highest Cu Eq grade of any open cut prospect in Australia behind Prominent Hill.

1. Prominent Hill 1.5% Cu Eq Zinifex.
2. Rocklands 1.24% Cu Eq CuDeco.
3. Mt. Isa Open Cut 1.1% Cu Xstrata.
4. Kanmantoo 1.06% Cu Eq Hillgrove.
5. Olympic Dam 1.04% Cu Eq BHP Billiton.
6. Ernest Henry 0.90% CuEq Xstrata.
7. Maroochydore 0.80% Cu Eq Aditya Birla.
8. Cadia Hill 0.29$ Cu Eq Newcrest.

So CuDeco shareholders, you can see that the grade of CuDeco is actually the second highest open cut mine grade in Austalia. So, why would anyone sell shares???

Because there is a bigger force. CuDeco was trading at $4.70 with a market cap of $639m. For someone to make a bid someone would have had to bid $7.00 or make a bid at $952m. So what would Merger Acquisitions and strategists suggest? Burn $100m on selling down CuDeco. Everyone in the industry knew that the CuDeco Resource was a great resource with the fist 4 years treating 3mt @ 2.05% Cu for 61,500 tonnes of copper. Value of production 61,500 x $US7,500($A8,500) tonne for a total revenue of $A524m. Cost to produce Max. $24 tonne. Total cash cost $72,000,000. The surplus or gross profit would be $A452,000,000, before tax. Tax 30% $135m. leaves a Net Profit to distribute to shareholders of $316,400,000 or $A2.30 per share per year. Now for a stock trading for $2.00 it looks an attractive stock. Unfortunately shareholders in CuDeco are Mums and Dads and don’t know how the game is played.

Now what is the best way to steal a company. Drive the share price down even if it costs $100m in losses. As seen above if the share price can be banged down to $2.00 and then a bidde bids at $4.00 they can take control for $544,000,000. If they had to bid when it was $4.70 it would have to bid $7.00 a share or 136m shares x $7.00 or $952,000,000. So they burn $100m and save $408m. So by burning the $100m they make a $A308,000,000 savings. Unfortunately Mums and Dads don’t think like sophisticated investors and panic and sell to the wolf.

I have been to the last 3 CuDeco AGM’s and at each one WM has told shareholders when the market finds out what we have at Rocklands , the big boys will take it off you. He said, “That no matter what the resource is, the force will sell it down and panic everyone into selling”. WM said, “Don’t fall for the three card trick. Don’t sell unless I sell!!!”, It rings loudly in my ears. “Hold your nerve”, he said. Some listened and some didn’t, some can’t.

News today: The news today confirmed that Rocklands is far bigger and richer than everyone thought. The picture of the nugget also had the picture of a coin. That coin just happens to be the same size of the holes in the end of a RC Bit. It was screaming out, us big nuggets miss out on being counted because we can’t get to the sample bag. Only the small nuggets can be sent to the top for sampling. What the bigger drill core seems to be doing is picking up the bigger nuggets. At a grade of 4.37% Cu in the pilot plant, this means a lot to some people.

To me, it said that if 24% of the Central Las Minerale is Native Copper and Las Minerale is 450m deep and 600m long and 45-50m wide as shown in the graphic, so a quick calculation is 800m long x 50m wide x 150m deep(native copper zone) x Specific Gravity weight used in the announcement to date, I get 18,000,000 tonnes at 4.37% Copper.

So why did the stock go down today. Whoever is stalking CuDeco knew that the cat was let out of the bag today. For the first time we saw what WM has been saying for the past 5 years. It also shows why the JORC took so long. He knew that the resource would not reflect the true value of Rocklands because the methodology of calculating it with computers that cut the top grade would not include the high grade Native Copper.

Today we found out that it obviously wasn’t included. Today we found that the recovered grade was 4.37% Cu not 1.24% Cu. Today the big boys knew that eventually Mums and Dads would get the picture. Mums and Dads that control CuDeco shares have been softened up over the past week and a bigger softening up today.

CuDeco should have jumped by $2.00 today not dropped. The shares didn’t drop, they were forced down. WM has been warning us for 3 years and no-one listened. We have all held our stock for 5 years and when the time comes to go into production and reap the benefits of our wait, we did exactly what we were warned not to! Sell.

I can understand why WM has gone quiet, he must be furious with the selling which he predicted would be brought on when the cat was out of the bag. Well folks you will all know who now owns your stock within the next week or so or even as early as Friday. I don’t believe that they will push the stock below $2.00 as its getting a bit too close to showing the manipulation. There is no law against what they are doing, but they cannot be seen as maulers either, so they have to tread a bit light.

For a company that is trading at $2.00 and probably paying a dividend of $2.30 within 2 years it looks as though we will have given it away. I think it will be another case of, the big guys duped the little guys. Won’t this Forum be good reading then hey?

Anyway all of the above is my humble opinion only, hope I’m wrong, but I doubt it. Good luck all real CuDeco holders.”



By the way ASIC have not yet responded to my recent representations for an audit of CuDeco(CDU) Trading on the ASX.

Cheers,

Max