same info. different conclusions., page-9

hello j.

For instance, you say that after the NCu/DSO is sold that you think there will be enough cash flow to complete everything, in your opinion. This, in spite of the fact that the company hasn't said that it will be selling any NCu/DSO prior to the rest of the plant being commissioned

from the company's announcement dated 9th July:

CuDeco has visited several smelters in China accompanied by representatives of Sinosteel our EPC Contractor and major shareholders of CuDeco, to discuss early sales of native copper concentrate and/or the possibility of a DSO product that could possibly be available well before the Rocklands Process Plant is fully operational.


wrt the dfs, the company may have at one stage believed that it would need a dfs just in case it needed to borrow money. while a 'publicly acceptable' dfs might not have been completed, an in-house business plan was almost certainly completed at a much lower cost, a business plan which without the blessing of the ASX could not be published.

other possibilities for not completing the dfs include:
(a) because it would be based on the jorc estimate which excluded the native copper (which some of you are unable to accept but...), the consequent dfs would be unrealistically low. even if the company released such a dfs and indicated to the public that it did not include the native copper, the trading public would ignore that very significant aspect and smash the sp; i.e., jorc event sequel. releasing a crippled dfs would be in the interest of traders, but not in the interest of investors. I suspect the company is more interested in supporting the people who support it; i.e., its long term investors.

(b) while the dfs was being prepared, drilling continued. because the company continued to discover additional resources on its tenement, the dfs was significantly obsolete before it was near completion.


wrt "it isn't surprising that M&G are bailing.":

are they? a while back, Bluegoose in his post re: m & g selling accelerating stated that m&g were frontrunners for the "2013 DUMB Award". I find it extremely difficult to agree that a fund as big as m&g are dumb! while I earlier suggested that m&g might be helping Xstrata/Glencore to prepare for a takeover, I have since heard of another possibility.

__THIS IS A THEORY__

m&g, realising that the company might be shipping product soon, and understanding that the company is worth a __lot__ of money, wanted to own more shares in the company. so...

first, convince the trading/investment world that they're unhappy with the company's delays, and they've decided to sell down their investment in response (note... sell 'down', not sell 'out'). they then commence to sell some of their shares, pressing the sp down rapidly as if it was important to get out of cudeco as soon as possible. traders and brokers happily join in the fray, shorting the company, selling down the sp and making millions in the process (congratulations by the way).

some retail investors are persuaded by m&g's actions and in panic, sell their shares. what they don't realise is that m&g are buying via other nominee accounts that don't ever reach 5% and hence never need to be made public.

the sp has dropped to $1.80 and seems to be in a consolidation/distribution phase. shareholders have adjusted to the shock of seeing the sp drop so far so quickly and are beginning to relax, hoping that the company begins to ship product soon and that the sp will recover accordingly.

(long term shareholders take note)
then m&g commence stage 2. sell more shares and send the sp down again, this time to the low $1.xx. this time, more of the long term shareholders are affected by the action and in anxious panic sell their shares. m&g soaks them up.

the company completes testing of the crusher circuit, finalises contract terms with the chinese smelters, announces the sales contracts and begins to ship the dso/native copper. m&g stops selling shares and repressing the sp. the sp recovers.

m&g now owns 50% more shares than it had before the sell down, and no one is the wiser.

dumb? I think not.

is that you won't see the plant fully commissioned until the end of 2014 at the earliest, with no divis until end 2015 - later depending on how the final financing is done.

what you say is possible. I hope things turn out better than this, and I sometimes think that m&g's actions will actually lead to a better outcome for shareholders, having forced the company to ship the dso/native copper now rather than issuing more shares. we'll see.