monday morning blues, page-20

The market is saying that the Oxides may well be unprofitable and get put on care and maintenance similar to a number of high cost and poorly performing Oz gold mines. The market currently values sunk capital into an unprofitable mines at virtually at zero in this market for many companies.

What value CMR if the Oxides is valued at zero? Well we basically have exploration upside, bit of royalty thing in NSW and Mt Fitch U now almost worthless against debts to be repaid on the con notes and to GT. On balance worth basically nothing. The whole valuation hangs off the long term hope of Sulphides going ahead under HNC deal despite lower grade and smaller resources.

Everyone should be considering what they would want to pay to hold CMR with now significant debt position, zero cash flow, dilution to repay debt and ongoing costs with only the HNC sulphides deal or turn-around in sulphur costs and metal prices to save the day. On-going risk includes chance that HNC seeks to walk away or renegotiate the deal on more favourable terms while CMR is on their knees (Chinese are nothing if not ruthless).

just food for thought.