disbelief, page-14

All...

very disappointing story for those who wish to, or have to sell right now. But there are few fundamental reasons to do so based upon the facts. The main negatives are:

. price of copper has fallen in USD terms by around 18% over highs at around USD3.80lb
. price of PGMs has fallen in USD terms from their highs
. price of gold has fallen in USD terms from its high

Positives:

. AUD/USD exchange rate has fallen around 20% from its highs and the correlation between the copper price and the exchange rate has been high, such that the AUD price of copper which is what is relevant to CUO (as a domestic producer) is little changed at AUD3.90 based upon today's exchange rate and USD price of copper.
. CUO has invested in increased Cu production that is already paid for and will reap significant increases in free cash from its already robust levels.
. the outlook for PGM prices remains good despite recent weakness which has been driven by unwinding of speculative positions. Platmin does not reach production until mid-2009
. PGM players are being targeted by majors such as Xstrata with Platmin to become a significant producer from 2009 with 400kozpa ultimate target.
. Price of gold similar story to PGMs...most likely short term effect

I draw your attention to the most recent quarterly cash flow forecasts contained in CUO's last report:

Estimated Cash inflows/(outflows) for next quarter
$,000
4.1 Receipts from customers 39,932
4.2 Operating & corporate expenses (21,520)
4.2 Exploration and evaluation expenses (1,055)
4.4 Capital and development costs (24,940)

Net cash for quarter (7,583)

Cash on hand 15,681

If you recognise the investment in future earnings amounts, and take the top two lines, one can see that the company is spinning off around AUD6m per month of cash. This is only going to increase as the production rate ramps up from 19ktpa to 25ktpa from December, and 30ktpa from mid 2009.

A rational investor who did not have to sell now would not, and would be buying instead. A trader may sell if they think they will be able to buy in cheaper in future. If/when it bounces I do not want to be scrambling to buy back.

regards
DF