molybdenum up 67% to.... $20 usd, page-12

The problem for MOL now - and the final reason why I bailed out 2 weeks or so ago, is because it has become clear to me that the commodity price boom is clearly over.

Please not - I did not say resource boom, as it MAY be likely that demand for resources will remain for some time. But the price at which the resources/commodities trade may be much lower than what we experienced in the last 12-18 months....and none of that is good for a stock that has a: a) USD750m funding shortfall; b) is experiencing the funding shortfall during the most savage credit crunch in decades - if not 70 years; c) missed the boom in terms of coming on stream for production; d) is facing a savage decline in the price at which it can sell its product; e) is an extremley low grade producer (more on that in a minute); and f) finds its contracted buyer - molymet - forecasting further drops in the moly price to a price BARELY ABOVE MOL's cost of production price.

In its BFS MOL's cost of production was around USD8 from memory and they believed they would be profitable with long term moly prices at USD12-13. If moly does trade at USD10 next year, it will be a death nell for this project - given they don't have the funding.

MOL's project was already low grade and earlier this year, as funding options continued to deteriorate, MOL took the gamble of announcing that its resource had doubled. It only doubled because MOL management could justify mining at an even lower grade due to the moly price remaining so high.

Sadly, this announcement did not convince the market, and MOL's share price hardly budged higher. We now know why.

If moly prices do drop further to the USD10 range, you can most certainly forget all about those low cut off grades EVER being mined; MOL's resource will have to shrink and yet the need to fund the project will still be unfulfilled.

The final problem will be that MOL will have progressed with sinking tens of millions of borrwed dollars into mine construction. Unless moly prices are higher than USD10 and unless the credit crunch has had a miraculous recovery 12 months from now, then MOL faces a very unsure future.

Now...I know this is all bleak stuff but it is the reasons why I cashed in my chips. I just feel that - sadly - these guys have missed the boat.

I hope I am wrong for the sake of those still aboard.