time to go, page-3

I hear from my broker that there has been some scepticism emanating out of North America during mgmts trip.

Meetings apparently fell through with Mosaic and Potash Corp, however, I understand that AD did meet with Agrium.

Apparently no-one is dissing the size nor the quality of the deposit... however the opex/rp price trends seem to be a major stumbling block atm.

As has been pointed out countless times on here, the RP price is still correcting down, and there is presently nothing (other than fertiliser company forecasts) to suggest that it will have improved by 1Q 2010.

The opaqueness of RP pricing (who currently are only given the option of 3-6mth price contracts through the current rp pricing structure), a declining RP price, and a Wonarah opex figure that is twice the long-term average price for RP is apparently an obstacle for potential investors.

Yes, I know that everyone will debate whether or not that USD$50/t historical price point will ever be revisited, but the point is that during this downturn, virtually every single bulk commodity has dropped back down to long-term average levels.

Absolutely nowhere in this post does it say that RP prices WILL drop back to long term averages... I am merely relaying sentiment regarding the lack of confidence in RP prices not dropping back to long term ave. levels.

Make no mistake, that this is absolutely the key issue for MAK, given it's relatively high opex figures compared to other global producers.

There are PLENTY of fund managers/investors out there who have just had the shirts ripped off their backs by commodity prices collapsing in the last 9-12 months, and rendering boom-induced-higher-cost producers uneconomic, and destroying capital.

Again, I'm not saying this is MAK's case (I am a holder afterall), but I am merely trying to shed light on why the market has not sent MAK higher yet.

Additionally (speak to the company if you want to verify), MAK have had no feedback yet on the samples sent out to prospective customers two weeks ago. It takes time to run the samples through their plants, tweak the plant and re-run, collate, analyse etc etc etc.
Then bear in mind that mgmt are o/s next week as well, so negotiations prob. won't start until second week of April at the earliest (all going to plan) so anyone hoping of an offtake in the next two weeks is dreaming.
If MAK are going to negotiate capex funding as part of an offtake, that sort of deal would be lucky to be signed sealed and delivered by the end of April imo, given you need lawyers involved, possible banking approvals from the offtake partner (not all fert. co's are cashed up anymore), time for MAK to do due diligence on each potential partner etc etc etc.

Scoping study was 3-4mths late from initial MAK timeline, so there is nothing to suggest that offtake won't be delayed too.

Let's keep the expectations real here... there is a huge degree of emotional attachment on these threads. However, just because AMP and Macaurie Funds Mgmt have exited the MAK register, doesn't mean that it is not a good investment. Who knows what their motives were. It could have been purely redemption driven...


One last thing... before anyone bags me, dyor and ring to company to verify the contents of this post.


Cheers,