post bfs; what happens next?, page-16

So you still have them cso1.I was beginning to wonder if,after such a long period without an update,that might have been you dumping into the bfs announcement but more likely the issuers of the placements a while back considering the size of the sell contracts being dropped.Thinking about this these guys will be making a nice little 100%+ so its no skin off their noses to drop these.

Ive said it before and I'll say it again its very reminicent of the sp behaviour of AVL or should I say AVM.

Will I list the similarities.

-African venture,although not central Africa(as is avl) will still have that soveriegn risk(what a dirty phrase that is on the investment scene) associated with it.

-A virtually untried economy(current)/politic with untried infrastructure.Although no ongoing rebelious activity.A huge plus.

-A great resource,virtually mineable without a bfs,as was Dikulushi.This however is where GIP has had a little more foresight and perhaps even learnt a lesson from AVL.AVL was screwed down bigtime in terms of its debt funding arangement with both RMB and Rothchilds who got extremely sweet deals from AVL.This will give them that much more leverage with the funding of the project.Just how this pans out at this stage is anyones guess but at least GIP are doing their utmost in terms of off-takes and the bfs to minimise anything they might have to give away to potential funders.

-World Bank participation?I'm not so sure.It would be nice.And I think theres a much higher possibility of it occurring than AVL had of getting it.As it turned out it wasnt to be for AVL.But this is in a much higher profile area(Egypt/mideast)that has been subject to political/economic instability due to the current obvious problems.The World bank may just see this as a fairly cheap entry point in helping an already weak ecomomy.But then they had this opportunity with AVL/DRC too and didnt take it.A guessing game this one.

-Project located in a fairly remote location.Once again not such a large factor as AVL has with Dikulushi.Processing to saleable product to be on site.

Transportation to port and shipping costs?Does the company incurr these as a part of the costs.Not sure on this one and maybe dependant on the off-takes and ultimate buying contracts.

-Project is a new start up that requires new infrastructure etc etc.However if AVL can get Dikulushi up then theres NO reason these guys cant get Abu Dabbab happening.

And the similarities go on.

I would be extremely surprised,considering the current off-takes to purchase the processed tantalum/feldspar(tin easily saleable on the open market at good prices)if the sp did not move at least to the low to mid teens come the bfs,unless the bfs is on the nose.Theres no indication that this would be the case and the company has been consistently stating its all looking very very promising.Just how far it moves will be very dependant on just who(and how many)get involved.


Considering the above again,if the larger Australian investment community can get it past their mist convered glasses,and they pile in one after the other then the high side of 20c post bfs is not inconcievable.However if they get just one or two on board then expect that low to mid teens behaviour as per AVL.AVL started to really move when CBA got involved or should I say when CBA were ready for it to move.

-As far as it going blue sky(theres a phrase I havnt heard in a while)Perhaps dependant on just what sort of a deal they can get funding wise as well as the lead time to production.

-If they are talking production at the end of 2005,this doesnt give them much time to get the funding arranged and in place(a few months at most) in order to start building plant and infrastructure.

-I still have a few doubts over Abu Dabbab such as stability of the government,ability to get infrastructure in place(power,desalination-not cheap)but then with any luck the bfs will answer some of these questions.
The bfs being inline with what has already been said and taking more of the variables out of the equation can surely only enhance the sp.

Then its up to who they find to fund it.

Roll on the bfs.

A further delay with the bfs would not be a good omen or idea GIP.
I would think the market would have already indicated this by now if this was to occurr.But you never know.

Next couple of weeks will tell all.

d.