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James to follow on from my last post you may be ineterested to read the stuff below.

Disclaimer - I personaly believe CDU is a vastly superoir deposit than AOH but given the fact that both companies are in the same Mt Isa linear and both have had mining licences issued - the disparity in current market caps suggests a substantial premium is being factored in to the current CDU share price not a discount,

We all know the reason for this is to quote the crash test dummies - " the JORC is a piece of crap " but without a DFS its a big leap of faith for new investors at this stage of Cudecos life cycle to place $1b market cap value that CDU almost achieved in the recent price spike.

According to their JORCS both companies have 1.5m tons of copper in the ground ! AOH market cap is $140m - CDU is $780m

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Altona Mining
This stock trades at about 50% of its valuation, which means something when there is a catalyst to remove that discount just around the corner.

THIS MINER TICKS RADAR’S BOXES Altona Mining has what Radar looks for in a mining stock: a strong low capital intensive mine in production; an asset with huge potential; and it doesn’t rely on mining contractors.
Propping this up is an extremely competent management team.

“Rather than conquering the world in one go, we get into modest production, and then look for expansion,” says Altona’s Scottish born chief executive Alistair Cowden.
Cowden says Altona has the best of both worlds, operating in Finland which is the world’s technology hub for mining and processing equipment, plus it is able to capitalise on Australia’s strengths of “risk financing” and operating mines.

A FINNISH PRODUCTION STORY So far, it has been an amazing story. Altona’s team has been able to get its Outokumpu mine in Finland up and running for only $42 million. This is a mine which is on track to produce over $50 million in revenues from copper and gold production in the current year.

The mine has rapidly ramped up production to a point where it’s now ahead of mill capacity, he says. It is possible that the production could be increased by 40 per cent next year, although this would come at the expense of the current year’s profit.

If it does expand the mine, revenues could reach $80 million in fiscal 2014. When you add in the fact that it is extremely high margin because of the low cost of production and above average grade you’re looking at as much as $30 million of operating earnings from this mine.

WITH HUGE POTENTIAL IN NORTH QUEENSLAND At its current market cap the market is only valuing its Finish operations, and doesn’t take into account the potential for
expansion. More pertinently, there is nothing in the share price for its Roseby project in North Queensland, near Mt Isa. Roseby has a resource of 1.5 million tonnes in copper, and is strategically located. Altona got involved in the project two years ago which was originally owned by
CRA, Pasminco and Zinifex before being partly developed by a junior explorer named Universal, which didn’t have a credible path to development.

“It hadn’t had any sensible systematic work done on it until we came along and now there is a credible feasibility study for 40,000 tonnes of copper a year to be dug out of an open pit mine,” says Cowden. Part of the asset’s legacy however, is that in 2005 when Universal received a hostile bid, the Swiss mining giant Xstrata, with a market cap of US$28.2billion foiled the offer by pumping some money into the company and receiving an option on the Roseby project for 51%. The option expired on 30 June and because Xstrata and Altona have failed to agreed on a valuation, an “independent expert” has come in.
THIS STOCK IS CHEAP, FOR NOW The result of this valuation should be known by Christmas and Xstrata, the option holder, will have 28 days to agree to the expert’s price.
Although Xstrata is at liberty to make an alternative offer not related to this figure.

There are other parties that Cowden says would be interested in “farming in” to the project if Xstrata bow out, but Radar believes that there is a strong likelihood
a deal will be made because Xstrata owns the Mount Isa-Ernest Henry mines and processing plants in the region, and has made it known it is prepared to secure more
resources in deals with juniors. It paid $175 million last year for Exco Resources’ Cloncurry copper project, near its Ernest Henry mine.

Brokers have valued the Roseby range from $100 million to $180 million, and if anything the copper price, which is holding up nicely these days, will assist Altona. Cowden certainly shows himself to be the plucky Scott, when speaking of the likely outcome for a deal with Xstrata: “It’s 1.5 million tonnes of copper. It’s also a
viable project. We don’t have a problem. If anyone does, it’s them.”

These are the words an investor in Altona wants to hear.

BULL POINTS
- Xstrata option to purchase 51% of Altona’s giant Mt Isa copper project
- Low cost copper/gold producer in Finland
- Management’s mining capabilities

BEAR POINTS
- Complicated ownership structure

WHY WE LIKE IT
Altona has a mine “Outokumpu’ in Finland, which has started production to produce a minimum of 10,000 tonnes of copper equivalent for 8 years generating $30m a year earnings. There is a very real potential for expansion. A
big added bonus is Altona’s 1.5m tonne copper “Roseby” project near Mount Isa, Queensland. Xstrata have an option over 51% and this needs to be exercised by the end of the year.

WHAT’S NEW
Outokumpu project reported its first commercial production in late October and the signs are good in the ramp up
phase. It’s on track to produce 6,000 tonnes of copper and 6,000 ounces of gold in fiscal 2013. The cost of production
is very low because grades have exceeded expectations. Also Xstrata’s option over 51% of the Roseby project is to be decided with the Independent Expert’s report due out very soon.