xstrata walks--great news, page-13

"now compare AOH mkt cap to CDU
who would you be buying ?


AOH is undervalued and CDU is overvalued ( IMO )

CDU got a heap of rolling stock cheap in the GFC but will still end up spending circa $350m to have the 3mt plant operational by the end of next year.

AOH are talking 40000 ton per year production - and CDU will probably produce double that amount for the for 3 or 4 years - they currently have an EIS application to increase output capacity to 4.5mt per year.

AOH,s problem is raising $$$$$$ from such a low market cap - I expect they are in a similar boat to Exco where it becomes marginal for shareholders to take the money now by either selling the whole company or selling the project as Exco did.

To Raise $400m odd million from here will result in hefty dilution - I doubt the economics of the project will allow for debt funding as SFR have done in the west.

I am guessing a low ball take over offer will be coming AOH,s way in the not to distant future.

hOOt