news update and placement

News out. Only just digesting it now but initial mixed reaction.

i. Placement. $3 mill raising with SPP. I find it a bit disappointing as I had hoped that they could hold out on more capital raising until project was ready to move ahead to financing stage. My own initial expectations of cash flow was there was enough to see out the year. With the delays on issuing the Exploitation License they obviously have to project needing to cover ongoing running costs into next year. I guess its prudent to get the cash in place now and good that it is going to existing shareholders but still disappointing that it will lead to more dilution (40 mill shares potentially or about 5% of existing fpo's) and that the raising is at only 2.5 cents - less than those to Lundin in 2005.

ii. Project update.
More encouraging here. As expected still months ahead on the negotiation process, bureaucrats are the same the world over. However at least the company has advanced them to the point allowing current discussion and some more direct statements for share holders. A projected time table of resolution in the 3rd quarter is somewhat encouraging - if the Iranians will work to keep to it of course.

Feasibility studies etc. Very interesting the allusions to new techniques of recovery of oxides. This will be something to keep an eye on as it may have significant implications for the ultimate cost of capex. I am purely speculating but perhaps may lead to the ability to set up the total plant for much less than $1.6billion? I expect the staged development will remain the model but every dollar saved on future stages will improve profitability almost exponentially.

Cautious response to the news that an Iranian engineering firm has been appointed to verify the Aker Kvaerner assessments. Hopefully just a sensible measure by MZC to build confidence and certainty with Iran but a part of me does fear the possibility of a set up? Unfortunately there's no way of telling apart from share trading over time.

Overall my assessment is that the direction remains positive and that the worst does appear behind us but it remains a waiting game for shareholders. Not one for those without patience or fearful of risk.