resource upgrade, page-36

Mowibble et all,

It just reminds me of the company GGY to which I made a mention of, not so long ago.

What one has to consider, is about the size of the mining plant needed to mine the Cu, and the capex costs associated to do it.

The same applied to GGY where the cost of such a plant were prohibitive and the funds necessary to go ahead with it, could not be raised. As such they either had to find a processing plant nearby to process the ore, then pay for it to freight it there, or sell out.

Bear in mind that even the feasibility study at the time confirmed, in a sort of a way, that it was feasible to mine.
But what one has to consider is, that investors and Financial Institutions rarely lend money to industries/mines that are only barely scraping the bottom of the barrel in order to achieve real profits. A small miscalculation, which could easily become reality, could cost them a lot of money. Besides, we are still a penny company, not something with huge assets to back the loan. An off-take agreement would help, but IMHO we havne't got sufficient copper there to attract such an option.

In the end, GGY sold out the tenement to KZL.

Interesting part though, is that even if KZL had a mining plant nearby, they haven't started to do anything about it as yet. Reason being IMHO, that while they bought the tenement off GGY, it was at the peak of the market, and before the GFC set in. At the same time the copper prices at the time peaked at about US$8,600.00 per tonne with an exchange rate at the time of AUD$1 buying only about US$0.60. Thus giving an equivalent copper price in AUD$ of $14,333,00 per tonne.

Now think about what the copper price is today per tonne, than find out what the AUD$ is valued against the US$, and there lies your answer. Shocked?????

From past experience, the net inground value of the ore in order to consider either a T/O or to raise funds amounts to 10% of the total ore value.

Now if you calculate what amount of copper we currently have available from the JORC, then multiply that by an average copper price, and then divide that amount by 10 and you will see what value per share that copper is worth for someone to lend us money, or for someone to do a T/O.

As such, I do agree with your comment that they may sell it off, in order to raise funds and to allow them continue mining.

Hence why IMHO, the market has currently revalued the sp of AAR.

Sorry to rain on your parade mate, but that is the way I see it.

AAR has to come with a little more in order for the sp to reach higher levels.

Buddy