10 days

I was pretty disconnected the last 10 days. However I will take the opportunity to share some thoughts here.

First of all we have seen again some nice drilling results. I know – it is just infill drilling – however the results are confirming the already assumed grade or are even exceeding previous results/grades. I am not a geologist and I realize that the calculation of resources in the ground seems to be a pretty complicated matter. Nevertheless in the sake of simplicity I would say that there are quite a lot of indications that we might see an upgrade in grades and tons. I have also noticed that the high grade shelf in the figures used in the announcements has increased from 1% to 1.4%. Probably this is not of importance.

Pending are the results of KITDD_034:

The extension of holes S36-026 and S36-028 as well as a single angled hole from surface (KITDD_034) were drilled to assess the potential for further deep hypogene mineralisation as drilled in S36-026 (41m at 2.31% from 569m) immediately to the north of Kitumba.

Personally I am not sure what the outcome could be. It seems to me that the KITDD_034 “area” is not directly connected to the high grade core at Kitumba. Could it be that there might be some kind of satellite deposit near Kitumba but in greater depth? And if this would be the case: What would it mean or with other words – what could be the impact? We know that they have drilled down to 728m. So if there is copper then it is quite deep in the ground and therefore maybe without any impact. But maybe I am wrong.

Step out holes (around Kitumba) might deliver interesting or no results. At least we know that there seems to be sufficient smoke to justify drilling.

Copper is doing pretty well. At the moment around US$/lb 3.28. Which is not bad overall. Obviously 3.50 would be nice to see. Who knows…maybe we might reach that level in the next 6-12 months. In line with a resource upgrade and other optimization measures the “optimized” PFS might look different. Just to play around a little bit. Better economics resulting in an after tax profit of A$ 200m at 3.50, 100m at 3.00…..I guess that that should at least increase the attractiveness of a possible future production. Well, we will see.

Zinc is also doing well. Around US$/ton 1950. Nice. As I understand 1st shipping in imminent or a question of weeks. Question with regard on additional working capital still not resolved (I wonder that there is not update on that question but I have the feeling hat Scott has left this issue to the new MD).

Announcement of the new MD should also be a question of weeks I guess.

Takeover in my view is rather improbable. Why somebody should take over BTR? Maybe Glencore might be interested to take over the rest of Perkoa. Maybe….

So not too much has changed in the last 10 days. I think that my personal main finding here is the following:

News pipeline for the next 3-6 months pretty nice. Room for surprise in both directions. Probably possible disappointing news already priced-in in the current SP to a large extent. Positive news will result in a higher SP but I have the very strong suspicion that this will be used by “the funds” to further reduce their holdings – therefore we will see the SP in a range about of 10 cents max. (my guess something between 23-33 cents – very happy to be wrong). As soon as the funds are out and possibly in line with positive (and already known to the public) announcement we might see a recovery towards 40-50 cents in the first months of 2014.

Obviously this is a rather rational and also a little bit pessimistic view. However we all know that tomorrow or in 6 months everything might be completely different (imagine further fantastic drilling results around Kitumba or similar results from Kakozhi or elsewere at Mumbwa).

Deep inside I have still the feeling that in the long term this will be a great story. On the other hand we all know that in the long term we will be all dead.