Nice summary of the best/worst scenarios Dcroston.I have a...

Nice summary of the best/worst scenarios Dcroston.

I have a couple of nitpicking thingies though with the valuation.They now have 1.068B on issue and one can add a few more mid 09 when the oppies expire!

Being a long term holder though I cant say I worry too much about valuations anyway.To me its more about margins and Perkoa has it in spades,Its probably why theyve been a bit relaxed about the whole thing(espc the finance),
obviously too relaxed!!!

I also still wonder about the motivation to change that financing direction from debt to equity and I think DK's assertion that overconfidence/arrogance played a big part(in that motivation) and its come back to bite them in the ar$e by way of NS'ds legal games.One also wonders if NS are thinking along these lines too and are playing a game of "can you see the irony in the mirror MF".

MF seems to have played a game of stall the mine and raise the cash(which happens frequently) which has contravened NS'ds basic reason for taking their position in the first place,namely a quick start-up with minimal dilution.Now we have MF looking in the mirror with NS looking to apportion blame where it should lye.If Im right then the hearing will only be the beginning and it could end up costing him big time.But who really gives a rats about this aspect.Sure its effecting the bottom line confidence of the market in the stock but that shouldnt effect the ability of the company to get Perkoa happening.

On that note we await the findings on the NI 43-101 and just how it will ultimately effect the companies approach to raising the rest of the capex.A couple of things to keep in mind here are

*They seem to be keen to up the production/revenue stream(apparently with minimal excess outlay).This would seem to be an effort to minimise costs over the life of the project and give us a healthier BFS/NPV

*IF,and its a big IF atm,they can add to the resource via the new Perkoa exploration then this could also bump the numbers and justify the higher capex,small though it is,APPARENTLY.

*Finally from the mouth of the company itself,"The company is currently considering a range of funding alternatives"


As DK mentioned we now have a potential 2:1 equity:debt ratio,which should be friendly to the ears of any bank,its just whether they have the balls to see the interests of current holders as being a high priority,and taking some of that risk pricing DK was on about on board,and going for it.I know one substantial holder that would be a little happier with such an outcome and imho the market would come back in droves if this effort was made.After all they have the margin for a quick payout of 50-60M.

One more nitpicking thingy.Im a little at odds with the opinion on the offtakes TC's.Imo the ONLY thing that will reduce their TC's and potentially up the price they get will be the cleanliness of the ore.The big current issue with smelters is that we have excess concentrate atm due to the Chinese shutting up shop on their Zn rebates hence some Chinese smelting capacity has been shut down,hence more concentrate around.More concentrate means less likelyhood of longer offtakes at higher prices.Ultimately the likes of Xstrata and Boliden will not rush into any offtake agreements given they are trying to screw the miners down as much as they can.Just how much "arrogance/overconfidence" can we get away with here as regards our "clean" ore?

Much will also depend on whether or not we will see flow-through of higher zinc demand given the apparent higher iron ore demand China is exhibiting via the higher price paid in this years iron ore negotiations.Bear in mind this can sometimes backfire on the likes of zinc demand in that galvanisers can look to reduce costs by reducing the % of zinc used if the cost of zinc rises too much.Given that the zinc price stablised between $1-$1.40 recently(without the recent speculative spike)we could see the longer term price settle somewhere around here providing ther isnt a concentrate glut which would eventually force the zinc price down.Several individual hedged offtakes have been done arond the $1.10/1.20 mark in the last couple of months so hopefully this will be a pointer to Aims likely offtake arrangements.

That also brings me to the possibilty of a debt via offtake arrangement.It really would be the perfect way to hustle things along and one has to ask is it a possibilty given the apparent timing for the finalisation of the offtakes AND a decision on the raising for the rest of the capex(end of MAY???).Have they always known this would be the case,hence the delay.I doubt it,but one can dream cant they.Given that it was constantly mentioned(predominantly in the media by MF,QUESTIONABLE!!!)that there would be some hedging involved one does wonder.

But then this has always been one of the big market perception problems with Aim in that they simply will not commit to stating a definitive plan on the total financing of Perkoa.Does make one wonder about the offtake/debt possibility and was there any other carrot dangled in front of NS and JPM to buy it up to 30c in 07?With any luck we'll see in May.

As regards the performance rights,yes they are over the top given the remuneration these guys have been getting and it seems WC and VB have foregone their rights.But even given this situation and the fact MF has a disclaimer that leaves him clear in regards to the conversion conditions,the fact of the matter is he has not actually sold down any.His last selling transaction was in fact to convert some options to ords a while back.In other words its still in his interests to see Aim get Perkoa going.

Im just wondering as to his exact motivation in changing the direction of the financing early in 07.Yes there has been arrogance,possibly as a result of over-confidence in the zinc market at the time,but I cant believe that someone with the ability to pick up the Perkoa/Mumbwa deal in the first place(for 1 million was it)has not had ulterior motives in some of the delays.Someone else apparently seems to think so!

Anyway its now well into March and I'll be looking for an annmnt shortly that mentions Brynecut being on site getting the gear ready for getting into the decline.After all this is what its all about.Perceive forward momentum and the sp will start to look a bit healthier.

JUST GET THE HELL ON WITH IT GUYS!!!

Like Hoof says "its not rocket science".

But the perhaps raising the capex is,surely not with $110M already raised and with a nice swimming pool to boot!

d.