aspen,I tend to agree with the theory that TRF is better value...

aspen,

I tend to agree with the theory that TRF is better value than AAM at the moment, and most likely in the future. IMO, the report should of added IFE as the better value than TRF, but at least it gets a look in. Comparisons are as follows.

- AAM is realistically aiming to product 30k oz @ say $700 per oz profit ($1,400 - $700), ie $21 mill p.a. Comparitively, production to date has been ordinary and massive debts have arisen. Any notional profit will go straight to paying back creditors. What security do the creditors have?

- TRF/IFE are aiming to produce 2mt p.a. iron starting from Sept 2011. OPEX is high @ $90pt but this includes significant capex paid via contractors. At a ramp up of 1mt p.a. profits will be $150-90 = $60 mill (and that's at half production) extrapolate to full production and you get $120mill p.a. But TRF/IFE have experienced delays and are similar to A1 in that respect.

So i see why TRF/IFE is a better investment, but i can also see how AAM is very very cheap. Honestly, I just question the ability of management to succeed in production. It's cheap for a reason, IMO.

I also wonder whether the promises of more transparency and more timely data/info were just fluff - any evidence to the contrary? I see no real reason to believe what was stated in the Sept Qtr forecasts for Dec Qtr, nor what was sent back to ASX after their solvency inquiry. A1 wouldnt tell ASX they are making another qtrly loss. Point is we dont know whether they are on top of things or not.

I do think Au will skyrocket at some point, but for A1 that could be winning by default. That sure doesnt mean they can get Alpha commissioned nor solve their grade issues.

I still truly hope A1 can succeed. At the moment they seem to be producing more grey hairs than gold, but hopefully that can change!!

goodluck all!
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