They have had "operational issues" for months. We know the review team finally went out there, having spent 4 weeks raking through the skeletons in the Perth Office. They spent about a week there and seem to have had a thorough look at all aspects of operations. The basic problem is the one we have known about for ages, the staff Jinchuan have forced upon us are incompetent, corrupt and loyal to Jinchuan not Albidon. They have not got a clue how to run the mine; from not following the mine plan - digging out too much low grade stuff diluting head grades, taking out too many pillars so the mine collapses, running the plant incorrectly doing significant damage to it, ordering reagent they don't need and don't know what to do with and so on. All of this is old news. Operations are continuing, there was a meeting with the Zambian mining ministry last week, but that has not really changed anything. So here is a theory that looks on the bright side:
The review team have finally come to the same conclusion that we came to months ago, the incompetent corrupt Jinchuan staff have to go - it is the only way that the operational issues are going to be resolved and we are going to have a profitable mine. Jinchuan have agreed to this, but there needs to be an orderly transition with a number of details to be worked out, so rather than the rumour mill working overtime, doing who knows what to the SP as volumes are so low. They requested a suspension. Next Monday, or maybe before, they will announce some key resignations and new appointments at the site.
If they could announce at the same time, or shortly after, some board resignations and appointments and that all the loan notes are going to be converted to ordinary debt, then we would see some real action of the share price for once.
However, I have a nasty feeling that what we will get on Monday next week is a report from the review team visit that highlights lots of symptoms and a load of actions to tackle them, but does not address the underlying cause.
This is a key litmus test for the review, if they get rid of the useless Jinchuan staff, then we will know it is genuine. If they duck the issue then we will know that it was just another pointless exercise that will end up costing us $0.5m for no real benefit.
ALB Price at posting:
7.5¢ Sentiment: None Disclosure: Held
