an underwater mak part 1, page-11

Hi dacata

I'm a holder of UCL and looking at the long term possibilities. As such my response to the acquisition of the Sandpiper project is different from yesterdays' daytraders. They view it as an opportunity to make a quick momentum trade and for some it was spectacular. In doing so they put a lot of heat into the market cap.

I'm inclined to agree that somewhere in the range of $15-30 million is probably a fair cap on the back of an announcement of a contract to acquire a project. Daytraders would doubtless like to push it on significantly further but the cap won't sustain it for now. I expect it to drop back a bit further before finding clear support. It was around $13.5 million before the announcement.

What I am aiming to do is to look for what the potential value of UCL will be. Firstly I am of the opinion that UCL will get Mehdiabad zinc mine back on track eventually. It may take a long time yet though, hence recent negligible capitalisation, but if achieved will represent hundreds of millions in market cap. I'm happy to wait with the majority of my position.

What the Sandpiper phosphate project has done has reset the company. It's given a reason for optimism after 18 months of pain and something for holders and the market to follow with expectation. It also demonstrates intent and effort by management to build shareholder value in focussing on a sector with good near to mid term earnings potential.

If people are buying with expectation of a multi bagger in the short term they are mistaken. The daytraders will disappear shortly and the volume will pull back. Then we can get on and focus on the progress of the project starting with the projected interim JORC within 2 months. If the project is viable then the market cap will grow and holders will profit.