Cost to produce is lower than most copper/gold mines - it is a...

Cost to produce is lower than most copper/gold mines - it is a shallow open pit operation so mining costs are low, and process plant costs are lower than quite a few operations too - so profit eventually will be good. The difference between Alara and a lot of other small cap miners is that Alara chose to fund the construction of the mine + process plant with bank loans (debt) rather than massive capital raisings which would have been highly dilutive to shareholders - or take on a partner who was willing to fund the construction in exchange for equity / shares. In a highly profitable situation like this mine it makes more sense to go down the bank loan route for funding as dilution is forever. Obviously though bank loans need to be paid back and and it is best for all shareholders if the loans to the bank etc are paid back first as we don't want to be paying more interest than we need to.

There is around $21,000,000 loan + interest owed to Alara by the joint venture company, but paying back the bank is first priority as Alara is earning money on the loan to the JV - but paying interest on the loan from the bank. Once the bank loan is paid back then Alara will be very profitable.