There a numerous problems with the sand market and they wont rectified anytime soon. I actually think that 90% of all the aussie sand plays will never see the light of day, especially any with capex's over $50m.
If the management and board had taken the option of being a glorified backyarder, teamed up with some chinese third party to dry mill it, I wouldnt be writing. But they took the 10 bagger option, with a huge capex, and have failed the very people that put them in to make good decisions - their shareholders.
I know what are you thinking, as I have done the same, the price of the commodity is this, demand is this, so one plus one equals two. Doesnt always pan out that way.
So where too now? Unless they go to shareholders with some basic idea of building a concentrator version, then I think Coburn idea will be handed to someone else for not a lot. There is also the option of joining up with some other minnow who may have a bit of cash, but I wouldnt count on that.
One thing is for sure, they will be coming back to shareholdes in the next six months for more money, they will probably spruik the idea of a JV parnter, but if they havent got one now, its more than likely they wont.
Whenever I make comment on H.C., I dont give a recommendation to buy, hold or sell, but what I will say is this - be really careful throwing any more money at Coburn and the promises you may read.
I'm only trying to help you guys, and I only say this from poor deicisions I made believing certain projects will make it, to only lose my shirt, shorts and jocks.
Pep
GUN Price at posting:
2.1¢ Sentiment: None Disclosure: Not Held
