Ann: Hot Chili and CMP Execute LOI on Second Copper Project, page-42

how much faith can you place on CMP?  As HCH's partner in two projects it is essential to look at their financials.

Their share price has been battered to bits....
Their debt has increased to 1.3billion..... their net income has dropped 5 consecutive years.

http://markets.ft.com/research/Markets/Tearsheets/Financials?s=CAP:SGO

The link above shows their financials. The figures are only up to 2014... and the commodity price has sunk even lower into 2015. This all points to lower income for CMP in the fiscal year 2015.

Perhaps this is why the deal was not binding. If CMP pulls out then it is lights out for HCH especially given the outlook for copper by morningstar. credits to AgentCooper who posted this link.

Morningstar turned bearish on iron ore mid last year - way ahead of many of its peers.
They have recently released a "Basic Materials Observer" report (Nov-15) that is bearish on copper. The sub text reads: "No Relief in sight: Post Peak Chinese Demand Will Prevent a Copper Price Recovery"


"The outlook for copper is worse than most think. Battered copper mining stocks may now screen as cheap, but we see further downside. Copper price declines of the last few months have caused many analysts to pare their near-term price forecasts. Yet longer term most remain bullish, citing copper's geological scarcity and continued, albeit slower, Chinese demand growth. Most analysts forecast an eventual recovery to $2.25  -$3.00 per pound, an outlook that informs aggressive price targets on copper mining stocks....we see significant downside risk in copper mining stocks...all else equal, we'd prefer low cost miners that generate free cash flow amid persistently low prices....we recommend avoiding copper pure plays entirely, copper-focused miners remain significantly overvalued...demand will slow more than expected. We forecast refined copper demand of 23.9m metric tonnes in 2020 for a compound annual growth rate of 0.7% from 2014 to 2020 (a substantial slowdown from the China-fuelled 3.2% CAGR from 2004-2014 and is meaningfully lower than the 2.5% - 3.5% annual growth forecast typical among analysts"