Ann: Prospectus for Rights Issue, page-63

Hoots,
Wouldn't that be a lovely option to short? When you consider that to get the 378m shares to $2 each, the MC of CDU would be around $756m.

One of their peer companies with a similar reserve and resource, HGO, has a MC of just $21m, plus they have their plant running at 4.45mt/a at present.

So the market judges a copper company of CDU's capacity at just $21m, which to me fully explains why it is not trading at present. If they used their average ore to run through the plant, then I find it highly unlikely they could run at cashflow positive at all. Only by high grading the initial year or 2 are they going to be cashflow positive, but it means the average ore remaining will be of much lower quality, and only a much higher copper price would allow the company to run at a profit.

It seems to me that the only reason to take up these rights is to bet on the future of the copper price being much higher than it currently is. Which then begs the question of whether there are other companies that would perform much better with a higher share price? The answer here is also a resounding yes with both Sandfire and Oz Minerals likely to do far better with a much higher copper price!!

CuDeco, to me is nothing more than a bet on exploration coming good for the company. So is the ground they have really worth 80c/sh compared to other exploration companies? Again my answer is no, so Barry's $2 options are really only there to make the gullible think the SP might go to that level.
I hope no current shareholders are that gullible.