ddzx1. Mehdiabad has operating costs in the lowest quartile of...

ddzx


1. Mehdiabad has operating costs in the lowest quartile of World production. See Rob Murdoch's comment on 12/5/06. Your calculations must be wrong. Why they are wrong, I do not know. Some reasons maybe you have included capital costs for processing the silver, lead and copper, but you have failed to attribute any revenue from sales of these metals. Also you have halved the output of zinc production to 200,000 tonnes per year when that capital cost you used was for 400,000 tonnes p.a.

I agree with your general thesis that investment numeracy of the type you obviously possess can generally be capable running a coach and horses through such seemingly obvious statements as "$19bn worth of recoverable metal in ground must be worth more than zero", particularly when the capital costs are so high and when most people simply do not understand the concept of discounting future cash receipts: if compound interest fools many people, then the reverse process of discounting must fool people similarly?

However, on this occasion you are just plain WRONG. I stand by my argument Mehdiabad is worth at least the restitution value, and that it may be worth a good deal more, if only Jordinson WOULD STOP trying to please the shareholders who have the power to sack him and stop trying to rip off all the others.

I want 60 cents for my shares and nothing less. I don't give a toss what the 'normal' takeover premium is compared with last prior closing price.




Sources:
12/05/06 Comment by Rob Murdoch

"The Mehdiabad Project represents one of, if not, the largest undeveloped zinc resources in the world. Union believes that the appointment of Societe Generale is a major step forward in raising the required finance for this very
significant low grade, complex ore body which will result in the Mehdiabad Zinc Company becoming a major zinc producer, with operating costs in the lowest quartile of world production."

http://www.investegate.co.uk/union-resources-ltd--url-/rns/project-update/200605120849448648C/