“Lately there has been a huge amount of rubbish here”You are...

“Lately there has been a huge amount of rubbish here”

You are spot on jumpstart if you are referring to the F…… broker report.

I am still waiting for ASIC to give me an answer to my representations concerning the F…… broker report on CuDeco Limited.

The harsh reaction to the JORC resource announcement on Rocklands in the first hour of trading on the 18th August, 2010, was seemingly justified by a harsh broker report that
circulated soon after the announcement.

The report was extremely critical of the Rocklands resource announcement and in stark contrast to a previous buy recommendation with a price target of $9.60 by the same firm in research published a year earlier.

The broker report was published and distributed through the internet and highlighted on public forums not long after the resource announcement on the 18th August, 2010.

The F…… broker report was notable for the following reasons:

i. It’s timing very soon after the resource announcement - Why such haste?

ii. It appeared on “ F….. Stockbroking” letterhead.

iii. It called for a lowly price target of $1.20 in contrast to a previous buy recommendation with a price target of $9.60.

iv. It was without an author.

v. It followed the sizeable F…..’. sell order in the pre-open auction to re- commence trading.

vi. It appeared to be based on false or at least misleading premises.

vii. It was written in haste without seeking clarifications from CuDeco Management.

viii. It used a comparative assessment tool to try to demonstrate what the Company should be worth, which was confusing and possibly not used elsewhere within the industry to seriously demonstrate the worth of a Company.

ix. The report lacked rigour and professional NPV styled analysis that usually accompanied mining research.

The poor quality of the F….. report and the timing of its arrival would have played on investor uncertainty and would have exacerbated an already confusing situation,
particularly since price action makes market commentary and a flood of selling orchestrated by corporate interests was already weighing heavily on the market.

There are several issues surrounding the report that still require further investigation,in particular,

1. Who actually wrote and distributed it and what purpose was it really meant to serve?

2. Why was the report prepared in such a rush and without proper consultation with either the Company or the industry?

3. Why was it unsigned?

4. Why did it use confusing methodology to downgrade the resource?

5. Why wasn’t it retracted especially when F……were in the market not that long after the scathing eport as a major buyer of 440,000 shares at $2.27 on 7th October, 2010.

6. Importantly, why haven’t either ASX or ASIC acted, particularly since F…… were selling in the pre-Open auction on the 18th August, 2010, knowing that their
broker research report would potentially destabilize the market?


What would be your thoughts, and what action would you take? Personally, I am awaiting the results of the Senate Inquiry into ASIC before contemplating anything else.

Cheers,

Max