confronting my inner demons, page-9

Hi Safari.

Your guess is as good as mine Safari on all your questions.Id only be guessing.

Id add a couple of other (Delphic)questions.

The main one being why havnt we seen an offtake yet AS WELL as the finance.And the question that logically comes from this is just how related are the finance and the offtake.

Obviously payback on finance relies on Aim having a guaranteed revenue flow for the period of payback,so are the two inextricably linked?If I was a bank lending upwards of US$80M to a mining project in Africa I'd want a guaranteed hedged offtake arrangement to back any financing deal.But Aim management said in an interview a while back that the lenders assured management that this was not the case and it was not necessary to hedge any production if they so wished.

An unusual comment?I think so.

If THIS is the case then there is no reason to hold back on a financing deal UNLESS

*There is perhaps an issue to be made as a part of the financing deal.e.g the banks or offtakers may want in on the convertible notes or any further issue,but not at an overly elevated price in relation to any potential final sp when Perkoa hits full production.

HENCE

*Someone may have specified that they dont want the sp too positive until they have accumulated all the stock they wish to.We all know it goes on.Imho I wouldnt be surprised if those sells were from CU.Funny how the sell depths reduced substantially the other day just as the buy depth did as well.The usual market forces?Maybe!!!

Watch out if this is the case as it seems CU has pulled the plug on buying for North Sound so there may well be something about to break if this is the case.

OR

maybe it all has to do with just how much cash they have on hand to do what they currently need to and once they have finished the box cut and basic site works they will reassess the amount of cash required and then go ahead with what they need.It may well be that they might just be able to substantially undercut the amount of capital required than first thought.

OR

it could be a timing problem and the banks wont let them go ahead until the box cut and site works are done and they are ready for the next drawdown of cash from the debt facility.I dont know of too many banks that will put aside a debt facility if they know it will just be sat on with no commensurate project development for which the cash was allocated.But then a finance deal can be signed off on and the date for release of funds be pending on further project developments I suppose.Which makes one think again as to why no deal as yet and does it have anything to do with current on market stock accumulation.

If one then extrapolates this thinking and gets even more conspiratorial one could ask is does North Sound know just where the rest of any such necessary raising is going and they know it will be done at a much higher price hence their hapiness to accumulate at mid 20s.This is my favourite scenario but not necessarily my favoured one!

There are so many permutations and combinations that could be thought of AND the goal posts are continually moving according to the company that may neccesitate more changes in how they raise the necessary capex.Now this does seem like a bit of a cop out to me when you have someone like Barclays that should have bedded down a basic finance package.But then this may not have been their job.They may well have been asked to come up with several finance tactical plays dependant on what the zinc price did over time and how any type of hedging on the offtake might effect the way in which they should finance Perkoa.

Then there is the most negative scenario in that the banks might just not like the project straight up and not be prepared to hand over the moola.Surely if this was the case though North Sound would have had feelers out in various lending circles making sure this wasnt going to occur and if it looked likely we would have seen action from them.

MAYBE this is why they have continued to up their holding to get some kind of board control so as to force the issue if needs be as they are worried about the apparent lack of development in the finance offtake departments.It seems North Sound is not afraid to take on such risky plays and then offload them if they can get some kind of decent profit such as they did with Afplats when selling to Implats.

BLAH BLAH BLAH BLAH BLAH!!!!!!!

Next couple of weeks trading will tell us just whats going on here and whether any of these positive/negative scenarios are likely to occur as the lack of market depth on both sides may have given the game away,either way.

Just where the market takes it from here will be dependant on who may be prepared to jump on board if a debt facility or offtake is announced.I would say there may be a few insto's/funds watching to see if/when either or both of these events take place.Dont forget this company now has S&P status and the necessary % of stock for any insto/funds will need to be adjusted up if they have a confirmed debt facility that will guarantee Perkoa development that might Because its looking as though CU has pulled the plug on their buying for North Sound.

d.