There is a widely held view that the Chinese are making major investments in Copper rather than gold as a hedge against the falling US dollar. In fact some are saying that copper could be the new standard for foreign exchange. China is stockpiling copper to support its major infrastructure initiative.
When you think about about it a copper standard vs a gold standard makes sense.
Anyway, what does that mean for CMR. During the period of the DOCA China will kick off their major initiative in development of infrastructure. The demand for resources will be back to the early 2008 levels and in particular copper. Whilst, they are taking advantage of the low prices and stockpiling they will still need a sustained demand over the next 5 years while the infrastructure development is progressing.
It is very likely that CMR is viewed as a necessary source of supply. I expect that HNC have orders from the real controllers to deliver the bacon on this one (Animal Farm Pun intended).
And what I can see is once the plant is fully operational and the debt being paid off a bid coming form HNC to own the company. How cheap would it be at sat 25 cents per share.In fact, I cant see any alternative for them - they will make a bid and I suspect they are already negotiating with some of the larger holders (no the Board of course).
There is just too much evidence to support any other option than this one in my opinion. So lets think about and be prepared.
CMR Price at posting:
15.0¢ Sentiment: None Disclosure: Held
