copper - will it test 4000 again?, page-17

It is not easy to have project financing with the ongoing credit crunch.

Even in good time, to put in place a project financing requires extensive due diligent, documentation and whole chain of cashflow analysis. At least more than 6 months of extensive work are required. The bankers want guarantee about the offtaker's credit risk, the offtaker documentation and so on.

As to why GRAM have given 20% - perhaps they have told PNA they want to strategic stake? I strongly believe the Chinese would be more than happy to takeover the entire company. The recent transaction - OZL/Minmetals clearly demonstrated our government's position with regard to Chinese Investment. Minmetals knew they have a great deal from the carved out OZL and hence, did not quiver regarding the exclusion of Prominent Hill.

Typically, the Chinese would not want undue attention and they like to know their probabiliy of success in any transaction. They are not like BHP - willing to waste shareholders money and pay banker fees for unsuccessful transaction. And they do not like to waste time. There are plenty of cheap assets around the world - fortunately for Australia - we are conveniently close to China vis the likes of Africa and Brazil.

Another point - equity injection boost balance sheet. Debt caused deterioration! Every man and his dog are looking for cash/equity injection - just look at NAB. I am wondering who else need capital raising.

http://www.ft.com/cms/s/0/b576ec86-761e-11de-9e59-00144feabdc0.html?nclick_check=1


JK5