cudeco shorting activity, page-272

sholtz,

CuDeco is continuing with a drilling program at the same time as constructing the processing plant, port and rail facilities.

Whilst other companies have stopped exploration entirely, CuDeco's drilling at Rocklands South is proving up a resource at depth to, in the future, provide a supply of rich ore to the processing plant either by way of an extended open cut or by an adit from the base thereof. Fairfield will be another source for further ore supply.

Should finance have been critical, exploration drilling would have been shelved as CuDeco has found enough ore already for the next 30 or 40 plus years depending on how big the crushing / processing plant becomes .

Bear in mind that the exploration program on Rocklands has at least ten years to go . Once the profits start flowing, expect to see much expanded drilling . I am thinking particularly of the large south west corner anomaly and the targets on the new block which beckon.

Talking of profits, Wayne McCrae , by capital raisings at good prices and by the tactical use of buybacks, has managed to limit shares on issue to approximately 205 million shares and CuDeco is not like some companies I can think of that have a billion shares on issue.

This is an important consideration when profits are being distributed. A profit of a little over $20 million dollars would see a dividend of 10 cents a share and, unlike most other companies, CuDeco will pay quarterly dividends.

I would question your time frame of eighteen months. CuDeco is looking now at sales of direct shipping ore and native copper . The processing plant is to be fully operational in the first half of next year[ maximum 9 months away ].

CuDeco could not have dreamt of having such favourable weather conditions for the construction phase.

It should also not be forgotten that the offtake agreement with Oceanwide for the processed ore provides for payment once ore is loaded at port.

Thus there is no waiting ,no delay in cash flow.

Future profits will be determined on an increase in the throughput of the processing plant if , after examination, it is decided viable to go to between 6 and 15 million tonnes per annum. Wilgar will also be mined at a future date and contribute to profitability.