Following up on my previous post, since the stock has already...

Following up on my previous post, since the stock has already gone under $1.20, its time to look further ahead.

This last announcement by the company on Mooiplats is the first sign of a MAJOR internal change in their approach. Till such point as there is hope, one looks for an amicable solution. And rightfully so, billions of tonnes of resources, and hundreds of millions of dollar are at stake. Its only when all hopes lost is when defiance comes in, human psychology. Corner the rat, and it too will fight to finish. Thats the combativeness CZA is now bringing to the table.

- They are comparing the unfairness of them being pulled for violations other mining cos are being let off for.
This is not the school playground and complaining to all who would listen at home did not work out even then. You still got picked upon in school the next day

- They are unhappy with the vagueness of the regulations.
So am I when pulled for one of the countless traffic rules. But the bottom line is I have to pay up every-time. Ignorance of law is not an acceptable excuse.

- Stop trying to pin this on the ministry, or its officials, or the unfairness of the situation.
The co: may be justified, but such actions will only lead to further aggravation of the situation. I personally believe they have already annoyed someone really high up in the food chain, who is now out to get them with a vengeance.


So whats next? Well the way I read their announcement, I am pretty confident that litigation is on its way i.e.
- a long period of uncertainty about basic question, will the company survive.

- What they need is a huge team of lobbyists and lawyers, but are now faced with a strategic dilemma on what to do with their hugely talented management team. How will they get paid, and for how long when theres no work to be done

- The real 'difficult part' is, till now they could raise money at approx 8-10% discount from market prices, cos the funds would be used for development of world class assets. This time they are going to go out and ask for money, so that they can litigate, so that, they may survive. Its like going to the casino and choosing Red/Black. Catch is, in the casino, you can double up, if right. Here, even IF you are right, theres no way its touching $2.30. It touched those levels but couldnt stay there for too long, even during the best of times.

There will be a bounce back of 10%-15%, to sucker in the retail investors like me, but it cannot head up, $1 will be breached convincingly before December is up.


Disclaimer: Hotcopper Disclosure asks if I own shares in the company, I do not anymore, so have checked on No position. But I want you to know that I have shorted the stock.