facts/risks

I am happy for true the believers who made a dollar or so on Friday but again I stress the facts and risks associated with the stock.

1. It is highly unlikely that any of the 6 court cases have been resolved. If any had been finalised against the locals the Chilean newspapers would have had press releases plus ADY would have had to make an announcement.Sighted nothing to date. Michael Clarke would have made sure of good Chilean press in his moment of need. Therefore a court win is unlikely for some time.

2. Cash from Rincon was to pay all outstanding bills. These included Hawkswood plus interest, YA Global plus interest, Australian Investors, Besalco for two outstanding invoices, staff who had been retrenched at Vallenar and Rincon, legal bills, operating costs etc. No/little cash would be left after bills are paid.

3. Mining at Vallenar has stopped. Besalco have moved out staff and equipment.Nothing can be shipped until port opens March 2009. There is no ore at the portawaiting shipping. Note also no update of disputations resolution on Besalco's internet site.

4. Due to late payment performance by Vallenar I would think that any new mining contractor would require advance payment (but Vallenar has no cash) or a watertight guarantee before starting to mine at Vallenar.

5. We were told that no-one including Wisco and Shougang were prepared to advance funds to Phil Thomas only a few months ago. Nothing appears to have changed that scenario. We understand that Wisco wants a joint venture only once ADY secures 100% of Vallenar which could be months away if another court case does not get in the way. Shougang have consumated deals with other companies.

6. In this tight credit environment it is highly unlikely that ADY can sell its other main asset in Bulman.The Board indicated at the AGM that it could not find a buyer.The resource was also too complex I recall.

7. Sale of Vallenar back to Leonardo Farkas Klein or to Santa Fe could be on the cards as part of a litigation resolution. Allows ADY to exit all overseas investments and focus on Australian opportunities.

8. A takeover of ADY is highly unlikely. Who would want to take over a company with so many litigation cases and an asset that has produced only 250,000 tonnes pa for the past three years with little if any profit?

9. ADY has no cash flow from any source. How then can it survive ?

CAPITAL RAISING

we may see a capital raising at 1.5c-2c (after the sp conveniently pushed via successful court case speculation ). New funds would be used purely for ADY's survival, payment of directors fees/salaries and maybe starting up Vallenar once again.

I guess....get set for another billion shares to hit the market at 1.5c and then a consolidation !!!


Monday should tell all after a delayed speeding ticket is issued. ADY needs to come clean real soon on the sudden 100% jump in shareprice.


Forgot to mention that as Vallenar Iron owes Wyndham Ex and ADY some $50m for unpaid loans and as it has no cashflow it may go into administration/receivership. I think that is what Besalco was pushing for when bills were unpaid.Unsure of implications for both Wyndham and ADY.


I am just looking at a stock ( ADY) that has cost me heaps due to PT failure to secure just $20m of funds during 2008.

" Debts will be paid as they fall due" is what I keep reading in past announcements.