high grade zone, page-17

Hoots,
If you want to compare CDU to SFR please at least attempt to compare apples with apples.

There are many differences between the two operations, some of the more relevant ones I feel are:

1 Resource - These are comparable based on drilling results however much of SFR's resource requires underground mining which is much more expensive.

2 Location - CDU is near existing infrastructure whilst SFR is isolated and will always rely on road transport - again more expensive

3 Plant - CDU are building a 3mt plant, SFR's plant is 1.5mt.

4 Construction - CDU will be close to 3 years from granting of mining lease to first concentrate production, SFR took only 21 months to achieve the same. But it seems to me that CDU's plant is far more complex and is twice the size.

5 CDU has a greater volume of shares on issue but SFR has greater debt.

I don't want to get in to the semantics of arguing the merits of these or other factors - we can all determine these for ourselves.

My point here is that despite these or other differences these are two fairly similar operations but if the share price is compared AT THE SAME TIME OF DEVELOPMENT then something simply does not add up.

When SFR commenced open pit mining in April 2011 its share price was $6-$7.
When SFR produced its first DSO in Feb 2012 and shipped it in April 2012 its price was $7-$8.
When SFR produced its first concentrate its price was $8.
It now trades at $6 and is making investments in Canada to shore up future earnings.

And in comparison during the very same development phases CDU trades at sub $2?

Also I note that neither of these two companies have paid a cent in dividends.

Either one of these operations is significantly overvalued or the other is significantly undervalued.

So, whether DSO sales are 'factored in" or not seems to be highly irrelevant.

IMHO the share price without cash flow to dominate it is more to do with WHO has interests in the operation rather than the true economic value of each operation.