i was wrong about the jorc

Sorry Folks!

Sincere apologies to all for my inaccurate call in relation to the jorc, and genuine heartfelt condolences from me for anyone who has been caught up in what I can only regard as one of the biggest on market stings I can recall since electronic trading began.

I can't possibly know how everyone is feeling (and I refuse to read the threads in my absence mainly because of all of the misinformation that leapt out at me from a quick read of one random thread yesterday, - so I gave up!), but I do know how I am feeling after recovering from deep sorrow for fellow holders, intitial disappointment and disbelief in the jorc numbers, total confusion and acute alarm at my own financial position.

As it turns out the feeling, I have now after the resource upgrade is one of optimism and I put it down to continuing to do Due Diligence in the face of what has been a hurricane of confusion and disappointment.

To my credit, even though I obviously don't know enough about the intricacies of the JORC code, I have at various times advised the following

Anxiously anticipated good news seldom delivers the sort of market response that everyone is expecting, and

Avoid leverage in the market wherever possible, and

I am a long term investor, not a trader which is the reason I will be resuming lurking duties shortly as my take is that the forums are full of traders and the deliberate confusion they tend to create.

And yes, I have strenuously commented on the company's prospects and have sought for people to justify their negative positions with virtually no success. Well with nothing that has held water when we all needed to know with convincing and genuine commentary.

I do tip my hat to Peter PumpkinHead though, in nominating around 10 mt of resources and a lot of chaff, as that to many is exactly what the resource update seemed to indicate.

Well done Peter, and I am wondering how you were able to be so uncannily accurate based on the information in the public domain from which I based my commentary on. You obviousy had insights of a superior nature to the material I kept studying. Unfortunately, you never did convincingly clarify those calls of yours as I might have been able to prevent myself from losing a small fortune along with many others.


But as it turns out, I beg to differ with all the commentary that now attempts to demonstrate that Rocklands is a 'worthless' project although I do agree it is now 'worth less'....for now at least. And there has been copious amounts of such commentary not that I have read much of it, from all and sundry and a new batch of posters as well. That in itself I find extremely interesting.

My position, financially shaky as it is now, and you can replace 'shaky' with 'perilous' if you like - is that I still strongly believe that the mineable copper sitting in the ground up at Rocklands is far in excess what has been nominated in the recent resource announcement, - which is very substantial in itself - and that mining will produce cash flows more in line with what has been mentioned previously on these threads. Based on where I stand, my only conclusion about the debacle we have all endured is that the company has been targeted by an extremely well executed 'sting' operation.

The bottom line for me is that even though the resource statement didn't meet the strong retail expectations of 30 mt of 2% cu equiv, what it did do was establish that Rocklands is an extremely valuable piece of dirt. The Global Resource of over 1 million tons of copper, half of it in the measured and indicated category, represents a copper project that will definitely be on the radar of majors, as it is very real and all set to proceed straight to mining.

Importantly, in deliberating on the resource and signing their name to it, the consultants have quantified the resource but also tested it against the mining and economic factors relevant to getting it out of the ground. In effect the consultants have stated that Cudeco is all set to go to mining as far as the viability of the project is concerned. (If in doubt, refer to my commentary on the JORC code and the differences between Inferred, Indicated and Measured resource categories).

As for the sting operation:

The fundamentals of Cudeco and its Rocklands project have been somewhat irresistible mainly because of the results that have been presented for Las Minerale. After all, Las Minerale presents as a robust project in its own right. And it will be! Buoyed up by confidence and quite amazing drill results, and this is a winner philosophy, many investors have climbed on board using borrowed funds, and others have leveraged up their holdings to gain even more exposure.

The sharks that trawl the waters of the ASX would have known that retail holders were over exposed and perhaps overly optimistic about the JORC and as a consequence extremely vulnerable.

Cudeco is a stock that has proven to be a shorters paradise. Fact!

An initial strong move down amid confusion and disappointment about the JORC numbers was all it would take to start an avalanche of selling by highly geared retail investors with CFD based forced liquidations also pouring truckloads of cold water onto the share price

Once the down trend was established, encouraged by damning broker reports, (2 in particular that I am aware of) it would have been easy for the usual suspects to churn the stock and cap any moves back up while confusion reigned supreme.

From my perspective, going forward we have two things to factor into the mix

With the appointment of Azure capital to attend to mine financing matters, the share price may be in the vice like grip of serious players wanting to secure a serious chunk of the action at Rocklands. The play here would be to try and keep the share price as low as possible no doubt through the efforts of untraceable third parties. Personally I would be very surprised if anyone is able to secure exposure via placement at anything like current prices.

If we have entered a corporate window, anyone with serious designs on the company will be targeting as low a VWAP as possible over the next few months.

Speaking of which, if a predator felt ready to move after they have a comprehensive resource statement, and given that the MD supporters would all walk right now if they were to just recover losses or made a small return on their investment, an opportunistic bid could emerge at any time.

If a bid does emerge, give some serious thought to a possible sting operation that I have outlined. My posting on the churn and capping of the stock has suggested that big players had an agenda in linmiting rises, so why wouldn't they have one last roll of the dice to shake as many share holders free as possible in an attempt to massively destabilize the company.

I say all of the above because I remain convinced that mining will reveal the sort of cash flow projections more akin to a 30 mt @ 2% Cu equiv mine for 10 years. Either that or the contacts I met on my visits to Rocklands, all of which I have the greatest respect for as both mining professionals and people of the highest integrity, have just wasted their time and energy over the last 4 years.

The following is pivotal in regard to where I stand.

The competant experienced staff at Rocklands have all been working passionately and energetically in remote and difficult living conditions on a project that they strongly believed in, and still do believe in, with the conviction it become one of Australia's major mines in the not too distant future. And from what I can tell, nothing has changed execept their resovle has strengthened further in bringing Rocklands into production as quickly as possible.

Go figure!

In saying that I was wrong about the JORC, (yes, that is a pretty obvious admission), I put it down to my ignorance of the procedures, rigor and precision that go into producing a measured resource using a code that is not greatly suited (IMHO) to a complex, variable unique orebody such as Rocklands. The numbers inherent in what has been published however, definitely aren't shabby. Far from it!

Rightly or wrongly I still maintain that I'm correct about Rocklands in that ultimately it will deliver for those who are able to see beyond current the train wreck. And in delivering, I am talking about robust returns from mining in excess of that which might be calculated from a 30 mt @ 1.24% Cu equiv measured and indicated resource.

Sure we are down for the count, but I reckon we have taken a 'low blow' beneath the belt. And even if the referees haven't noticed it, we are going to be ok because the company is still in a strong position and holds all of the aces with 100% of a project that still returns superior value for copper hungry investors, than anything else currently on offer.

Cheers
Nev