if copper is the real rmg play

If copper is the real RMG play with the firming up of a potential economic resource at Mt Coffin, if that is what management are doing behind the scenes, as we are all in the dark, then certainly what is happening with CDU must be a glowing beacon of where a company can go. CDU is a brilliant story and I am not suggesting that RMG's Mt Coffin is anywhere comparable. However, Mt Coffin was copper producing mine in early last Century and one wonders what RMG has come across.

Anyway, here is a great article on CDU and copper from another poster. Enjoy the read:

MiningNews.net

Monday, 21 September 2009


IF you’ve been watching gold over the past few weeks, like Dryblower, then you’ve been looking the wrong way. The real game in Australia today is copper, and the surprise leader is the once-maligned CuDeco which is on the verge of becoming a $A1 billion business.


If anyone had suggested that three years ago, he would have been laughed out of the room.

Back in 2006, CuDeco was being soundly rubbished because its management team, led by the sometimes overly enthusiastic Wayne McRae, had talked about making one of the world’s biggest copper discoveries at the Rocklands project in western Queensland.

Unfortunately for Wayne he lacked the technical data, especially drill results, to back up his claim and the stock exchange famously forced him to downsize his resource estimate.

Well, look again. Wayne is delivering on his original promise. He is running one of Australia’s biggest drilling programs with up to 15 rigs onsite, and he is getting the copper grades and volumes that might entitle him to soon say: “I told you so”.

For CuDeco shareholders, whose company has been a silent star on the stock market over the past few weeks, this will be a satisfying victory.

They have endured a long time in the wilderness, watching their shares slide from a peak of around $5 back in late 2006 to a low late last year of 93.5c.

Since bottoming, along with the rest of the market, CuDeco has been marching strongly upward, hitting an all-time high on Friday of $6.35, a price which values the company at $877 million, and Wayne’s 12.24 million CuDeco shares at $77.7 million.

Another couple of dollars on the CuDeco share price and Wayne graduates to the ranks of the $100 million club, CuDeco becomes a billion-dollar business, and the rest of the world understands why Dryblower is revisiting CuDeco.

One of the reasons why most armchair observers have not noticed CuDeco’s return is that other copper explorers have been hogging the headlines.

Sandfire, the vehicle which reincarnates Miles Kennedy and Karl Simich, has been the copper favourite in Western Australia thanks to its Doolgunna discovery.

Rex is the copper champion in South Australia thanks to its Hillside discovery on the Yorke Peninsula.

Marengo is the Papua New Guinea star thanks to ongoing drilling at the Yandera project and how it attracted George Soros, one of the world’s richest investors, onto its share register.

It’s the background noise of discovery by other companies which has drowned out news of the latest developments at CuDeco and Rocklands – plus the fact that the copper price appears to have stalled after China’s rapid re-stocking.

CuDeco’s premature promises of 2006, plus copper discovery news from elsewhere, and the “peaky” copper price, has also hampered a clear look at the latest events at Rocklands.

However, last week Dryblower found the time to trawl through a flood of fresh reports from CuDeco as its 15-rig drilling program delivered an avalanche of core, and assays.

In a nutshell, CuDeco has expanded the footprint of Rocklands with new discoveries such as one at Solsbury Hills, and taken the whole structure deeper with a hole that encountered a 200m wide alteration zone rich in copper-bearing minerals.

If any single event re-ignited CuDeco it was the September 3 announcement of the deep hit, and the fact that the company was drilling ahead with a hole that had passed the 850m mark, a monster by modern drilling standards.

But, look back at early September and you will see why CuDeco slipped beneath most radar screens.

That was the time when:

1. Soros snapped up his stake in Marengo (September 1) and the stock ran from 10.5c to 22c in a matter of days.

2. Rex reported a drill hit of 151m at 1.5% copper (September 1) and the stock ran from $1.63 to $2.60 in a matter of days.

3. Sandfire reported a 93.6m drill hit at up to 6.6% copper (September 2) and the stock ran from $1.65 to an all-time high last Friday of $2.72.

By now, you get the picture. Oodles of fabulous copper discovery news, better than anything from the goldfields, has drowned out the company which probably has the best news of all, CuDeco.

Past premature exuberance will have played a part in suppressing news media interest in CuDeco, which is understandable because even the sleepy chaps at the Australian Securities Exchange thought the company was saying a bit too much, too soon.

Expect the sins of the past to soon be forgiven. CuDeco is back. It’s about to become a billion-dollar business and Wayne McRae a $100 million man.