informed market??

We have a situation here where numerous people seem to "know" that the company has got exciting results before assays are received. For example: "About 20 heads looked at the cores comming out of the ground and being split...like nearly 1 klm of core. Leaks and wispers abound." (sic)

The company has set a pattern of commenting on what they see in the hole: eg 23 November 04 release where they say: "Weak sulphide mineralisation, consisting of pyrite and lesser chalcopyrite (overall estimated at LESS THAN ONE PERCENT SULPHIDES) was intersected between 558m and 587m, and 689m and 710m depth and is currently continuing."

We could assume that "pyrite and lesser chalcopyrite" means something like two thirds pyrite, one third chalcopyrite. If that were the case, then that means that the sulphides may be 0.3% chalcopyrite, which would be 0.1% Cu. Anomalous, but not ore grade.

Also, the Chief Geologist's presentation at the AGM showed some core photos. I would not expect significant Cu/Au values from those core samples. They may well be anomalous, but certainly nowhere near the ore grade of 3% Cu, 1 g/t Au that they suggest in their NPV numbers on the last slide.

The most recent comment from the company on the core is from the 25 November announcement where they state:

"Drillhole MS 1 is currently at a depth of 783m, and is drilling ahead in hematite-altered breccias. The thickness of the breccias intersected is now 225m. A further 100m of drill rods have been obtained and, subject to the capacity of the drill rig, it is proposed to continue to 900m.

As previously reported, the breccias consist of a variety of matrix and clast support styles, with clasts of metasedimentary and igneous rocks within a hematite-dominated matrix. A variety of clast types, and evidence of repeated brecciation is evident, and sericite and silica (quartz) alteration occur throughout. However, volcanic rocks and tuffs within the breccias have now been identified. These rocks are very similar to rocks known from within the upper, unmineralised parts of the Olympic Dam deposit (see Figures 1 and 2)."

These are the last meaningful comments from the company. On the information given so far, it is highly likely that the assays will be low - geochemically significant, but nowhere near ore grade.

For people to be excited, they must be seeing something else in the core, and that indeed seems to be the message coming across from various people 'close' to the company.

Now, if I were a director of this company, and I had set a pattern of reporting what we see in the hole, including photos of core samples (none of which is exciting) and then further down the hole we see 'massive sulphides' - chalcopyrite, bornite, chalcocite - I would have a responsibility to release a report saying something like "core recovered from the hole since the last announcement on 25 November has evidence of copper sulphide mineralisation over intervals from ......m to ....... m. Our geologists estimate that the grade could approach ore grade, or better it. Assays are awaited."

Or, if, as has been suggested, there is U in the hole, then the geologists would probably know that already using geiger counters and the like, and the company would have reported that fact.

The company hasn't done that. In my view, the only reason why they wouldn't is because they are NOT seeing ore grade sulphides. Nor are they seeing any evidence of uranium mineralisation. They may well be seeing rocks that look very like the rocks hosting or associated with the OD deposit, but not ore grade sulphides as is being suggested by various posters here on HC.

The recent prospectus discloses no further information on the results, but does say in relation to Continuous Disclosure.

"The Company is a “disclosing entity” for the purposes of Part 1 .2A of the Corporations Act
2001. As such, it is subject to regular reporting and disclosure obligations. These obligations also
require it to disclose to ASX any information of which it is, or becomes, aware concerning the
Company and which a reasonable person would expect to have a material affect on the price or
value of securities of the Company. Copies of documents lodged with ASIC may be obtained
from, or inspected at, an ASIC office.

The Company believes that it has complied with the general and specific requirements of ASX (as
applicable from time to time throughout the 12 months before the date of this Prospectus) which
required the Company to notify ASX of information about specified events or matters as they
arise for the purpose of ASX making that information available to the stock market conducted by
ASX."

Clearly, the directors are conscious of their responsibilities to disclose information that is materially price sensitive information. As well, remember two of the directors are lawyers.

My conclusion after reviewing the facts again is that they have exactly what they say they have. That is rocks similar to those at OD, but no suggestion of ore grade intercepts. In the absence of further information from the company, we can only conclude that they are telling us the truth, and that there is no need to report ore grade sulphides because there aren't any.

How will the market respond to low assays? Possibly not badly if the company continues to assert that it has encountered rocks similar to those that are associated with the OD deposit.