is march the turning point for caz?, page-13

Hi Freeprom,

In regards to china, they only are influential in africa when they are developing their own operations - SDL, of what I understand (other than speculation and CITIC GROUP), has no relations and interest with china and thus the chinese will not help SDL. Australian west africa companies are very different to chinese companies as australian companies do not place troops in china to extract the ore as do the chinese; this is why, as you probably know, the chinese are so influential in Africa. Therefore, as the australian rule of law is very different to the chinese, many australian west african companies have huge political and legal risk involved unlike the chinese. More risk = greater return.

Nonetheless it comes down to fundamentals, SDL has a huge deposit 30+ years and over 65% fe grade average which means that when they begin production there is significant upside for SDL - though, there still remains that risk of whether they will produce as the govt could step in at any moment if they are not happy or change a policy etc. CAZ on the other hand have a 10 year project with mediocre grades @ above 55% average in a potitically stable environment. There remains little doubt that caz will produce and its development plans are in the final stages - much more closer than SDL. The Australian mining tax will impact the bottom line but not immediately - CAZ will need to earn more than the risk free rate before it is taxed (though this isnt very high). I believe that the mining tax will not stay for long as it will continue to be a major campaign item into the next election.

CAZ has huge upside and I would expect that there is more upside to be made via CAZ in the short term than SDL.