makes for interesting viewing

Thanks for the viewpoint D. After sleeping on it I think that perhaps it’s not all doom and gloom although I will be interested (and a touch nervous) to see what the reaction of the market for such an out of left field scenario. One advantage of not using convertible notes is the removal of the requirement for Aim to pay any coupon payments to note holders which can only free up the cash flows of the company early on in the piece. This should in turn enable Aim to discharge the 80 Million in debt faster and achieve free cash flow thereafter.

Regarding hedging, I would have thought that hedging a fair proportion of the production out as far as possible would have been a prudent approach to establish a base level of earnings to (a) discharge the debt facilities and (b) lock in healthy zinc prices for a fairly long time. An easy way they could not lose out on any blue sky component of their production is to ramp up production quickly and sell the surplus levels on the open market. Just would make sense to me to hedge a large proportion of the zinc at these above historical levels in order to preserve some healthy margins.

North Sound and Brewer must be watching all this with interest. I wonder if they had any idea prior to buying that this was going to transpire?

The end result is that if this is handled correctly this project should be effectively a cash cow from which other acquisitions can be made (something better than Mumbwa would be nice as I think this is a project that AIM will end up walking away from given the very ordinary drilling results so far). Seems they might be leaning towards pulling back from this project given they are only going to complete 8 of the planned 11 drill holes there. One would imagine that if there was anything of any value there, AIM would continue drilling despite the presence of ‘very hard rocks’.

Am holding and will continue to hold. Anyone contemplating taking a position should definitely do their homework though.