more feedback from agm

with permission from an informed and valued source who attended the AGM and site visit......

The Rocklands site visit was fantastic as those who were able to attend will also testify. Everything is coming together beautifully. A major priority seems to be fixing/upgrading the resource statement and yesterday's announcement was a second salvo in Helman & Schofields direction. The announcement suggests to the casual observer that their theoretical modeling is somewhat limited in trying to accurately assess the Rocklands resource. The first bulk trial that returned 4.3% pure copper was probably the first salvo suggesting that something doesn?t quite add up here.

The current 30 tonne bulk trial of all types of ore, if successful too, will provide further evidence that the JORC has misrepresented the resource and in any case the trial results will form the basis of the DFS targeting the first 10 years of mining. The first 4 years will most likely be dealing with average grades of 3 to 4% and will result in very substantial cash flows. It is not difficult to come up with $4 dividend numbers and the MPS optimistic valuation is actually looking a tad conservative in the light of discussions in and around the AGM with people who have a clear idea of how Rocklands is shaping up.

All going to plan, we can expect bumper quarterly dividends and with a HK listing and some exciting exploration success (there is a lot of exciting stuff happening on the exploration front), eventual big numbers for the share price are a distinct reality..... not pie in the sky.

The planning by management has been brilliant with all infrastructure requirements being successfully secured well before mining. That has been an incredible achievement by the company and its management team as per the AGM presentation. One bonus with the slight delay in the EIS is that the company will get a little more time to update its resource prior to a mining license. What is needed is extra drilling generally as well as targeted holes into existing flat spots where additional information is required to remove the uncertainty that the consultants have focused on. I am still thinking that the resource will end up much closer to the company's in-house numbers of around 30 mt @ 2% than the 30 mt @ 1.24% figure offered by the resource consultants. In which case we can expect a share price much closer to $8 and the company to be in a much stronger position should a cheap bid emerge.

The next couple of months will be quite telling on the corporate front with Xstrata along with a few others, given an opportunity to make a friendly offer for participation through the Azure controlled Data Room exercise ( From my perspective we would do well to keep the native copper, and others can have the low grade stuff) otherwise we could do a deal overseas and probably list on HK at the same time. Finance doesn't appear to be a problem at all. In fact, it never has been.

It is interesting that Xstrata were one of the first to have a peek at our data, and their immediate response was to go and drill on the Rocklands boundary and to try and cover up their tracks. If Xstrata or whoever do try and take us over, it would have to be with an offer of close to $8 where a lot of holders could walk given that we still have 2 years before cash flows are established giving rise to immediate dividends. If $8 was to deliver control to an aggressor I'm thinking that it would still be a very cheap acquisition ......if successful, and that is a BIG if. But in any case, the company appears to be well prepared for such an event with a few things up its sleeve so it would make for extremely interesting times.

All in all, I'm very relaxed and the JORC take down is looking more and more like the orchestrated sting operation that I have been saying for quite some time. Certainly Vanguard came on board with no additional info than was available at the time of the JORC release, so why no-one else was prepared to do proper due diligence is extremely suspicious. When you see what is going on up on site and the enormous progress that has been made since 2 years ago, and you read the still lamentable press about the company, you realize that something is very wrong and that the only explanation that makes sense is that the company is being deliberately targeted.

I am of the view that anyone targeting the company has left its run a bit late for a cheap bid, as the company now appears to have all bases covered. Then again a GFC2 would tip the scales back in favour of an aggressor, so an expect the unexpected approach (which can be both good and bad) is still the way to play this. Ultimately though, if we get to mine Rocklands, I am convinced that holders will all be extremely happy with their investment in this company. As it happens, I am happy right now and have been for quite some time even though we have had a shocker of a share price! The strategy against the company appears to have been to get the share price down low by churning stock between related entities, and to terrorize and confuse holders at the same time. But it doesn't seem to have worked as most significant holders have remained rock solid. Figuratively speaking, a very heavily weighted punch was landed on the chin of the MD with the JORC take down, but he has staggered back to his feet very strongly composed and more than determined than ever to deliver full value with the Rocklands project. Keep in mind that the MD is cashed up and still holding all of the aces as well. One thing is for certain though, and that is that anyone wanting a major high grade copper asset won't be wanting the company to get into a mining situation and to enjoy bumper returns as that makes shareholders extremely resistive to cheap offers. I reckon that we will definitely see a bid at some stage but it doesn't mean that it will be successful.

Don't forget that most of the hard work has already been accomplished and that things could come together very quickly now, on a number of fronts, despite the attention given to capping the price by the constant churning of stock. Vanguard in effect, are doing the job of the Buy Back and while they may be letting some stock go to keep a lid on things, they may soon have to allow the stock to go higher in order to pick up the rest of their requirements as the cheap float has probably run out now. Keep in mind also that the MD has always said that he is not prepared to fund the mining project at ridiculously cheap levels and anything above $5 might now be the trigger to start dealing to de-risk the project. Such an event may spell action and with a capital A. The constant calls for massive dilution at the time of the JORC are looking a little bit remote now and the panic generated back then never did see the $1.20 share price target. Thankfully a bit of commonsense seems to have prevailed.