mt fitch uranium downgrade, page-6

Oly,

Your obviously a smart bloke but it still hasn't dawned on you the ironic and oxymoronic referencing of CMR to the ARK? Ahhh.... ain't love blind.

A lot of people got sucked into the whole CMR romance during the intoxicating low-risk party of '06. We woke up in bed with this scrubber, beer goggles off, wondering what the hell we were thinking and how to ditch her without having to chew off our own arm.

What is wrong with this statement?

" we are IMO amongst the BEST and SAFEST placed given our relative independence from debt and near term cashflow start. WHAT IS WRONG ??? WHY ISNT CORPORATE SURVIVAL AND STRENGTH BEING ADDRESSED AS A PRIORITY CONSIDERATION."

Hardly independent from debt, currently drawn down first $25M. Near term cash flow assumes mine commissions over next 6-9 months successfully. Production and recovery problems with complicated leaching process could mean a sustained period of NEGATIVE cash flow and increasing debt trying to get black box to work. Increasing debt currently serving free-carry 50% JV partner.

Hardly safe when it has delivered or proven nothing of substance and literally EVERYTHING the company is valued upon is flying on a wing and a prayer. Oxides, Mt Fitch, Browns Sulphides, exploration potential are ALL risk plays with some chance of success and some chance of failure. Recent track record casts doubt over managements ability to generate value out of any, including Sulphides which even the ever optomistic Huntleys gives a 50% chance of go ahead. Remember also Browns is essentially a low-grade, processing risk play in a high aussie dollar, maybe lower metal price market.

Corporate survival and strength is exactly what is being addressed at the moment. Money is staying with (relatively speaking) proven high-margin producers with competant management and debt comfortably covered ... no-risk (eg OXR, BHP, ZFX). Money is leaving juniors in development phase especially ones with higher technology, processing, delivery and management risk (eg CMR).

Down-grading of Mt Fitch resource is latest example of risk in valuing early stage project. It has become abundantly clear to everyone (as it was to GT etc when he sold) that at >$5 CMR was priced for perfection and infact a very poor risk-reward play.

CMR was never an ARK. It was and still is a high risk play with comensurate upside. Those looking for safety from the storm would be well advised to stick with blue chip resources secured by operational world class deposits.

I dream of a takeover but the HNC 50% project control makes that VERY, VERY unlikely before sulphides is approved, built and successfully operational (in which case it will no longer be at bargain prices). Only a stunning U discovery would put us on the radar but more than likely we'll only find more cunning stunts.

Anyway keep posting. I find your macro illuminations sobering, strategic thinking enlightening, enthusiasm supportive and trading experience rewarding (other than falling in love with CMR :)

Goodluck.