mumbwa domun wilf, page-2

re: mumbwa domun wilf.reasons to hold.sell As much as Aim lends itself to an AUM performance I dont think it will happen.AUM's chart is interesting from the standpoint that it is extremely unusual and its looking to me that there are really only two options for AUM's sp now and thats to keep being rerated or to come back to reality with a thud.

Imo I wouldnt like the risk of the later atm with Aim because the best strategy for Aim holders is to at least hold for a year so as to gain the best cgt benefit one can get.I supose to this end I am more patient than many others as this is MY intention.As some others have pointed out AUM has a very long way to go prior to production(if thats AUM's intention with such a resource) and the chances of it holding such gains must be pretty remote.However the sheer potential size of AUM's resource may just keep it well up there if the continuity is proven as someone large will more than likely take them out.

But this is digressing from the subject of Aim.

I think anyone thats doubting Aim's commitment to Perkoa has to ask themselves several questions and if they arnt satisfied with the answers they give themselves then it may just be time to sell.

Some of the questions I ask myself are

*What has changed since Mooiplats?

PERKOA and to a much lesser extent Mumbwa.

To this end one has to ask oneself what they think will be the end result financially of Perkoa given the current trend of world growth and what will be required raw material demand-wise.Imo its as obvious as the nose on ones face,and goes a large way to why AUM has had its stellar performance of late.To digress a little again I'm starting to think that such momentum in AUM may well have a roll on effect to many other mining specs in base metals.In fact one could say the overall sell sentiment in mining specs has turned the corner.But we will see.


*Have any negatives taken place with project development?

I cant think of any.

If you want to include a lack of tranparency by the company via non communication to the market then thats your perogative and must be included in your risk assessment of your investment in Aim.

Bare in mind imo this is just the time frame for brokers to be manipulating a stocks sp in the overall scheme of project development and this is just the sort of thinking that they will be praying on to pick up stock cheaply.Its just prior to some main annmnts that will have obvious consequences for the eventual sp gained if the parameters within the annmnts come within the boundaries of the expectations of those currently accumulating at 12/13c.

This is where you ask the question of why the support of the sp at current levels and probably more importantly why the capping of the sp.

I had my doubts that the 13.5/15c depth was capping a few weeks ago but I now believe it is without a doubt.Far East Capital put a valuation of 12c on Aim and it has solidly held this since correcting from high teens a while ago.When ever the buy depths appear to be weakening they suddenly take a turn for the better,classic behaviour of a broker/s intending to attract panic selling.

*We are in an obvious period for annments to create buying frenzies,such as AUM's today.Hence the next question,does one want an annmnt right on top of another company making such annmnts?(not to mention the downward sell pressure of tax loss time and further possible sell pressure from options conversions)

The Asx is not a huge investment community(spec investment wise)and can only absorb so much news and when it is news that will require one to actually sit down an do some fundamental analysis prior to chucking hundreds of thousands of investors cash into it(rather than just looking at drill results) then an sp rise is not to be expected right on the back of the annmnt.

However that being said,the potential profit from Perkoa may already have some keen eyes focused on the offtake/finance outcome and if the annmnt comes within their calcs then the sp may well take off towards the project NPV of mid to high 30c.UK brokers have said so and I seem to remember these same brokers nominated moves in Aims sp on the back of the bfs news in late 2005.

Thise are just a few basic questions I ask myself as to why I continue to hold Aim/Aimo.

In the end a lot depends on your investment strategy.If your in it for income gains and short term investment then its probably not a good stock to be in atm because you are primarily relying on an annmnt that comes out and meets market expectations right of the bat.This is why high grade drill/large resource annmnts(as much as they are only inferred)are jumped on so frequently byt he market.

If your in it for the longer haul towards eventual production then you'll know exactly why your in the stock and not be worried about such short term eventualities.

d.