musings

Thanks for the insight Mookie. Hope you got a few decent goodies in the AIM show bag!

A few points that I thought I would throw into this forum:

1) Additional Financing - in the current market there is no way AIM will be able to raise the debt capital with liquidity being as tight as what it is. In the domestic market (OZ) where things are a heck of a lot rosier than the Nth American markets, banks are not only hesitant to lend to customers but they are also increasingly charging ridiculous spreads to their peers. The RBA has tried to deal with this domestically by increasing the list of eligible securities in the repo market to inject liquidity ... however in my humble opinion this is only a temporary solution. The only real answer for global money markets is for the US Fed to cut by 1/2 percent on Sept 18. If they don't cut ... well frankly that promises to offer some fairly interesting (and yet scary) entertainment. Even a 25 basis point cut will more than likely not be enough to bolster confidence in the global money markets .... however I digress.

With regards to the balance of finance we will either see 2 outcomes being (1) delay in debt financing until things calm down (might I add that this approach is not an indication of managements ability or lack thereof - putting a favourable debt deal together this month would be a Houdini-esq achievement) or (2) equity raising again (which would be awful for us). Personally I think we will see AIM chugging along in the interim for the next couple of months chewing through the cash at bank to develop Perkoa until money markets calm down enough to get a deal across the line.

2) Drilling Program in Perkoa - Interesting that they have finished this program so early however an extension of resource can only be a good thing for the price going forward.

3) Drilling at Mokopane - interesting to see that they are going to do this. Perhaps given instability in the money markets this represents a viable alternative to solely relying on debt. Prove up the resource and flog it off (should have happened long before now). However the reality is that they will encounter issues securing a drilling rig just like the probs they have had getting one on the ground at Mumbwa. Another concern I have with this is whether AIM's cash position is such that cash can be allocated to this program when there is no guarantee that they (1) will be able to get a decent price for the asset and (2) not chip through too much money earmarked for Perkoa. All in all this will be a bit of a balancing act .... one that hopefully (?) West Wind won't try and solve by issuing equity as PR is constantly indicating.

4) PR's comments - I'm a big fan of people posting their thoughts and all that kind of thing because everyone has a unique perspective on things ... all of which are perfectly valid. And clearly PR you are far more intelligent and well placed than I am. One thing I personally don't appreciate is character assasination or pig-headedness. Generally your comments are thought provoking and I usually take a fair bit away from them. However this forum (as far as I understand) is to share information and viewpoints ... not to brow beat people into agreeing with certain positions. I know I know ... I'm being a bit precious however I think it is a pity that the delivery of your analysis is such that it detracts from it's substance. Just a personal viewpoint.

Good luck with exiting your position and for the record I don't disagree with your rationale. For me (however) I have an entry of 6.4c so my downside is quite limited and frankly I believe that once the global markets calm down (which they will) and zinc price stabilises (which it will) and the US Fed cuts the cash rate (which it should) and the US economy stabilises (which it should) AIM will start to regain the lost ground. Again ... one man's trash is another man's treasure.

Good luck all.