*warning* this will be one big *** post.Hello Doc777, thank you...

*warning* this will be one big *** post.

Hello Doc777, thank you very much for taking the effort to post something positive in reply. My post seemed logical to me, but when you are so new to something you have doubts, especially when there is so little feedback with this medium, positive or negative. I was beginning to wonder if anyone could see what I was saying.

I also value the opinion of respectful people much more greatly as I believe the greater your intelligence, the easier it is to understand the logic and importance of treating other people well (although there are exceptions both ways obviously)

Mr Winchester, thanks also, I will do more research. I had heard that Dalmacia is "only" 6km away but taken in context of the current drive this makes more sense. I think we all agree on the last point.

Paul1.72, thanks for taking the effort to answer so much. As usual your post was logical, unbias and with the greatest economy of unneccesary writing. Kind of the opposite to my approach but each to their own ha ha.

Somethings I agree with you on, some I disagree, and some I found enlightening.

Generally I seemed to get the impression similar to that of my own, hope I am not putting words into your mouth. If grades improve then it will be a great situation, but it all hinges on this caveat.

I understand nothing is certain, and my only main fear after this quarterly is if grade does not improve, just as my only fear going into the quarterly was if grade was too low due to the mining through the gap phase, but I believed the positives would far outweigh this.

But it is all risk/reward, and I believe the risk of grade maintaining at such low levels is slight and the reward is huge. $1.72 is an indication to me of how the situation will be if grades improve to historic levels so we can base our decisions accordingly. A lot of sharetrading seems to be trying to predict the future, so an actual numerical forecast is, IMO at least, a big help when assessing risk/reward and allows me to see a numerical figure on the future situation provided the grade recovers.

Personally, I was pleasantly surprised it was that low on the higher grade, and was wondering if other people were surprised also. I guess I was not factoring in how large a percentage drop ore grade was, which is again why I found it personally beneficial to view a numerical forecast.

Onto the replies to the replies!

2. Based on the fact the last 6 reports had grades from 1.43 - 1.72%, and this grade was only 1.08%, do you believe a 1 out of 7 grade is not indicative of the average grade and is more likely to be an abberration? (1 out of 7 folks)

Ans - Looks like a abberation but it is always possible it is not. The issue really is if the grade does not move back to 1.5% over the next 6 months then this means that the resource and mining plan are wrong. This would be a huge credibility issue and could rightly cause investors to say we just dont beleive anything this company says and sell out. The next quarterly should resolve this issue but dont expect a grade of 1.5% as the company has said they dont start mining high grade ore until may

*Agreed, see above. Thanks, I'm not expecting a grade of 1.5% but am expecting a significant improvment.

3. If so, would you have been happy with a result of $1.72 cash costs, reduced from $2.37 from the previous quarter, especially considering the selling price of copper has risen, um, I will estimate 50c, since the last quarter? Some of this due to an increase in costs from the industry as a whole and especially Chile, producer of 40% of total CU. Take off 50c from both sides of the equation, sale price and cost price, and you are left with $1.22 cost price.

Ans - If the unit cost had been 1.72 in the march quarter the market would have been very happy as the trend was down. It did not happen so it is not relevent. If the cost for the current quarter is $1.72 then this would make the market very happy.

*Agreed, I think we all would have, question was semi-rhetorical I guess.

Ans -Yor selling price logic is not sound. You should not mix up costs and selling prices. The cost is the cost. The selling price is relevent when looking at margins and profits but not to costs.

*Cost is cost, profit is profit. I am not saying the selling price increase lowers the cost. What I am saying is, why factor in one but not the other? Why is zero value given to the increase in CU price? From a pure, current situation profitability, how much moolah we pulling in at the moment perspective, $3.90 - $1.72 = $3.40 - $1.22. It is not this pretty in reality I know, but SOME value should sure as hell be factored in to this and I was trying to show the equivelency of the increase in selling price.

I would also like to add, I believe selling price is relevant to costs, especially if it is increased as an industry standard and these costs are passed directly onto the consumer, whereby the quantity of sales is completely unaffected by this. A long long time ago, I would imagine average costs would have been, I don't know, just having a stab here, don't lynch me if I'm wrong, 10c and selling price would have been 20c. External factors affecting both cost and selling price, in this case inflation, exacerbated the figure amount of both, but is relatively irrelevant to $1.00 and $2.00 as the ratio is the same. I know in this case we are dealing with ratio and in ours we are dealing in difference but the point being, the two are relevant to each other. Look at the US dollar's influence, a factor cited by TMR.

4. Do you believe costs will decrease in the future due to a settling of operational activities now that ramping up has been completed, improved recovery rates, or any other factors?

Ans- Logically when you move from start up to steady state costs should reduce. Recoveries should also improve. It would be very disappointing if this did not happen

*I concur. Glad someone more knowledgable agrees.

5. Would the tripling of production constitute management "actually doing something instead of just talking things up" at these costs and these profits per pound?
Ans - Dont understand the question
6. How about the quadrupling of production?
Ans - Dont understand the question

*Ore processed is currently tripled, and will quadruple (no not 12x ha ha) by my understanding from Project 3 and 4 thousand respectively. In the hypothetical situation used throughout this thread, as long as grades remain the same I assume production will increase at similar levels.

People argue management aren't making progress but to me it seems this should be considered massive progress. Again, all seems to hinge on ore-grade, low for one quarter.

7. Do you believe open pit mining will occur, and if so do you believe there will be synergy leading to a further reduction of cash costs? Or will there be other cost cutting factors through an open pit mine? (No one answered me this in the other thread :( Might have to research it myself :( :( :( )

Ans - Open pit mining will happen as long as the enviromental approvals are received. This enviromental process is in process and should complete before year end.
The costs of ore extraction from mining open cut are much lower than underground however the ore grade of the open pit is lower so the overall effect depends on this trade off

*Yes, was worried about lower grades. Judging by your non-commital answer I assume you are unsure and don't view it as heavily favoured one way or the other. Obviously was hoping would be much cheaper.

8. What PE rating do you believe will be achieved once all of the following has been completed, on Project 4000 alone?

Ans - PE is not a meanifull measure at this stage. Most of the potential upside is in the exploration stage. If you were just trying to value the chile mine then maybe a EDITDA multiple of 4 may be fair

*Hmmm. Is this exceptionally good? When you state PE is not a meaningful measure, I take this to mean it is higher than an accurate value of the share.

I probably didn't explain this one very well. I assume the PE using Project 4000 alone is well under 10 and the mining share standard? Therefore, if the shareprice has such a great PE on current production (or imminent production anyway), with such a massive upside ahead, then this suggests to me how undervalued the share is.

9. Do you believe the company has further upside potential aside from project 4000?

Ans - Huge upside, Project 3000/4000 is just the entre. Filipina grade is the big daddy, Armenia gold copper still holds a lot of potential. Portugal gold and Portugal Tungsten are good projects and probably another 1 or 2 copper projects in Chile. What is significant about several of these projects is that they are very well advanced and are all expected to develop into production centres. It will take 3 to 5 years for all of this to unfold and this is the reason I hold this stock.
Project 3000/4000 is a good project but you should only look at as a cash generator to fund the drilling,feasibilities and maybe some of the capital to get these other projects to production

*That is how I do look at it, but I also see it like this. The share price will be more than reasonable on imminent production alone, therefore this basically means the rest of the pipleline ins't factored into the shareprice at all.

I need to research the other mines I believe but as they are still so far away, hard to get data.

I am not holding this stock to turn 12 cents into 20. I am looking for a long term price of at least $1

*I agree. I will probably sell out some at a higher rate since it holds such a large percentage of my portfolio, but I will keep a lot for the long term.

Thanks very much.

Finally, I understand everything is heresay until when or if grades improve, but for me at least, a forecast figure is interesting. Once it has occurred then there is no need to discuss it and the SP will have already factored it in.

Thank you very much gentlemen.

Oh yeah, almost forgot, found this in PNA article in Australian, thought people might be interested.

"Credit Suisse said copper would average $4 a pound in 2008-10, raising its previous prediction."

Also another article stating CU dropped as US dollar strengthened, another example of where cost and price are intertwined.