I'm a little apprehensive about buying into copper right now, it's still quite near all time highs ($3 versus the $4 highs), leaving a lot of room to fall. This would destroy the value of any purchase, and perhaps see a repeat of the Allegiance Mining disaster - $950m to maybe $100m in six months or so. From memory the allegiance mining project was low cost as well, and near production (had been effectively derisked as most of the work had already been done).
They need to expand, but why buy into a commodity that has a premium built in, especially in this market? Not so interested in commodities that are 'going to do well' in the coming years - as we all known Michelmore figured Nickel was going to do well.. I guess I'd just prefer a less ambitious purchase, one that had zero risk of eating up all the cash reserves (at least split the risk between two smaller projects). But maybe with others on board this wouldn't a risk??
OZL Price at posting:
$10.60 Sentiment: None Disclosure: Held
