The way PEM is looking with regards to its most recent result (a...

The way PEM is looking with regards to its most recent result (a loss stripping out the proceeds from the Herald sale) I think PEM need CBH way more than CBH needs PEM.

PEM have got themselves right in trouble by aggresively hedging their lead production going forward at rates way below current levels. The lead credit reduces the Zinc cost per pound but due to the muppets at PEM selling forward the majority of their lead production for bugger all, their costs will remain high.

CBH should negotiate from its position of strength to do a deal purely on the use of PEM's mill at Broken Hill which will benefit both companies, but leave it at that. CBH does not want to get into bed with PEM and its horrible hedge book.

CBH should stick to its knitting with getting Panorama underway as well as Sorby, Hera, Mineral Hill, etc.

The only attraction PEM has is its $110m in cash but CBH should be able to get off take/equity partners to help share the capital costs of the new developments. This combined with the increase in cash flow due to rising production, falling costs, and rising prices from the Endeavor Mine means that CBH is in a fairly good position at the moment.