quarterly, page-4

Some 6 years ago I had a little lesson as to the value of this type on analysis. I recall listening to an online analysis by a representative of some broker about the fortunes of the "Nickel Business Unit" NBU of the Old WMC. I was an employee of some 5 years standing at the time. It was a detailed analysis which took into account many issues such as expected head grades, FeMgO ratios, Ore Body modelling and even accounted for Shutdown requirements. It arrived at a formidable assesment of production over the coming 2 quarters.


What the analylist was unaware of was that at the time there were serious concerns about the integrity of the furnace at Kalgoorlie Nickel Smelter. Over a bottle of wine the Maintenance Manager of the Smelter had advised me that if the Furnace Dome failed it was likely that in his opinion WMC would be finished(NBU was almost all WMC'S profits in the preceding year). Independant reports from Outukompu put the failure of the furnace in the likely risk category. Those were the stakes. The outcomes were either contined operation or total failure. WMC had a gun to the head with three bullets in the chamber and had given the chamber a spin. What did the anylist know of the true risks........not much.

Where might this leave the neophyte analyst sitting at home with nothing more than the publicly released
financial and production data? At the very best you are looking not at the comet itself but at the tail. The firey head of the comet and the direction in which it heads is unknown to you. Yours is to analyise the smoke left behind and speculate as to future intensity and direction. A Good mental exercise and possibly worthwhile but dont delude yourself as to the likely veracity of the exercise.Recognize the exercise for its inherent shortcoming and parlous limitations.

BH your post sounds creditable but in my experience....dont rate yourself too highly OK!