re: kahunas thoughts part b

More from Kahuna on SS re URL


----------------------------------------------------



Hi,

thanks ...

yep suspect some dilution ... but not as much as u suspect.

Agree totally on the other untouched dirt URL holds.

CUO ... not impressed by them ... trying to gobble up URL. Bottom line is CUO has far smaller sized deposit resource in total no matter which way I look at it.
Also the dirty tactics employed trying to get URL .... the classic is the one that still sticks ... about some difficulty in processing Sulphides and Oxide copper deposits. One thing when you are in a battle to buy something is to talk it down. Now this may be an issue in some peoples minds but one of the delays for URL was having to spend 6 months going to laboritories and proving their process actually works ... this is to the people who are more than likely to provide the actual finance. I get this from URL's own reports ... having read every single one as well as the web page ... it was a dirty trick.

Dirty trick didn't work and Xstrata possibly the most experienced miner outside say BHP or RIO and with a very very good idea of the geology and the processing of ore types in the area since its the one who owns the Copper mine 60 km away from URL's deposits ... it steped in and a placement at 22 cents ... in return it gets the right to BUY 51% of the Roseby project at fair value. Not anything else ... if it spends 15 mio is the precondition to this purchase but ... to date seems unlikely ... and with even a conservative NPV at 500 mio I dont see them doing it .... if they do ... great its 250 mio for a company with a market cap of 60 mio ..... and they still own the remaining 49%.

Best dirty trick ever was WMC battle with poor old Xstrata trying to talk WMC down ... conversly WMC saying Olympic dam is actually twice the size ... BHP stepped in and blew them away ... but now 18 months later ... BHP with 17 drilling rigs going 24 hours half way into the expected program ... BHP like the trooper it is up front and open is saying well half way in to the program the ore body is yes exactly what WMC said a lot larger ... so far 70% ... but basically saying what WMC said all along when Xstrata was trying to gobble it.

Now URL is the victim of this sort of cr.a.p ... CUO had and still has a vested interest to try and muddy the waters. Xstrata the same if it ever tries to pounce ... whilst it was the white knight ... if Xstrata was prepared to buy shares in CUO when the deposit was 40% smaller which it was at the time and nearly all inferred as opposed to measured and proven as it now is .... and pay 22 cents a share for URL .. back when Copper was US$1.50 ... if you think it is worth less now ... as opposed to back then the actions and price of copper completly contradict where it sits now.

Hence my love.

On the dilution issue ... my understanding is the feasability study is being done by an independant third party not of URL's choice but the choice of a financier or bank. So the eventual dilution might be a lot less ... a lot less than expected. Soc GEn would be a likely suspect for the finance in this ... but it could be any number of banks or finance comapnies.

I think the ease of the placement of 22 mio in converting notes underpins the whole lot.
With the finance we are going to see some drilling on those bits of dirt which URL owns but has barely touched the surface.

I am up late because mulling over this other company that makes URL which I think is exceptional value look like a spaz ... as for prospective ground .... its possibly a holy shoot.

Geology very similar to the region and another region I spent some time in liking the hot arid outback .....

Next week.