research report by ord minnett, page-26

I have seen a chart that generalises the behaviour of junior miners prior to production. It would be good if someone was able to post it on this thread, because it shows that, all things being equal ? there tends to be an over-valuation of the stock prior to production. As production draws closer, the SP tends to pull back as inevitable delays and the realities of running the mine become apparent. Once steady production is achieved, the SP heads north again. So, let?s assume that CCU is fairly valued for the present moment ? what would drive the price up?

- Increase in resource
- Increase in the price of Silver

The other issue that still concerns me is that everyone is making valuations with circa $6 per ounce production costs ? this only comes into effect if the Lead can be extracted effectively. I understand that they are having some problems with this process (happy to stand corrected on this front). So at the moment the Share Price probably factors in no lead credits. So if CCU came out tomorrow and said they had found a way to effectively extract the lead I would expect another increase in CCU?s SP.

The current increase in the Price of Silver seems to not be affecting the Share Price much ? the POS is over $36 now and the SP has not even reacted to this. That said, Gold and Silver based equities tend to lead the increase in the commodity as people buy in anticipation of an increased value in Gold or Silver.

My current position is that I?m in from 20cents in November ? My sentiment is undecided ? I?m trying to decide whether to sell and run, sell a portion to leave myself exposed or keep it all in.