rights issue - 3 options, page-24

ozblue, that's right. So the question then is why did M&G bail out when the numbers look so good? Why is the share price languishing at twice the potential earnings of the first, and probably first three, years?

You don't know that sales will happen in the near future. That is your assumption. Sales of NCu were supposed by some on HC to have started shortly after the crusher was commissioned in December 2012. Eleven months on and the crusher still isn't commissioned, and there are no NCu sales.

Nor is the processing plant "not far off completion" either. On 11th June 2013 the company announced that commissioning would commence in May/June 2014. In a media report in August the handover date was reported as August 2014. Then in the 28th October report, it just says that the process plant is expected to be in production before this time next year.

June 2013 said commissioning commences May/June 2014
August says August 2014
October 28th says within a year

Basically the completion timeframe is still where it was four months ago - one year into the future. Then the company has stated that commissioning will take eight months. So, assuming no more slippage, it will be June 2015 before it hits nameplate, although they should be shipping some concentrate within three/four of months of starting commissioning.

They finally started commissioning the crusher three months ago. Still not fully commissioned. This is a very simple, mechanical device. Perhaps the market is concerned that if a piece of basic equipment is so difficult to commission, perhaps commissioning the complex plant, extracting five or six sales products (Coarse NCu, fine NCu, copper concentrate, cobalt concentrate, magnetite, gold) might be more time consuming that the company is proposing?

You have to look at the past to see why it is where it is now. CDU has been very poor at predicting deadlines, and forecasting its cash requirements. A clear DFS, as promised three years ago, indicating the funding needs and the company could probably have raised all it needed at over $4, with no buy-backs. Instead the market has seen repeat trips for ad hoc funding, culminating in a $270m ($185m now, $85m later) debt/equity request now.