It's worth noting that as Ozl's shareholding in SFR is totally undedged which given the current downward pressure on copper and copper companies will likely see a significant write down in Oz's shareholding in SFR.
Ozl should consider implementing a derivatives trading strategy to allow it to benefit from any upside but protect against any downside movement in SFR's shareprice.
It is also worth noting that Ozl faces significant cash otuflows in the near future. The movement in PH from an open cut will lead to a cash outflow for the foreseeable future (while generating marginal accounting profits).
The ongoing exploration at PH ($50m pa) and Carapateena will also see significant ongoing cash outflows not to mention the need for the current share buy back to be extended.
This factors mean that Ozl will have to start unloading some of its SFr shareholding very soon.
OZL Price at posting:
$8.60 Sentiment: Sell Disclosure: Not Held
