sloppy reporting, page-14

Aside from the above, I think its worth holders and investors asking what the company's goals are and has it met them in the past? This is generally a good guide for future performance, caveat being a change in management (like Mr Clarke kicking some Chilean butt may change the CMSB performance).

For example, there was a contract in 2006 to WISCo. This was not fulfilled (reasons being? lack of throughput from the mine and ship scheduling issues) resulting in a $13M impairment.

Admiralty then backed up by saying the same unfulfilled rate as 2007-08 will apply for 2006-07, and now its nearly halfway through 2008 and ADY are still trying to fulfil the previous contract. So the idea of shipping out any of 2008's iron ore to WISCO is yet to come to fruition.

In April 2007 Admiralty had stated that they had a throughput of 1.85Mtpa; this was not achieved and is still not being achieved (crusher problems, clearly).

July 2007, they had environmental aprovals for 3.9Mtpa capacity, able to generate $167m per annum revenues. Its there in black and white. They further went on to say that the existing plant had 1.3Mtpa capacity, operational August 07.

They went on to say "The total permitted capacity from Santa Barbara at 3.9m tonnes and Santa Fe at 1.2m tonnes
is now 5.1m tonnes which is half of our projected capacity target for 2009". A little far off that 10.2Mtpa target for 2009, methinks.

June 2007 they said that the plant was operating at 30Kt per month "slightly below capacity". Note that 1.3Mtpa is 110Kt per month. So "slightly" is a wee understatement there. This is where the WISCO 06-07 CFR contract flew off the rails. Apparently this was an equipment delay - obviously the crusher or something. But, note: efforts were made to tweak the plant recoveries! Little did it help.

Not also, 4 shipments per quarter for 160K = 720Kt of ore at the actual rate, not really enough to meet the 900Kt CFR contract. Again, the data did not fit the proposed goal. And further; 150Kt in 35 days delivered by truck is 4.8kt per day; this equates to a 1.58Mtpa shipment rate as constrained by the trucking rate. So to meet their 10Mtpa 2009 goal, ADY will have to basically octuple their trucks (400 trucks instead of 50 as of July 07).

And then we get to 2008. January, iron ore still operating at 30Kt per month ("slightly" below capacity of 110Kt per month) due to "construction". Daily production ranged from 750t to 2Kt per day; ie from 275Kt per annum to 730Kt per annum, still well short of 1.3Mtpa let alone what the company is permitted for environmentally. Must be the crusher which still hasn't arrived.

But fear not, the poor production is irrelevant as they are forming a stockpile at Caleta from October to February while fruit is being loaded. So we can see how they aren't even getting close to their goals;

Number one, they are producing about 350Kt per annum on average. They can truck five times this amount and, if they load ships in 4 days apiece (or 10Kt per day) for 7 months of the year, 2.1Mtpa. So shipping isn't the problem to meet their modest WISCO contracts, nor is trucking, but it's crushing - a fact they were clearly aware of in July 2007 and didn't own up to until May 2008 (though the data was there to go through).

However, if they do get the crusher sorted, and can produce 110Kt per month, then the trucks become the rate-limiting step. If they sort that out, Caldera (2.1Mtpa at max capacity) prevents them from reaching their 10.2Mtpa rate. And if they sort that out, they have to stump up cash for Candelaria - $TBA and debt.

Clearly the problems at CMSB go back to early 2007, and have been conveniently ignored by HC posters and management alike for over 52 weeks. Considering you can hire a contract crusher which does 2Kt per 12 hour shift and costs you $0.5M
a month to run, and mobilise it within 4 weeks if you know what you are doing the problem is clearly with management.

So I say they will never meet their goal of 10Mtpa; it is 30 times their capacity to just solve the damn crusher problem and get on with it.
Then we have a 2009-10 production goal of 7Mtpa as elucidated in early 2007. Will they meet this goal?