some food for thought, page-6

Risks as they apply to AIM

1) Debt funding is unsuccessful – In my opinion this represents a major risk associated with AIM. I raised it at the EGM and it was sort of glazed over a little bit however risk aversion is becoming a major problem within debt markets. Will AIM get the cash? In my opinion (and this is purely opinion) AIM will need to pay a significant risk premium to financiers to compensate them for perceived risk on investment (risks that financiers will be watching closely are perceived sovereign risk and operational risk … one biggie that might come into play if costs blow out significantly will be credit risk). We will get the cash I think however we will be paying well over the odds for it.
2) War erupts in and around BF. Always a possibility given where the country is located. Anyone who discounts this as a possibility really is asking to be taken apart in the markets. I would suggest that there are other much more clear and present risks to AIM.
3) Cost blow outs. The name of mines which are completed on time and budget don’t exactly spring to mind. I would think we will see a blow out however I would also suggest that given MF has ordered a lot of the long lead time equipment a year or so ago he may have dodged a bullet here (plenty of anecdotal evidence that mining supplies are now frightfully expensive – you would be absolutely amazed to see what people are able to charge for 2nd hand mining truck tyres)
4) Zinc price collapses – as mentioned before, I think the price that AIM will get for it’s product will be loosely correlated to the LME. I would suggest that management should be looking to allocate a few $Million towards a hedging program for their product. Shouldn’t use commodity SWAPs … long dated slightly out of the money options would be a far better hedging strategy which doesn’t lock out any of the potential blue sky that MF is always banging on about.

And the biggest risk in my opinion is:

5) Business continuity risk – whilst we might all complain about MF and the snout / trough interaction the reality is that if he were to resign or die we would be stuffed as there is no clear heir apparent within the ranks at AIM. What’s more, it is not as if we could go and get a professional business manager who will slip into the role and get the job done as 99% of all African business relies on contacts - in the case of AIM 100% of the contacts rely on MF - remember that the deals with BHP would not have happened without MF (BHP didn't just take a shine to the name 'AIM' as it sounded edgy and cool). So in my opinion, rubbish him as much as you like … reality is that without him life at AIM becomes quite interesting (and scary).

All the above though is purely my opinion. Am sure there are smarter and better informed people out there who can offer a better synopsis than I ...