I thought while we all had some time up our sleeves I'd address some key targets I believe management are trying to achieve, and why they are so important.
If they achieve these targets the share price will look after itself.
In no particular order I have the Revised jorc, Finance and the Mining license.
The Revised Jorc:
If the extra drilling can prove that the jorc calculated resource was extremely conservative and it gets revised up, it will inturn value the company higher.
An interesting point made to me at the Agm was that part of the reason for the much bigger bulk sample being done was to provide more data(evidence) for the consultants Hellman and Schofield that they had been too conservative. They would have to go back and look at their modelling.
These guys are under huge pressure to get this right, too modest and mining companies are loath to use them, too robust and they get sued. Mining companies wont look at them too favourably if they state 2% for the first 4 yrs mining and Cdu achieves closer to 4%. They'll be a laughing stock.
Finance:
This is an interesting one. The company has multiple avenues in which to achieve this, cornerstone investor, a cap raising through a possible HK listing and debt financing. As a shareholder I hope we utilise all 3 in time. All have seperate benefits.
A cornerstone investor keeps wolves at bay, and we have all seen how the market is viewing up and coming copper plays to date. These investors are usually in for the long haul as they can quite often benefit greatly by seeing the project come to fruition. i.e. a smelter which may receive guaranteed offtake.
The chinese value producers more on their exchanges then the Asx, so as we near production a HK listing is very attractive.
Debt financing a portion of the project minimises dilution for existing holders.
Mining license:
Self explanatory. No license no mine. (Mind you the Bligh government are under massive pressure to keep their economy going, especially with an election around the corner)
Now as these get ticked off the project becomes more and more derisked. As a project achieves these targets it gains value.
What we have to date:
A very low cost 10 yr open pit mine design with alot of boxes already ticked. Power options,rail,water,port,native title,roads and 95% of our mining equipment.
Continued exploration going with the majority of our own drill rigs.
Well advanced infrastructure with the ability to fast track mining when/if approvals come through.
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I hope this helps a few in identifying how to value Cdu as it attempts its transitition from explorer to producer.
I've tried to write this in a balanced manner so as to not draw too much debate. If these things get ticked off, we're away and happy times.
Cheers
mm
CDU Price at posting:
$3.09 Sentiment: Buy Disclosure: Held
