valuation, page-15

Oly,

If CMR had forward bought sulphur then now being a 1 year late on production they would have had to show in the accounts losses on the "take or pay" forward contracts. You know all forward supply contracts are take or pay, no point suppliers selling them forward otherwsie!

Forward purchases is clutching at straws IMO. If MRE and other suphur users that have been operating for years got caught out by the sudden rise in prices, do you seriously think CMR management are cleverer?...lol.

Sulphur is demand is driven by a number of industries such as phosphate fertiliser for which there are no alternative supplies. With high crop prices farmers will pay high fertiliser prices which will cover high sulphur costs. Nickel sulphide miners have no sulphur cost problem, infact the smelters now have sulphur as a very profitable by product ensuring they keep smelter charges low for miners. Maybe the oxide leach miners will take the haircut while sulphide players make all the mulla?

If anyone is going to fall off the top end of the cost curve it will be new entrants into oxide leaching who haven't perfected and de-bottlenecked production and without deep pockets to see metal prices higher. Mmmmmmm, will it be BHP, Inco, RIO, MRE or CMR who closes down first??

Perhaps someone else can make the phone call and contribute to FA here rather than relying on blind faith.

cheers