That was a terrific announcement today that the capital works to...

That was a terrific announcement today that the capital works to ramp up to the 30ktpa production level has been completed without cost over-runs etc.

I also notice that someone cleverly picked up over 2m MXX shares that convert to over 4.4m CUO shares at an average price per CUO share of not much more than 32cents. What a steal! If I wasn't already so overweight with CUO I would be trying to buy a few more MXX given the 2 weeks remaining to accept the UNCONDITIONAL offer ie. that is a huge arbitrage opprotunity at today's trading price.

In any event, I am now focused on the post merger picture. It is worth reflecting what this company looks like and I have extracted a few pieces of data from recent releases etc.


There will be 879m CUO shares on issue post merger, with about 48m options for conversion...mostly at 65cents and above. So the merged group is currently showing a market cap of $338m (at 38.5cents per share).

On 15th April 2008 the Independent Expert's report was released with commentary in the MXX letter to shareholders as follows: "The Independent Expert’s report issued by CopperCo valued MinSec at between A$386.4 million and A$592.8 million, with a ‘preferred value’ of A$496.4 million (approximately £182 million, £280 million and £234 million)." That valuation figure included Minsec's interest in Copperco which is absorbed in the merger.

Newcopperco is going to be generating revenues of around $225m following ramp-up at a gross (EBITDA) margin of about 65% assuming Cu at AUD7500tonne (USD/AUD0.90) = Cu price of USD3.10lb (Copper has averaged about USD3.20 for last 3 years).

So we have a company that has a market cap of $352m that has just bought assets of that value or more, AND which is going to be producing earnings of about $140m EBITDA pa. This company also has further outstanding growth opportunities in base metals, platinum and gold.

This is a unparalelled opportunity to buy stock at these giveaway prices if you have anything more than a 3 month invetsment horizon in my opinion. I'm happy to be corrected if any of the above is not accurate.

regards
DF