where to???

Last weeks share shake out was perhaps a timely correction and not the beginning of a crash.

A crash would make no sense as interest rates are low - stable and share prices world wide are not into "bubble" territory.

The latest slump may be positive for Anvil share price longer term as investors seek out quality rather than speculative-risky stocks.

A bubble in copper price while a cause for short term excitement is not helpful to Anvil's long term future.
Steady, stable, strong prices would be better.

As predicted the fall in price of copper last week was accompanied by lower Australian dollar.
Making Anvil a relatively stable investment.
The form of natural hedging referred to in a previous post.

WHERE TO NOW??

The over-burden situation has probably been the result of management needing a quick-strong profit stream with the commencement of Dikulushi mining.

Short term expediency leading to later difficulties.

Bill may have contemplated moving into deep mining earlier but once again the removal of overburden will result in another two or so years of strong profits from open pit.

Eventually the deep mine will be required.
Extra costs, slower recovery, less profit.


Now for the next stage? -----

Kulumaziba mine being fast tracked and due to start production well before the end of the year.

With the two mines producing we should see a re-rating of share price closer to $1.00

SPECULATIVE! -------

Miningnut has suggested a capital raising to be announced this month to finance smelter facilities to serve the two mines.
Saving cost of transport and high smelter fees.

Does seem a strange departure from the ORGANIC GROWTH concept previously espoused by management.

Would only make sense to me if savings were well in excess of 20% of cost of plant.
Or one might suppose - if smelter facilities were not available for the predicted increase in concentrated ore production.

The next concern is that if/after this fundraising and expenditure Anvil will need another significant fund raising to finance the one or two mines which will surely be on the way in the following two years.

The present slump and uncertainty will make the suggested fundraising for smelter much more questionable.

The appropriate procedure in my opinion would be to commission Kulumaziba and ratify the viability of Gecamine ore bodies as large deposits which will enable large long term production of copper and associated minerals.

After this - and only after this - should any significant fundraising for smelter be contemplated.

The share price after two mines are in full production and the resources dilineated for two long term large production mines should take off to about $1.20 (my guess).

Surely the next step would be to commence establishment of larger mine/s? With fundraising as Miningnut has suggested is imminent through share issue.

Once the large mine/s are producing Anvil share price could be well over $2.00.

Once the profit flow has exploded then a smelter could be installed and fundraising should not be such a big ask.

The organic growth once contemplated.

Would be intersted in comments from Miningnut, Flats, Stone Pony and others on these matters.

Certainly the latest "correction" will make BT reconsider a share issue right now - if that was indeed his intention.

Cheers,

NT