WTF, page-62

Hi Treasurehunter, I've just sat back and watched this play out and after talking to management your points regarding shortage of working capital appear as though they were correct.

However a few things to note here :

Firstly between upgrading the gold circuit (US$700k) and the acquisition itself ($US5.5 million) US$6.25 million has been spent on these assets which today is over A$7 million dollars. That is more than what the whole company is capped at at $0.003! There's 9,000 ha of Copper ground which in the last preso says historical production has averaged 4.5%Cu not to mention the gold assets, Tumi etc. Torrecillas itself has had over $15 million sunk into it.

Secondly, from the announcement the money was put in predominately by major shareholders and Alignment Capital (they are already substantial, see the announcement on the 22nd September). I've spoken with management and I believe a major player out of Europe (who has already invested quite a sum of money) corner stoned the whole issue. I'm actually really relieved at this outcome because the only money I see being raised in junior resources atm is either through these predators out of NY or if the issue is done at a massive discount to market price. The fact that these guys have stumped up effectively at market price I think shows they've done the right thing by the company and is a great result and also I think means it is cheap enough to not even ask for a discount.

From talking to management the impression I received was that these shareholders were happy to inject this funding as I've mentioned because everything is built and been paid for, i.e. the San Santiago operation. All that is needed is for the plant to be filled and this capital achieves this. If the plant is full this looks as though it will make good money. From what I've read San Santiago is licensed for 350tpd processing capacity between the gold and copper circuits with the nameplate capacity being 525tpd. My research on its most comparable company Dynacor (TSX : DNG ) is that they are purely gold toll treatment and are limited to 250tpd. Their most recent EBITDA number I could find (2013 full year, which I assume is because they are calendar year end reporting) was $15.4 million Canadian dollars. My understanding is that their mill is about 20kms down the road so they are in the same area and you would think going to be dealing with the same or similar margins on a per tonne basis. The way I look at it is that if MIZ with its greater capacity only still achieves half that result then its on a P/E of 1 and won't have to raise money again.

I don't believe the major shareholders, the directors who have taken shares in lieu of fees or Anglo would have taken the equity risk if they didn't think that this was the case! On this basis, I would have to now presume that the business is finally fully funded. Even though I'm frustrated at the share price being down at these levels its times like this I thought I'd sit back and work out why Ive invested in this in the first place and it is seriously cheap IMO.

DYOR