A wing and a prayer maybeJust tried to gather my thoughts over...

A wing and a prayer maybe

Just tried to gather my thoughts over the last day or so and tried to understand where exactly the good ship AIM is at presently. It is easy to look through this whole saga with rose tinted spectacles like our old pal Mark Florry. Its easy to keep telling yourself "It is 6mt of high grade zinc resource (potentially a lot more to add), we are in the process of building a mine, potentially revenues from Silver credits, exploring for gold nearby, we have potentially a copper resource of Olympic Damn proportions and not to mention a JORC compliant Platinum resource". Everything can look rosy on the surface when you paint a nice picture like this one. But it is the nagging doubts about what might just lye under the surface. So what I have attempted to do is give a fair/unbiased reflection of AIM to date.

AIM management appears to have been busy lately and refreshingly transparent compared to previous management. About March time, management set out clear targets on the development of Perkoa. On the surface the development would appear to have been progressing well but I took a closer look at the development plan to see which targets have been met so far, I came up with this. (NB. I have indicated the target date and the revised target date where AIM have given one e.g. Mar/June, were March was the target date and the revised target date is June).

- Boxcut Repair – target completion by end (March/Not competed or completion date specified)
- Mining Infrastructure – provide power, water, compressed air, workshop, communication, ventilation, fuel, etc (April/September)
- Ramp, Sump and Stablisation work (May/Not competed or completion date specified)
- Logistics Contracts for Land (Train) transportation to Port of Abidjan (Bollore)– target to sign contracts May 2008 (May/Not competed or completion date specified)
- Administration of Sales Agreements for Perkoa Concentrates with Xstrata and Boliden (May/Before Sept)
- Decison on Project Funding - Perkoa (May/Sept)
- Heli-borne VTEM geophysical survey (June/July)
- Delivery of Major components (Crusher, Ball Mill, Flotation Cells, Thickener, Filters, Screens) (May/July)
- Accommodation Village progressing (Aug/Sept)

Just to show you that I am trying to give a fair reflection of AIM. Here is a list of the targets AIM set itself for Perkoa that it has achieved to date.

- Submit application for renewal for Mokopane (April/April)
- Mobilisation of Byrnecut Mining (May/May)
- Complete Portal/commence mining decline (May/May)
- Independent Qualified Persons Report for Perkoa (May/Apr)

In the last progress report, there was no update on the progress of the 6KM road targeted for completion in July. Will this be delayed? Now I am not so stupid to think that Perkoa would not experience delays of this nature but would you say that the project is progressing ok so far and how come Perkoa is still on target with all these delays?

Aim has also provided a revised NPV figure for Perkoa (Double to previous NPV) that on the face of it looked like good news but the market did not seem to pay it much attention, why? Well perhaps like me they are starting to question how the grades (Increased 13.2 to 13.8), resource (Increased from 5.8mt to 6.3mt) and production rate have been tweaked again (Anticipated to be 720,000tpa and is to be reduced on the basis of a Geological block model expansion). Are these figures being manipulated to suit or are they achievable? If the LOM Zinc grade has increased then why has this not been reflected in the recoverable grades, which is unchanged at 53.8%? By the way on the basis that it is now a 9½ year mine life, I make the new annual production rate of 650,000tpa. Other things to note regarding the new NPV figure which includes adjustment for increased resource, increased grade and enhanced downstream costs (transporting concentrate to port), but it is also still based on the same Zinc price of $2600 per ton of zinc which does not reflect anything like the current zinc price. Isnt this just obvious manipulation?

As regards Mokopane, I still feel a little in the dark about this. Why were the prospecting rights, which expired in April 2008, left to expire? Is this normal company practice to let prospecting rights expire? Will the latest prospecting rights application be accepted?

Mumbwa appears to be making steady progress. A target of 15 holes has been set by AIM to complete phase 3 of the agreement with BHP. Since February a total of 7 holes have been drilled with drilling commencing on the 8th hole. That works out at approximately 5 months for 7 holes and with a further 8 holes to complete until the 25 November deadline (approx 5 and a bit month), does that mean the completion of Phase 3 agreement is under threat? We dont know because we havent been told that we are on track to complete on time.

There are lots unanswered questions?

We know the good ship AIM is still under construction but what we are yet to find out is does it have the nuts and bolts to set sale and can it stay afloat.

Are the management winging it again just like Mark Florry did successfully for a while? I hope not but to be honest I am really not sure.

Do we need a minor miracle now? Perhaps!

Some holders might be wondering why I still hold at all but like I mentioned at the top of this post, there are many potential positives to consider if the management can deliver. But at the moment it seems we are living in hope rather more now than optimism i.e. hoping financing will get completed, hoping we get off-takes signed, hoping the zinc price will be favourable when we finally go to production, hoping we can add to Perkoa reserves, hoping……hoping……hoping.

Even with all these doubts that are surfacing I will continue to hold and wait it out for HOPEFULLY a minor miracle.

To finish on a more positive note, I think aside form financing/offtakes being completed, potentially the issue of transportation costs are by far the most important element weighing down on the Perkoa project feasibility but it looks like AIM have drastically improved these now.

I hope I have given a fair reflection of things, but if some don’t agree then maybe I have at least opened up a discussion.

Best of luck to all LT holders.

DC