Angeluss 2012,Rewind to December 2010, when CAP released the...

Angeluss 2012,

Rewind to December 2010, when CAP released the JORC compliant inferred resource of 1.4 billion tonnes. The SP was 93c, with 100 million shares on issue.

Cap had a market cap of $93 million and was considered by many to be undervalued. Since that date, CAP has significantly improved the economics of the Hawsons project and de-risked the project considerably.

Since then, we have also received 2 million GUF shares and have an interesting tin / tungsten project on the go.

So why the backwards SP action?

IMO, the problem is that we lost our J/V partner and our free carried position into production. The market has little or no confidence that CAP will be able to find another J/V partner on the same terms as we had with BMG.

This fact, accompanied by general market fear and a declining iron ore price has seen CAP drop back to a market cap of around $25 million.

Silvergate and Conglin Yue both have an average price in CAP of 40c + (I could be a bit out regarding Mr Yue).

If a take over was to occur, I can not see it happening (or getting accepted) at below 50c, so everyone saves face.

The Hawsons project as a NPV of $3.2 billion, with CAP owning 60%. So for a company with say $5 million cash, the market is only assigning 18 million of value for all of CAPS tenaments / projects, including Hawsons, where CAP controls 60% of a project worth $3.2 billion.

CAP is a very interesting risk V reward play at the moment.

It should not be much longer till the liquidator of BMG advises who the buyer of BMG's share in Hawsons is. This for me, is just as important as what happens at the AGM / EGM.

Hope this helps with your decision.