Champ, fair call, I apologise for my catty post, it was unnecessary and didn't add to the discussion.
Anyway, I feel this will add to the discussion.
Putting the wider market conditions to one side, and focusing on management, they have encountered problems, and I feel they have reacted and dealt with them in a decisive manner.
1. Bringing the ball mill forward - the development plan called for this item, but it wasn't required until silver production would have been able to pay for it. This decision would have been made on the basis of rock core data - stats like RQD, fracture spacing, weathering and particle strength all contributing to an assessment of the rock mass strength. Field crushing tests would have been made and empirical assessment would have been the support behind this decision. Unfortunately the assessment didn't bear out and the long lead item (read- you can't just magic up a ball mill from thin air) was purchased. Very decisive, absolutely necessary but also required management to admit they got an element of the mine plan wrong.
2. When grade issues were brought into question. They acted decisively and had the methodology independently verified and worked hard to establish the root cause of the grade control issues.
3. The last 6 months they have been working to install items like spray washers and get the ball mill ready to go. By all reports these actions have been and are being completed to schedule, as indicated by management.
4. The latest capital raising comes at a bad time, but it's not poorly timed - the major shareholder is underwriting the placement and the bank is helping out with a restructure of the finance. Obviously they believe CCU still has a good business case.
So really, I can't fault them too much on that front. If they were making stupid decisions and the SP was languishing despite the wider market conditions being favourable then sure, I'd have offered my holding up on the block. Do I wish I had sold higher and bought lower? Sure, but I have been in this stock long enough to know this share can run hard on thin volume. I look at CCU the same way silver stackers look at owning silver - top up your holding on a regular basis and if it drops heavily, top up harder.
As to the wider market conditions - every junior has a smell about them at the moment - but as a contrarian, this is a good thing. Have a look a companies like TRY, which pays a divi and even they are struggling at the moment.
The fundamentals for Silver itself look promising - the wholesalers have nothing left, and the futures warehouses appear to be bare. There are rumours of forced cash settlements impending but what will happen is the CME will find the physical for the buyer and force the shorters to pay the difference. Either outcome is positive for silver.
CCU Price at posting:
14.6¢ Sentiment: Buy Disclosure: Held
