Good Luck D with the Red Sea play. Hope it all pans out for you...

Good Luck D with the Red Sea play. Hope it all pans out for you a lot better than AIM did ...

I've heard that BC and SL are both back in Africa at the moment, so holding our breath waiting for some sort of positive announcement before June 30th is a bit pointless in my opinion. I do wonder how much of the action in the last week has been people deserting the sinking ship and how much is simply tax loss realisation ...

This stock now comes down to the probability of being able to secure finance for the last 57 Million. Truth be told, this is not a large amount of money to secure, however given the project relies on a zinc hurdle level of well above 2,000 per tonne I think that banks will be very slow to offer finance unless they have a ridiculously bullish view on zinc (certainly in my part of the world this is not the consensus view). Ultimately, banks will only lend this money if they were certain that (a) AIM has the ability to service the debt - given that no income will be earned until late 2009 the interest will need to be capitalised and banks in the current climate are not especially keen on this so this is going to be an issue that I can't see any way around unless the project costs can be severely reduced (b) AIM will be forced to hedge part of their zinc production to ensure that the banks have some certainty around the revenues that AIM will earn - one doesn't need to be a genius to see that hedging at these levels effectively will render the project a dead duck and (c) banks will need a secondary exit out of their loan to AIM which means that they would need to be satisfied that they could liquidate the company and be able to recoup their loan to AIM .... one would assume that this is achievable given the 100 odd million that has already been raised via equity. All in all, this is going to come down to the wire.