musings

Good to see that the litigation has been dealt with …. I wouldn’t read too much into it in terms of NS now seeing how wonderful the project is. I think that NS are probably satisfied that the terminal issues which were present under the previous management have been dealt with and that litigation has been terminated in order to not impair the cash resources of AIM any further (the longer this drags out, the more pain is felt by the company and ultimately this could have a severe impact on the company’s solvency). Also, it would be very difficult for AIM to secure finance with litigation going on in the background – what bank would be prepared to lend money to a company who has mounting legal bills?

Is this the turning point that long term holders have been waiting for? I suspect that this might be the case although the company is a long way from being out of the woods and investor sentiment is still sour towards this company as the finance is still a long way away from being secured. However, if momentum in terms of progress can be maintained, we might see this thing crawl its way north. Key things on the horizon which could support and strengthen the price are:

VTEM Survey – These results are anticipated this month. Whilst not likely to set the world on fire, it would be nice to see that this deposit of zinc does in fact occur in clusters and that there are other deposits of high grade zinc around the mine. Naturally it will be at least 6 months until these deposits (if they exist) are adequately drilled to be JORC compliant however positive survey would certainly give investors a higher degree of comfort around the viability of this project (bearing in mind if the zinc price does the old how low can she go then these survey results might not be worth anything).

Offtakes – IMHO this is the biggie of the information likely to hit the market in the next month or two and will certainly assist the share price. BC will be acutely aware that no offtakes = no financing. Pure and simple.

Mumbwa – The Stephen Bradbury of the short term news flow … if the results from drilling are remotely like those from S36-01 then the price will breeze past 10c mark in the blink of an eye …

Finance – I have no idea how they are going to manage to get this across the line, however if they somehow pull off a financing package WITHOUT the requirement to hedge then this will be the thing that will establish a firm floor under the share price. Having said that, tight credit market, zinc being on the nose and questions around the profitability of the project will be challenges that AIM will need to surpass.

So, in conclusion this is all still very up in the air, and the price at the moment is probably fair value given the amount of uncertainty around the future of this stock. I think that at the very least it is going to be quite entertaining to see how this all pans out. If he somehow rights the ship though, I for one will be very quick to buy BC a XXXX.