Australia | Jul 17 2006
By Rudi Filapek-Vandyck
As widely expected inside Sydney’s financial community, today’s ASX-enforced clarifying statement by the company formerly known as Australian Mining Investments, CuDeco (AUM), has taken away some of the hyped up magic that dominated trading activity in the days before the ASX suspended the shares from trading on the 6th June.
At around 1:18pm CuDeco shares were trading at $3.03, down $4.08 or 57.38% from the last closing price of $7.11.
Today’s lengthy clarification issued by the company, and approved by the bourse authorities, effectively cuts the estimated inferred resource of the company’s Rocklands Group copper project in half, to 25m from 59m, denominating the bigger half as "targets" instead.
As again highlighted in today’s statement, inferred resources are the lowest category of estimates and bear the lowest level of geological knowledge and confidence in estimates made.
It is but fair to assume that current figures will be subject to significant modifications over the next few months, if not years.
The statement does address some matters of criticism such as the location of where drillings have been undertaken so far.
According to industry sources, the revised admission of a much smaller inferred resource base means that on current estimates the project would probably never become operational on a stand alone basis. Further drilling results would need to increase the current resource to its previous estimate of circa 59m tonnes for that, at least.
As could be expected, CuDeco management remains confident further drilling results will increase the current resource. The statement suggests further drillings will be undertaken for at least another 18 months.
Management took the extra effort to "apologise for any inconvenience and concern this situation has caused shareholders".