I am freaking PISSED!!!

I specially asked Elmer about this on the show and he told me there was no 30 day review period for the BFS.

I am speechless....

I listened to this a few times and get the impression that Shaft Creek is on their radar but it all depends on the future commodity prices.

He says they do a lot of work with a lot of juniors and its the properties they want if its economical.

He mentions people think now is a great time to buy because the share prices are so low and intuitively this make sense but in reality the entities they are interested have 3 or 4 shareholders that own majority of the company and they don't want 30% premium with the commodity prices but 60,70 or 80% premium and he thinks this won't work. I was bummed out after hearing this but that makes sense. When you are selling something you want the highest price possible and when you are buying something you want the cheapest price possible.

This gives me the impression negotiatons are going on already over Shaft Creek but they don't want to overpay. End of the day it has to make sense for Teck economically and it depends where they think commodity prices will be in the future.

I had to listen very carefully and kept replaying but their decision will depend on the price and capital cost.

Things they look at:

1) Mine Life - long or short

2) cost on the cost curve

3) Political Jurisdiction

4) Terrain - flat land like Australia or moutain terrain like Chile or Canada

Near the end I felt a little positive again when he mentions mining companies make the most profits when there are price spikes and having long mine life makes projects worthwhile.

End of the day where do you think commodity prices will be in the future!

604DD

I'm back and I'll try and add more to what I posted earlier.

So at the show Elmer touched on quite a few subjects and one of the most important ones was how companies use models to value other companies.

NPV is a great method for trying to figure out value if things were static and have a short life span but Shaft Creek will have at least a 21 year mine life. Elmer went over the block model and he believes this mine could be over 50+ years so NPV is not a good way of evaluating cuu. Real options case uses complex models and can assume diffrent situations such as building another mine in a different area if copper prices were $5/lbs in a few years time.

The BFS report is only on one section of Shaft Creek and he was showing me a map of areas that were outside of the block model that he believes if drilled could be upgraded to either measured or indciated resouces to extend mine life and improve economics.

I also asked about the Liard shares and he told me Liard was one of the earliest groups that found the deposit in Shaft Creek. He tried to explain the math but basically Liard owners will get 30% of the future profits from Shaft Creek and these people are not selling their shares. I am not 100% sure on the breakdown and percentages but once the BFS is handed to Teck we get ownership of those Liard Shares but if Teck backs in for 75% they get some of the ownership back. Basically if I am not mistaken, if teck backs in for 75% Cuu will have around 24% of the net profits coming out of Shaft Creek for FREE! I should have took notes when I was talking to him. Elmer believes if teck backs in for 75% then they would just buy us out.

CUU's main goal is to get the mine ready for anyone to take over. He told me there have been a number of companies interested in cuu but because they don't know what TEck is going to do they want to wait and see. He also mentioned Teck could form a JV with them and I asked would this be the worst case scenario because we would have to wait 5-6 years before getting any money back. He said this could be a possiblity but not a bad scenario consider everything is finance for CUU and we would get around 24% of the $371M every year (BASE CASE).

He also says Teck is a fair company and expects a fair offer if there is a buyout. He also said you can't speculate what Teck is going to do because they are a large company and they have many projects on the go so anything can happen. CUU can only keep moving forward no matter what and keep making the company as attractive as possible.

I also asked about Ernesto and he said Elmer met him in 2009 when he joined CUU. He said both him and Enresto has changed CUU to what it is today. Ernesto got CUU out of $4 million debt and is the biggest supporter of CUU. He said Ernesto is a smart man and won't leave money on the table.

I asked what happens when a buyout offer comes along? He said if its a fair offer there will be a news release. If the majority shareholders don't think its fair there will be negotiations. Basically Ernesto knows what the company is worth and so does Teck so they won't give a low ball offer. He believes Teck won't play around because another company could jump in as well.

Also in regards to the buyout price, Elmer said you can't just put a premium on the share price. Companies will value what the project is worth and make an offer. He mentioned First Quatum's hostile bid for Inmet mining. I believe he said the BFS was done in 2010 and the NPV was using 2010 metal prices but that is not stopping First Quatum from bidding 5.1 billion for only 80% of the project. I believe his point was that companies are using Real Options Case to value a project and not the base case.

Also forgot to mention if a buyout does occur we will get 1 to 1 shares for CUU2 and a cash dividend (or shares I think) because they used another company to purchase the land in Arizona. They did this for legal reasons and its better for the share holders because it is just a straight share swap (tax purposes).

I think thats all the good stuff I got from talking to Elmer and I can tell you I walked away smiling and very confident in my investment in CUU. If I remember anything else I'll try and post it as well.

Regards

604DD

When I found the CUU booth there was already a someone talking to Elmer. After he was done my first question was what was the next step for CUU.

Elmer said the most important thing was to file the BFS on Sedar and hand a copy to Teck. He told me this would get the Teck clock ticking. I asked if they would need the full 45 days before filing on Sedar and he told me that he expects it to be done sooner. I didn't ask for a time frame because they have been known for delays. So we know it could be anytime between now and 45 days from December 21st.

I also told him that somebody that came yesterday mentioned another 30 days for a review of the BFS before the 120 day clock starts and this is not true. He said there must have been some confusion and the 30 days review period is actually for the EA. They have been working closely with the provincial and federal government on an ongoing basis so any issues will have a recommended solution in the report. The 30 day review period is for the government to make sure that CUU has submitted and fufilled all the requirements for the EA report. After this it could take up to 180 days for the government to approve but according to Elmer's experience the government can also have delays. He expects the EA report to be submitted in the first quarter of this year. After receiving EA approval this would de-risk the project. They could actually lower the discount rate from 8% to 5% or even 4% which would make the IRR way higher.

My next question was about the 171M tonnes of waste rock in the BFS. I asked him how come they didn't drill this out last year since its so easy and won't require a lot of money. Elmer's answer was simple and the mine plan was not completed yet so without knowing exactly where the mine would be they did not know where to drill. He said he believes proving up this would not take too much time because the holes are already there. They just have to drill deeper and do test to prove the resources and the waste rock will could then be counted as resources and this would drastically improve the IRR as well. Elmer totally believes the Real Options case is how most large companies will be using to value mines. The NPV method is good for cases where with shorter

I have to go out now but I'll try and post the rest of my conversation with Elmer later.

604DD

Hey Everyone,

I just came back from the CUU booth and I have to say Elmer is top notch! I had a lot of questions and he explained everything very clear. I talked to him for a good 40-45 mins and he was getting quite a few phone calls.

I asked him about the 30 day requirment for Teck to review after the BFS is handed to them and this is not true. This 30 days requirement is in regards to EA once handed to the government. He said there was probably some confusion with some of the other people that talked to him yesterday.

All I can say is my confidence in this company has increased 10 fold and I will be buying as many shares as I can until the end!

I also took a picture with Elmer and some other guy. Might be Jason! lol

604DD

Hey tommy,

Was there an article on shaft Creek or just a picture?

Thanks

DD