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Agreed, just trying to digest it all still, not entirely sure what reaction this will get short term but it's got a lot brighter for long termers imo. It's good to know Dr and co have been and remain to be very busy, 93m New shares on top of over 1b existing is a massive amount in issue. Not sure my 1.5p average will see blue within 12 months but at least their is definitely cash to be brought in through production, without doubt just what the Dr ordered :-)
Ferrex hopes for golden future The commodities crisis has forced junior miner Ferrex (FRX:AIM) to abandon three projects and find its fortunes elsewhere. It hopes near-term cash flow from a collaborative gold project in Australia will help fund development on a bigger project being sought by management. The market likes the news, sending the share price up 22.2% to 0.55p. Ferrex will try to sell iron ore interests in Gabon and South Africa, saying the assets cannot compete on a cost basis with the major iron ore producers. As it cannot achieve the objective of being a lowest quartile producer, it is in talks to ‘realise value’ for shareholders from these assets. Managing director Dave Reeves warns investors not to get their hopes up in terms of the sale price. ‘No-one will pay a huge slug of cash for anything in this market,’ he says. It will also find someone else to develop a manganese project in South Africa, saying this asset no longer fits the company’s investment criteria. However, it will persevere with a manganese project in Togo. The Nayega project has been held up by delays in getting the mining licence. Reeves says he sees no reason why it cannot be granted and will travel to Togo next week for an update. The small cap miner is paying £465,000 to buy Chaffers, the private company that has an agreement with Norton Goldfields to work part of its land in Australia. Norton bought former AIM-quoted Bullabulling Gold in 2014 and was itself taken over by Zijin Mining earlier in 2015. Ferrex will pay mining and processing costs and a 22% royalty on gold recovered to Norton. That royalty rate looks extremely high, yet Reeves argues that Ferrex has no capital expenditure requirements and walks straight on to a project that is already drilled and ready to mine. ‘You have to pay something (extra) for that,’ he adds. Norton benefits from the deal by the commercialisation of ground that wasn’t previously on its plan to mine in the near future. Reeves says Chaffers agreed to become part of the Ferrex group because of the opportunity to develop other projects. Ferrex’s plan is to take the cash generated from both the gold project and the manganese asset in Togo (assuming it gets the licence) to provide money for development work on any bigger project it acquires in the future. Shares understands that a high-grade project has already been identified as a potential acquisition. The gold asset is expected to have all-in costs (apart from royalties) of A$900 per ounce. Gold presently trades in the local market at A$1,550 per ounce. Reeves believes Ferrex should make a $300 to $400 per ounce profit margin. There is a small working capital requirement to start the Australian gold project to the tune of £200,000 to £300,000, says Reeves. He is looking at financing options to get this money.
Cracking stuff from DR Major overhaul of strategic direction Moving into a broader resource base - focussed on short term wins and cash generation Looking to leverage value from IO assets Still expecting Mn in Togo to deliver revenue All to generate cash for a 'future project we hope to be able to announce shortly' Ferrex as we know it is dead - name change in the pipeline. This is transformational IMO At last something to get excited about. DR has proven yet again that he doesn't sit around waiting for things to come to him. This Gold company could have gone it alone to quick and relatively cheap short term cash generation but they saw significant value in coming on board with Ferrex for the longer term......they know more than we do obviously. Finally, This project is not in Africa!!!!
NORTHLAND CAPITAL PARTNERS VIEW: http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/23634/northland-capital-partners-view-on-the-city-ferrex-plc-entertainment-one-and-quarto-group-23634.html The acquisition of Chaffers Mining will give Ferrex a near-term gold production opportunity that can be up and running at a relatively modest initial cost. While we do not expect margins or production volumes from the project to be large, or the mine life to be long, it should be profitable, excluding any substantial changes to the gold price or relevant exchange rates, and generate modest levels of cash flow that can be deployed to advance the Nayega Manganese Project. The addition of two experienced engineers into the Ferrex management and Board of Directors will allow the Company to leverage their skills on other development projects.
Well done DR! We are no longer a speculative AIM stock. I will take this small victory for now.
I guess silence is "golden" :)
More details on the Ferrex announcement: http://www.sharesmagazine.co.uk/news/ferrex-hopes-for-golden-future#.VkrhBHbhDct
Ferrex Managing Director Mr. Dave Reeves said, "It is very rare to find an opportunity which can deliver production in under six months from acquisition and therefore I am personally very excited about this project, which fits our goal of rapidly delivering cash flow at a low cost. Gold production will commence at 20,000 to 30,000 ounces per annum, the cash flows from which will be used towards the development of the Nayega manganese project in Togo when the permit is received. With our focus firmly on producing cash from these gold assets for the next six to nine months, I have no reason to believe that the Nayega permit will not be fully granted when we have the time to turn our attention to developing this as our next cash producing asset. "In light of the continued depressed iron ore pricing environment we have been investigating various projects that fit the criteria highlighted above and continue to do so. The appointment of Peter Hepburn-Brown to our Board and Peter George as COO will bolster our mine development expertise and can be leveraged both in terms of this new acquisition and any future ones. This experience will be highly beneficial as we closely plan our next steps at the Norton leases in Australia and we look forward to reporting these plans to the market.
"Talk about pulling a rabbit from the hat, and who expected it to be a golden one!" I did Oil, because, of course, this particular rabbit was nibbling on carats ;-)
Nobody expects the Spanish inquisition!! Talk about pulling a rabbit from the hat, and who expected it to be a golden one! Hopefully a good time here for a change. Is this the game changer? GLA
Anyone know how much it will cost to bring into production?
Good video clip.
Great RNS. Should fly today
Published on Nov 16, 2015 https://www.youtube.com/watch?v=LtAAgVs7qQQ Ferrex CEO Dave Reeves discusses the AIM listed the firm’s acquisition of Australian private company Chaffers Mining. The deal, according to Reeves, will enable Ferrex to commence production and cash generation with only working capital expenditure in Q2 2016. "It’s rare to find an opportunity which can deliver production in under six months from acquisition and therefore I am personally very excited about this project,” he says.
"Production targeted to commence Q2 2016, initially targeting 20,000 to 30,000 ounces per annum" "The current Australian dollar gold price is approximately A$1,550/oz. Ferrex is targeting C3 AISC of approximately A$900/oz, excluding royalties." so 22% royalty makes it $702 an oz x 25,000 = $17550000 converted to pounds = £8,182573.11 so how much will it cost to mine? ontinuing to develop Nayega as a low cost manganese export mining operation with a view of production within nine months of receipt of the Mining Permit, due imminently
Been a long time since we had a red dot, people still sleeping. We are moving.
Dave Reeves said, "It is very rare to find an opportunity which can deliver production in under six months from acquisition and therefore I am personally very excited about this project, which fits our goal of rapidly delivering cash flow at a low cost. Gold production will commence at 20,000 to 30,000 ounces per annum, the cash flows from which will be used towards the development of the Nayega manganese project in Togo when the permit is received. With our focus firmly on producing cash from these gold assets for the next six to nine months, I have no reason to believe that the Nayega permit will not be fully granted when we have the time to turn our attention to developing this as our next cash producing asset.
Ferrex plc, the AIM quoted resource development company, is pleased to announce that it has entered into an agreement to acquire 100% of Australian private company Chaffers Mining ('Chaffers'). Chaffers has negotiated a five year tribute agreement with Paddington Goldfields, a subsidiary of Norton Goldfields ('Norton') to mine certain defined gold deposits located on the Norton leases, located 30km north of Kalgoorlie in the heart of the Western Australian goldfields, for treatment at Norton's nearby Paddington processing plant. The acquisition will enable Ferrex to commence production and cash generation with only working capital expenditure in Q2 2016. The funds delivered will be used towards the development of the Nayega Manganese Project ('Nayega') located in Togo upon receipt of the mining permit. This acquisition follows a recently completed strategic review by the Company focused on how to best deliver rapid value to shareholders in the current commodity pricing environment. Overview · Low acquisition cost, cash generative mining opportunity in a geographically stable mining jurisdiction: o Production targeted to commence Q2 2016, initially targeting 20,000 to 30,000 ounces per annum o Agreement covers historic resources of more than 350,000 ounces of gold at a grade of 2g/t o Mining leases granted - deposits comprised of remnant resources below historic pits and previously unmined near-surface deposits o Limited working capital costs to commence production estimated at GBP300,000 o Leases located 25km from the mill in an area of excellent infrastructure o Ferrex to pay mining and processing costs, plus 22% royalty on gold recovered to Norton · Low cost consideration and addition of highly experienced mining personnel to Board and management which will add further significant and relevant skills to Ferrex
@Miller Who knows ;-) I wouldn't worry about it anyway. Not long now until this BB has posts every minute for days. Let's hope so eh! ML
Guys, Please remember some of us (hint hint) also had Limit Orders in and therefore the MM's will & can walk it down in order to execute trades. It's not always as it seems. ML
I don't know the answer to your question, but I did notice that there were 2 sells on ISDX on Friday morning - I think that they only amounted to about 250,000 shares. The sp moved down after these and the buys on AIM, which considerably outweighed the sells, didn't take the sp back to where it was. At the end of the day I'm looking for gains outside the current range and so unless there is something that I don't know about I don't suppose a relatively small blip makes a great deal of difference.
Do you use the explanation for dummies site a lot? My o level and a level economics gave me a reasonable understanding of supply and demand. The point you seem to be missing is there were no trades on Friday then the price got walked down. Surely the illiquid market would have caused the price to rise after they buying on Friday?
Do you use the explanation for dummies site a lot? My o level and a level economics gave me a reasonable understanding of supply and demand. The point you seem to be missing is there were no trades on Friday then the price got walked down. Surely the illiquid market would have caused the price to rise after they buying on Friday?
Si is the share liquid or illiquid? You seem to flip flop on that one?