Blencowe Resources: Aspiring to become one of the largest graphite producers in the world. Watch the video here.
An interesting article on the significant growth in capital expenditure on copper; and the implications.
https://www.fin24.com/Opinion/miners-are-budgeting-for-a-recovery-in-copper-20190201-2
More likely Australian Super, who went over 10% of MOD this week.
Now you know that the short-term MOD price - driven by PIs and others flipping because of the rights issue - is pretty much irrelevant, given the offer of 38c.
The more relevant question is will Sandfire or others offer MOD more; or will we need to wait a few months for DFS news to clarify truer value?
Copper at $2.77 now. Not far to go to get to the highest level since July.
Who knows if copper price continues to rise in the short term - as fundamentals and most commentators suggest it will in the medium and long terms - the DFS numbers will look a lot stronger (and the price Sandfire, or other suitors, would need to pay will be so much higher).
A reminder of how good the numbers look for MTR - even at the level of the offer from Sandfire, which was turned down by MOD.
- MTR holds 29,564,220 MOD shares
- after the rights issue, which MTR has said it will participate in, that will increase to about 32 million MOD shares
- that equates to £6.7 million at 38c per share at the current 55c to £1 exchange rate
- under the T3 deal, MTR then has free options to acquire the 40,673,566 shares for free - at 38c per share those would be worth £8.5 million
- so in total - at the level of the rejected Sandfire offer - MTR's holding would be worth £15.2 million.
That's not too shabby, given that MTR's current MCap is just £18.5 million and it would still additionally hold cash; shares in THR, GGP, others; KEMCO interests; the JV with KML; 30% of the JV across much of the current MOD landholding (but the JV would in this scenario now be with Sandfire).
Now at $2.74 - the highest since mid-December.
http://www.livecharts.co.uk/MarketCharts/copper.php
Who knows if the copper price recovery will continue - though all fundamentals and the majority of analysts and commentators thinks it will. If it does it bodes well for the forthcoming DFS.
Now at $2.73 - the highest since mid-December.
http://www.livecharts.co.uk/MarketCharts/copper.php
Copper up from $2.63 yesterday to $2.70 now.
As Hedged has rightly reminded us, the copper price is important for the BFS. Copper (like some other metals) has bounced strongly today - up from $2.63 yesterday to $2.70 now.
The discussion seems to be getting a bit negative on the basis of not much. I've seen nothing to suggest significant timetable slip here (though like you, I can only go on what the company tells us). What they're telling us sounds broadly on timetable to me:
18 Oct: "This additional infill drilling, data assessment and rework of the mine design and schedule to be completed over the next 4-6 months is expected to increase Ore Reserve tonnage's available for incorporation into the mine schedule and significantly enhance project economics."
14 Nov: "Drilling underway"
28 Nov: Placing for $3.3m, of which $1m for BFS
18 Dec: 2 drill rigs mobilised, 4 holes completed. 2 more rigs externally sourced
25 Jan: Assays from first 4 holes. Now drilled 3,000m out of 4,800m total.
That's over 60% done, and now using 5 drill rigs now, compared with 2 before late December, so reasonable to assume drilling finished by end Feb on current rate of progress (assuming no weather or other problems); and by sourcing external rigs, management are in fact doing all they can to stay on target. Based on waiting five weeks for assay results for first four holes, it seems reasonable to assume final assays by early April.
Tardis's estimate of May for BKM investment announcement sounds fair to me.
Money shouldn't run out - ARS raised $1m for BKM drilling. Even if that goes over-budget (there's no basis for that but let's imagine that hiring in rigs has led to an overspend on original budget) $1m was set aside for BKZ drilling and for Baroi so not too challenging to move some money around.
Like Tardis, I've bought some more.
- Freeport McMoRan plunges nearly 10% after Q4 earnings missed expectations as copper prices dropped, prompting it to forecast a 13% drop in copper production this year.
- CEO Richard Adkerson remained upbeat in today's earnings conference call, saying "The fundamentals of the copper market point to a very positive future... Copper prices simply have to rise."
- Adkerson predicted the market likely will see "really, really high copper prices... How are you going to replace the top 10 mines in 10 years? It’s not going to come from what’s on the schedule now."
- The CEO said he expected "a strong desire for companies to expand their copper business," over the longer term, but opportunities for investment will be limited by geology, politics and the nature of available ore bodies.
- Freeport McMoRan plunges nearly 10% after Q4 earnings missed expectations as copper prices dropped, prompting it to forecast a 13% drop in copper production this year.
- CEO Richard Adkerson remained upbeat in today's earnings conference call, saying "The fundamentals of the copper market point to a very positive future... Copper prices simply have to rise."
- Adkerson predicted the market likely will see "really, really high copper prices... How are you going to replace the top 10 mines in 10 years? It’s not going to come from what’s on the schedule now."
The CEO said he expected "a strong desire for companies to expand their copper business," over the longer term, but opportunities for investment will be limited by geology, politics and the nature of available ore bodies.
Sorry that the formatting went awry in my last post.
How to value MTR?
See the latest from Sprott, issued on Monday: "we see today’s news as a triple-win for Metal Tiger. Firstly, we estimate a 38c script bid – if it eventuates - values MTR’s stock at 2.2p/sh including cash and exploration holding at pre-announcement value, an increase of 46% from its current price. Secondly, if MOD goes ahead with an equity raise, Metal Tiger is well funded to follow its rights and cover 30% of regional drilling, and at spot prices has double the leverage to exploration success of MOD with its 30% exploration asset-level holding and 24% FD TopCo holding. Finally, under either scenario, Metal Tiger can retain its exposure to the last underexplored sedimentary copper belt globally."
So even at just 38c per MOD share, Sprott suggests that supports 2.2p per MTR share - so not really looking "toppy". See Sprott's arguments here.
https://www.modresources.com.au/sites/default/files/research_reports/Sprott%20-%20Proposed%20MOD%20Raise%20and%20Sandfire%20Bid%20Interest.pdf
As Cashking thought the SP was looking a bit "toppy", I thought I might re-run the numbers from my post of this morning - but this time based on the new valuation from Edison Investment Research.https://www.edisoninvestmentresearch.com/research/report/mod-resources157934/preview/Edison values MOD at 75c a share. Were such an offer made and accepted by MOD it would be worth about £27.5 million to MTR:- MTR holds 30.97 million MOD shares- after the rights issue, which MTR has said it will participate in, that will increase to 33.35 million MOD shares- that equates to £13.75 million at 75c per share at the current 55c to £1 exchange rate- under the T3 deal, MTR then has free options to acquire the same shares for free (I assume but haven't checked that that also applies to the new shares issued under the rights issue)- that doubles the value to MTR to bring the total to £27.5 million - well below the current £21.5 million MTR MCap.MTR would still additionally hold cash; shares in THR, GGP, others; KEMCO interests; the JV with KML; 30% of the JV across much of the current MOD landholding, but the JV would in this scenario now be with Sandfire.Perhaps Edison has overvalued MOD at 75c? Well, perhaps they have. Yet Canaccord Genuity rates MOD a buy at 85c and Arden partners rates MOD a buy at 52p (94c).https://www.modresources.com.au/sites/default/files/research_reports/Canaccord%20-%20Shot%20over%20the%20bow%20met%20with%20a%20shot%20in%20the%20arm.pdfhttps://www.modresources.com.au/sites/default/files/research_reports/Arden_Copper_Outlook_Jan19.pdf
Nothing substantial, but tweet just out:
"The infill drilling programme at the BKM copper project has been progressing well & we expect to update on initial results soon"
https://twitter.com/AsiametTweets/status/1088011343276400640
This looks promising.
https://constructionreviewonline.com/2019/01/construction-of-us-9-5m-trans-kalahari-railway-to-commence/
Hi jeffry
Like most commentators I'd not expect an offer of 50c to be accepted. But in the scenario in which it was I think it would be worth about £18.35 million to MTR. Obviously I'd be happy to be made aware of any errors or erroneous assumptions in the following:
- MTR holds 30.97 million MOD shares
- after the rights issue, which MTR has said it will participate in, that will increase to 33.35 million MOD shares
- that equates to £9.175 million at 50c per share at the current 55c to £1 exchange rate
- under the T3 deal, MTR then has free options to acquire the same shares for free (I assume but haven't checked that that also applies to the new shares issued under the rights issue)
- that doubles the value to MTR to bring the total to £18.35 million
Of course MTR would still additionally hold cash; shares in THR, GGP, others; KEMCO interests; the JV with KML; 30% of the JV across much of the current MOD landholding, but the JV would in this scenario now be with Sandfire.
Casey
You're right.
Two 2019 research notes on MOD value them at 39p and 52p per share respectively. If we take today's report at face value MOD said no to AUS$0.37 - not surprisingly.
But let's suppose theoretically MOD says yes to 39p. That gives MTR £24 million. Add £2 million for THR, GGP, others; add £1 million for KML, Thailand; add £3 million for cash. That gives £30 million value - or over 2p per share.
No doubt people can come up with smaller numbers and larger numbers.
So in that scenario MOD SP covers MTR MCap on its own. Without thinking of holdings in THR, GGP, others; without exploration potential via KML; without any thought for Thai interests. Not turning back into a bull are you Cashking?