Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Viv - we don't know what form the sale will take but the price won't be momentary. It is likely the SP will rise to just below the planned sale price then you will have the chance to cash in or wait for the sale to go through.
"After EUA what do others here feel is another solid investment, I have been looking at GGP was curious whats others opinion is if any ?"
Not sure if solid investment is what you are looking for - if we are wanting something to follow on from EUA it is surely going to be a speculative high flier. I am looking at small Pd plays and in particular the Canadian companies PDM (in which I have already doubled my money) and VO (Valor).
The other play in this category is the Munni Munni resource in Australia, which is curently owned by Artemis but is trying to be bought (in dispute) by EEE.
I got into TRX earlier this year and am now getting to like it. I was fortunate to be able to buy into the (horrible) placing, which left my average cost as 0.44p so am into a decent profit. I am now expecting to hold for a good long time.
Just come across this company and have to say it is rather unusual. Loads of different opportunities, with no definite evidence for any of them. This could be one for the pure gambler, good odds that one of the 8 areas will prove fruitful. On the other hand a market cap of 17M is high for a company with no proved resources – that is more typical of a junior minor that has already made a discovery.
When we all get our vast amounts of cash from the sale, many will be looking to invest in the next Pd opportunity. There are three small cap exploration plays with resources in Brazil, Australia and Finland and it could be a good idea to start investing in these now, before the EAU cash pushes the price up. To my mind the best one to go for is Palladium One in Finland. To summarise the three:
The Munni Munni resource in Australia holds around 1.1Moz of palladium. Artemis (ARV on the Australian exchange ARX) sold part of the resource to Empire Metals (EEE) for a very small amount, with EEE getting shares in ARV. However, the deal is being contested in the courts, so this is very uncertain. One to monitor.
The Pedra Branca resource in Brazil holds around 1Moz of palladium and was owned by Jangada Mines (JAN), who sold it to ValOre Mining Corp (VO the Canadian exchange CVE), again for a very small amount, but including shares in VO. JAN have subsequently cashed in some of the shares, so investing in VO is the better exposure to the palladium. VO has a total MCap of only US$18m, including various other resources, so there is a large potential upside. The share price is currently showing no sign of shooting up but is one to keep a careful eye on.
Palladium One (PDM on the Toronto Exchange) is drilling a site (LK) not far from MT over the border in Finland. The estimated resource was around 1M Oz Pd until the announcement this week ‘significantly increased’ the estimate. The CEO stated “LK is shaping up to potentially be the largest palladium dominant open pit project in a best in class mining jurisdiction, globally.” I guess that means that he regards Finland as a better place to do business than Russia (or South Africa). Anyway, the share price has risen from C$9 to C$17 this week which still gives a market capitalisation of only £12.5M including their other projects – well worth looking at.
Palladium One (PDM on Toronto Exchange) is drilling a site not far from MT over the border in Finland. The estimated resource was around 1M Oz Pd until the announcement this week ‘significantly increased’ the estimate. The CEO stated “LK is shaping up to potentially be the largest palladium dominant open pit project in a best in class mining jurisdiction, globally.” I guess that means that he regards Finland as a better place to do business than Russia (or South Africa).
Anyway, the share price has risen from C$9 to C$17 this week which still gives a market capitalisation of only £12.5M including their other projects – well worth looking at.
Hi Bristol
I am always interested in looking at small cap companies recommended on here (after all that is how I found EAU in the first place on another board), but I am having problems researching BOIL - can you point me at anything to justify your post?
Cheers
I have done a massive amount of research and am totally confident that my very large profits will increase more ..... but I can sympathise with Kev getting the heebie jeebies - don't be down on him!
How to value in-ground resources? I have come across 2 examples of Pd resources being sold recently - roughly figures are as follows:
• Sale of Pedra Branca from JAN to ValOre. In ground value of £4.7B sold for £6.4M – return of 0.14%.
• Sale of Munni Munni from Artemis to EEE (now contested). In ground value of £0.8B sold for £2M – return of 0.25%
In both cases shares were awarded in the buying company so the seller will benefit from any exploitation, so the percentage return should end up considerably higher - maybe 10x higher.
On the other hand, if a company is deciding to mine their own deposit what return would they expect? Given the vagaries of metal prices, I can’t see mining being started unless they were calculating at least a 30% return, and probably considerably more.
We have a big disconnect here. I assume it is a question of having the capital to do the mining, taking the risk on getting the return, and investing the time to get that return. So a large company can buy a potential mine at say 3% of its value and exploit it at say 30%.
As an aside, EUA’s potential return is over 80%, and they are in a position to mine it themselves, so expect a much higher sale price.
OK I now I understand where the figures come from -JAN's initial assumption of 40m to 60m tons of ore multipied by the yield from the drilling programme. So if their assumptions are right we have an in-ground value of over $7bn. Does anyone know the normal company valuation from in-gound values for minerals of this type?
Taking an arbitrary share value of 2% of in-ground value (based on no facts whatever) as an illustration, that works out as 45p per share, plus the ValOre holding which I took a punt on as 25p per share.
I am not expecting to see anything like these share prices, but to me that makes it a good buy!