Circle Property Share Discussion Threads

[reefseeker] 23/1/2007 14:34

pinhead3 - many thanks for your analysis on this board, it is much appreciated! I quite like the fact that there are so few posts here, its a good sign that this share should start to appreciate nicely once the herd works out what is going on here.

This is currently just 3% of portfolio but I plan to accumulate on weakness through 07 as we approach production volumes later this year.

[pinhead3] 17/1/2007 16:54

Congo general 'agrees to peace'

Laurent Nkunda may be given asylum in another country
The Democratic Republic of Congo's military has announced a peace deal with a dissident army general.
Laurent Nkunda has been leading a rebellion in the east, which has displaced thousands of people.

Col Delphin Kiyimbi told the BBC, Gen Nkunda's militia were to be integrated into the national army by 21 January.

The agreement comes three months after Joseph Kabila was elected as DR COngo's first president in 40 years, as part of a peace process to end a civil war.

Some 17,000 United Nations peacekeepers operate in the country, overseeing the peace process after the end of a bloody five-year war in 2002.

'Asylum'

The Congolese military says that, under the deal, Gen Nkunda will be given asylum in another country, despite outstanding war crimes charges against him.

The BBC's Emery Makumeno in the capital, Kinshasa, says the rebels have not confirmed any agreement.

Rwanda has recently been hosting talks between representatives of the Congolese government and Gen Nkunda.

Rwanda was accused of backing the general, who left the army and launched his own low-level rebellion after the war ended, saying that the country's transition to democracy was flawed and had excluded the minority Tutsi community.

The UN mission said it had helped facilitate the talks between the two sides, but was not aware of a peace agreement.

However, Col Kiyimbi explained that he had been put in charge of integrating Nkunda's fighters - estimated to be between 1,500 to 2,000 - into the army.

He said the operation would take place in Mweso in North Kivu region, and he was planning to create four brigades.

Our correspondent says the removal of the fighters could bring much-needed stability to the war-torn region.

Mr Kabila said on taking office that peace and stability in the east was his immediate priority.

[pinhead3] 15/1/2007 22:10

Just a reminder, Hinoba-an resource estimate / upgrade due this month.

[pinhead3] 02/1/2007 18:48

I'd expect the cu price to continue to fall in the first half of 2007 maybe even down to $5,000 tonne ($2.27) but should then recover depending upon warehouse levels & Asia demand.
$6,000-$6,500 ($2.73-$2.95) per tonne would be my estimate at the end of 2007.
Unless there is a collapse in the Chinese / Indian economies then the Cu price shouldn't fall enough to effect the viability of any of CRC projects.

[addas99] 20/12/2006 09:45

Some copper stats of interest, where's the price heading next year?

[pinhead3] 19/12/2006 14:49

It's good to see that the DRC at proactive on social & environmental issues.

'DJ Congo May Penalize 45 Cos For Mining Code Breaches -Min
LONDON (Dow Jones)--Forty-five mining companies of 75 operating in the
Democratic Republic of Congo have been given a five-day deadline to comply with
the country's environmental and social laws or be stripped of their mining
licenses, Minister of Mines Mathieu Kalele said Tuesday.

Kalele wouldn't name the companies in question but said it is the
government's duty to ensure every mining operator in Congo, whether local or
international, adheres to its corporate responsibilities.

After two months in his current role, Kalele said he has noticed many mining
companies don't meet the requirements of Congo's social and environmental laws.

"The mining code is clear in this matter," he told Dow Jones Newswires.

Each mining company granted a concession in Congo must sign two clauses, one
social and the other environmental.

"By the social clause, I mean that every investment in the mining sector must
have benefits that spill over into local communities," said Kalele. "Then,
every mining operator must respect his commitment to protect the environment in
his given concession as well as to the country's land resettlement plan."

It is in the interest of mining operators to respect these clauses if they
don't want to find themselves in the same situation as major oil companies in
Nigeria's Niger Delta, he said.

"People in the Niger Delta say they don't see the wealth derived from oil
exploitation trickling down into their communities and therefore resort to
siphoning off petrol from pipelines," Kalele said. A similar scenario could be
reenacted in Congo by artizanal miners, he added.

"To avoid such a scenario, a seminar will be organized soon for the benefit
of artizanal miners in Congo and which will help them understand that they
should consider artizanal mining as a step to become a middle class of miners,"
said Kalele.

Congo's Mining Concessions Authority, or Cami, has more than doubled the
number of mining concessions granted since the launch of the country's mining
code in 2002, Cami's technical director Justin Nyembo told Dow Jones Newswires.

The amount of state-owned land that's been opened up to prospecting has also
nearly doubled, Nyembo noted.

Around 30% of Congo's national territory is now being explored by major
international mining companies as well as Congolese private mining companies
and Gecamines, Congo's state-owned mining company. This is up from 16.3% before
the publication of the mining code.

Under Congo's new mining code, exploration licenses have been extended to
five years from two while mining licenses now have lengths of 30 years,
renewable for 15-year periods until the end of a mine's life.

Among the international mining companies operating in Congo are Australia's
BHP Billiton Ltd. (BHP), Anglo American PLC's (AAUK) Anglogold Ashanti,
U.S.-based Phelps Dodge Corp. (PD), Canada's First Quantam Minerals Ltd. (FM.T)
and U.K.-listed Central African Mining and Exploration Co. (CFM.LN)


-By Antoine Roger Lokongo, Dow Jones Newswires; [phone];
[e-mail]


(END) Dow Jones Newswires

19-12-06 1438GMT

Copyright (c) 2006 Dow Jones & Company, Inc.'

[pinhead3] 12/12/2006 10:55

That's 2 big broker to broker trades gone through. I wonder if that's to square their books after the recent rise or to fill a big order?

[pinhead3] 11/12/2006 12:03

Addas99
Bearing in mind that the capital requirement was estimated at $175m-$350m for Haib I'd probably think yes they would get a partner/s in. Can only guess on what terms.
Haib has previously had work carried out on Haib at varies times during it's life which was either deemed uncommercial (when cu prices were a lot lower) or then sold on.
CRC strategy would presumably be carry out scoping study (& then feasibility study), which CRC pays for & then if it's a 'goer' get in partners or raise finance externally.

The partner or equity/debt routes have their positives & negatives. However I personally I don't think CRC will have the cash/Balance Sheet reserves in time to move forward alone with Haib.

I would expect Misoshi, Lumbembe & the other DRC sites to kept 100% with CRC via the Forrest connections.

[addas99] 11/12/2006 09:17

pinhead, many thanks for your valuation update (590), I had also queried the absence of Hinoba-an update prior to the date you posted your reply...this is the reply I received overnight from Sree Bugden, PA to CEO;

"The new resource estimate will be announced as soon as it is ready, which will be in January. However, the NPV of the project, which is based on a 1998 scoping study, which will not be revised until the project design, is completed in the bankable feasibility study that is under way.

The gold discovery is in a part of the concession area and therefore is included in the JV. Infill drilling in this area has commenced and should be completed around March/April."

Do you think it likely that next year Haib will go the same route as Hinoba-an leaving CRC to fully concentrate on their DRC riches, even add here via Forrest connections?

[pinhead3] 10/12/2006 12:43

Good news a huge player is entering the DRC & in the same area as CRC.
Phelps Dodge 2005 turnover $8.3bn, op profit $1.8bn!

'Phelps Dodge Gives Conditional OK To Congo Mining Project
Phelps Dodge Corp. (PD) after Wednesday's closing bell said its board has given conditional approval to develop the initial mining project at the Tenke Fungurume copper/cobalt concession in the Katanga Province of the Democratic Republic of the Congo.'




'Phelps Dodge Conditionally Approves Tenke Fungurume Copper/Cobalt Mining Project in the Democratic Republic of the Congo
PHOENIX, Dec. 6 /PRNewswire-FirstCall/ -- Phelps Dodge Corp. (NYSE: PD) announced today its board of directors has given conditional approval to develop the initial mining project at the Tenke Fungurume copper/cobalt concession in the Katanga Province of the Democratic Republic of the Congo (DRC). Final approval is contingent upon obtaining governmental approval of agreements recently reached with Societe Nationale d'Electricite (SNEL), a DRC electricity provider.

The initial Tenke Fungurume project will include development of a mine and associated copper and cobalt processing facilities. It will require a capital investment of approximately $650 million. Phelps Dodge is responsible for providing 70 percent of the funding. Tenke Mining Corp., a partner in the project, is responsible for providing the other 30 percent.

A Phelps Dodge subsidiary will be the operator of the project. Ownership in the project is: Phelps Dodge, 57.75 percent; Tenke Mining Corp., 24.75 percent; and Gecamines, DRC's state-owned mining company, 17.5 percent.

Tenke Fungurume is considered to be one of the largest, highest-grade, undeveloped copper/cobalt concessions in the world today. An ongoing, extensive exploration program is continuing to develop reserves to support future expansions.

The initial project will focus on 103 million metric tons of oxide ore reserves. It is expected to be in full production in late 2008 or early 2009. During the first 10 years of mining, total annual production is projected to be approximately 250 million pounds of copper and 18 million pounds of cobalt. The life of the initial project is anticipated to be approximately 40 years.

Estimates are the initial project will employ up to 2,500 construction workers at peak construction and will create approximately 1,100 full-time jobs. Projections estimate an additional 5,000 indirect jobs will be created in surrounding communities.

"We are pleased to advance the Tenke Fungurume project," said J. Steven Whisler, chairman and chief executive officer of Phelps Dodge. "The mine and related processing facilities represent a major building block for the future of our company. Like all properties we operate, it will be managed so it is both efficient and environmentally responsible. The project will be an engine for industrial growth in the DRC, a major contributor to infrastructure development, and a stimulus for creating small businesses and improving hospitals, clinics, schools and agriculture in the region. We are pleased to partner with Gecamines and Tenke Mining to bring this project to life."

Phelps Dodge is one of the world's leading producers of copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company employs more than 15,000 people worldwide.

SOURCE Phelps Dodge Corp.
12/06/2006
CONTACT: Media, Peter J. Faur, [phone], or Investors, Stanton K. Rideout, [phone], both of Phelps Dodge Corp. '

[pinhead3] 10/12/2006 12:07

I've been doing so work around the Hinoba-an project based upon the HHPI 1998 feasibility study, re-creating it & varying the parameters.

HHPI 1998 survey Hinoba-an - original criteria per AIM lising document.
NPV project $243m
Mine life 15 years
Average production 56,000 tonnes pa (35K min 95K max)
Total implied production 840,000 tonnes
Capital $236m
Operating costs $0.48c /lb
10% discount rate
Long term price of copper$1.00/lb
IRR 28%

CRC share now 18.5% (92.5% X 20% JV)
Long term USD:GBP rate 1.85
CRC share JV $45m / £24.3m / 40.1p ps / 32.2p fd ps.

Additionally it was thought that precious metals would contribute $0.10 /lb but was not included in NPV as not enough work had been carried out.

Increasing the Cu price to $1.25/lb (per Kinsenda) gave
NPV $474m/ CRC share $87.6m / £47.4m / 78.2p ps / 62.9p fd ps.

Operating costs will have increased since 1998. Philippines inflation has been approx 7% pa & the USD/PHP rate has increased from approx 40 to approx 50 over the period 1998-2006. Indexing that increases the operating costs per lb to $0.66 / lb.
Increasing the operating costs + $1.25/lb copper price gave.
NPV $308m/ CRC share $56.9m / £30.8m / 50.8p ps / 40.9p fd.

The original survey did not include the top 15m & it is expected that the total resources at Hinoba-an will increase by approx 10%. This would increase the total production from 840,000 tonnes to 924,000 tonnes & potentially the mine life from 15 to 17 years.
Increasing the total production & mine life gave (+ $1.25/lb + op costs $0.66/lb).
NPV $331m / CRC share $61.2m / £33.1m / 54.6p ps / 44.0p ps fd.

A substantial gold mineralisation has been found at Hinoba-an that will significantly improve the rate of return of the project. Original survey estimated that the Au would contribute $0.10 /lb to the project.
Including $0.10 per lb gave (+$1.25/lb,+ op costs & 10% higher resources).
NPV $427m /CRC share $79.0m / £42.7m / 70.5p ps / 56.7p fd.

With Cu prices around the $3/lb mark it is conceivable that the long term Cu price used in the Q2 feasibility study could be as high as $1.50/lb (or 50% of current levels).
Increasing the Cu price to $1.50 / lb (+ all above) gave.
NPV $667m / CRC share $123.5m / £66.7m / £1.101 ps / £0.887 p fd.

There is potentially even more upside to this project with scope for capital & operational cost reduction now that partners are in place who have infrastructure (smelter,etc) in the Philippines.
If the copper price stayed at the current levels this would make this project worth £3.50 to CRC (£2.80 fd), although this is very unlikely over the next 15-18 years.

Based on the HHPI survey Hinoba-an is worth 40p (or 32.3p fd) without any cost / time outlay for CRC & greatly reduced risk. I'd now reduce the discount risk on Hinoba-an to 10% from 40% giving a discounted value of 36.1p (or 29.1p)

I expect that the survey in Q2 07 will included 10% higher resources, higher cu price, higher op costs & the Au contribution. On this basing Hinoba-an is worth minimum of 70.5p (or 56.7p fd). At this stage there is a higher degree of uncertainty on these changes so I'd apply a 20% discount. This gives a discounted valution of 56.4p (or 45.4p fd).

With Kinsenda alone worth 90p (fully diluted & discounted at 15%) or approx the current sp, Hinoba-an a potential 45p asset (50% share price upside) is for free at these levels.

[unionhall] 08/12/2006 18:43

No indeed .....

(they're behind you ...)

[spacecowboy3] 08/12/2006 17:20

pinhead3 -

You are not alone! ;-)

Thanks for the update on the update, even if it's not really what we wanted to hear.

[pinhead3] 08/12/2006 16:49

Seems very lonely here at the moment.

[pinhead3] 08/12/2006 13:26

There must be a large sell order around holding the share price down, far more buys than sells today so far.

[pinhead3] 07/12/2006 22:30

CRC has got be one of the AIM mining stocks with the biggest potential but fewest posters. Mind you I'm not complaining at least we don't have any nutters posting here.

[aspers] 07/12/2006 22:16

Looks at last my mining shares are going in the right direction, nice rise on this the past 2 days and my RRR have jumped 24% in the past 2 days!!! lets hope for a prosperous new year!!

[pinhead3] 07/12/2006 20:02

A quick calc on Hinoba-an
CRC share 20% of 92.5% = 18.5%
NPV project (1998) $243m
CRC share $45m or £24.3m or 40p undiluted / 32.3p fully diluted.

Now this may seem very low however bare in mind the following.
1998 study based on $1/lb copper price, Kinsenda 25% higher & current price is over 3 times higher.
Excludes gold deposits, expected big improvement to return.
Reserves (when update is finally provided!) are expected to increase by 10%
There will not be any dilution for share issues,etc for funding
Risk of this project is now dramatically reduced.

So in short CRC's potential return on Hinoba-an is 80% down but the chances of realising it & the timescale (IMO) have greatly improved.

Fair value now even just on Kinsenda (90p) & Hinoba-an (32p) is £1.22p & that's based on fully diluted NPV project calculations with very low copper prices.

I wonder what will happen with the share price tomorrow?

[pinhead3] 07/12/2006 19:31

Been away from laptop all day & I missed all the action (+ on FEP)!

Initial reaction is dissapointment that CRC only has 20%. However considering that the estimated capex required for this project was $268m & they don't need to manage the project or provide any financing at all to get 20% of the profits this will become a huge cash machine for CRC.

I still wondering whatever happened to the resource upgrade but I guess CRC were distracted by this, no wonder they weren't replying to my requests for an update!

With the expert partners aboard this project will surely be up & running a lot quicker. Timescales? Q2 for feasibilty study so is it possible to be up & running by the end of 2007?

This JV leaves the mngt free to concentrate on Kinsenda & Haib the other 3 DRC sites.
Good news all round & maybe will even bring more acquisitions closer.

I'll try to work through revised valuation for Hinoba-an over the weekend.

Oh by the way don't forget about the substantial gold mineralisation at Hinoba-an!

[unionhall] 07/12/2006 16:21

£6bn of recoverable copper at today's prices.

Value at say 5% = £300m

@ 20% = £60m for no further outlay.

Current market cap approx - £60m


(Adam et al who know more than I about these valuations - is that a reasonable start point ?)

[unionhall] 07/12/2006 15:43

Best possible news - companies with the resources and skills to extract value from the project with minimal delays.

And pay CRC 20% of profits for no further investment and without distracting from the main money spinner in Kinsenda.

Pinhead - I guess I'll have to ascribe some value to Hinoba-an now.....

[addas99] 07/12/2006 15:23

PASAR is the sole copper smelter and refinery in the Philippines. PASAR is situated on the coast and owns its own port. It was acquired by a subsidiary of Glencore in 1999.

[addas99] 07/12/2006 15:01

ramnik..this is AIM, annoying but what's new. Three parties involved.

[addas99] 07/12/2006 15:00

Like it. It's surely a sensible tack to take when they've their hands full with their number one, Kinsenda, three other Congo sites to develop and Haib.
A very promising tie up imo.