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Real-Time news about Finders Res. (London Stock Exchange): 0 recent articles
|tarnow: Hectorp, this share hasn't re-rated for one reason, and that is permits. Now if we get them, and for my reasons outlined in my last post we should by Jan/Feb next year. Then it is game on. The only danger then is falling copper price(highly unlikely), or massive dilution/hedging. For me here is the scenario. Take Blackswann's report of 400 million shares, when dilution has finished. Now hopefully hedging will be minimum, or at 9,000 a tonne plus (Copper price forecast upto 12,000 tonne 2012). Runrate of 23,000 tonnes starting by Q3 2012. Gives 200 million dollars plus earnings. P/E of 4 gives company value of 800 million or $2 a share. 5x current price. Unrealistic? I think not. Even if these conditions don't all materialise, the share price has plenty of room to grow. Forget to mention a potential gold/silver mine of 1 million plus ounces in a gold/silver bull market. Hectorp, this and another of our shares (HMB) are potentially fantastic next year. I have learnt my lesson this year by pain. I have lost alot of potential profit by lacking patience and selling too early only to see my hopes/expectations for a share come true. With HMB and FND I hope not to make the same mistake. Next month could tell us alot about both companies. Best scenario FND gets pemit, and HMB releases good production figures. Look on the bright side :-) All the best|
You will probably find that HL will offer you the opportunity to sell via an HL organised block trade from time to time - but of course you can choose to ignore. They simply make the offer as part of their service.
The A$ is trending up against the GB£. Not surprising given the debts we are saddled with and in comparison to the Oz economy which is heavily biased to resources.
I would have thought that there is a strong probability of rising copper price against the US$ & UK£. Perhaps copper may be neutral in A$ terms but any improvements to FND prospects should translate to an improved ASX share price with an added improvement in comparison to a falling UK£ (IMO of course).
|tarnow: Thanks JF. I think we will always be about 2p below the share price on the ASX, as the secondary market. As long as there is a 1p spread, (now 1/2p) and decent volume to buy and sell. I can live with that. Although not happy obviously. As you know the shareholding on this share is very tight. With over 50% held by the major shareholders as listed in the latest RNS. That means that if people what to buy into FND, the volume is very limited and this share will fly. Because can't I see any large sellers out there. Significant shareholders all increased stake in latest placing. Even disgruntled shareholders Tennant will wait for $1.00 Aus before selling out.
The fundamentals of copper are best of all the base metals. And at 12,000 a tonne if FND is in full production. We will get our rewards. Patience :-). If FND gets Ojolali into swing as well with anticipated higher gold/silver prices. Then my valuations will easily exceeded. But always be conservative and hope to be surprised on the upside. Looking good here :-)|
|tarnow: Hi Coffelito. Using Chips calculations, I came up with my own valuation. Based on just wetar and a PER of 4 (Average for metals on ASX: source Mining Valuation Handbook) gives a price with current share issue of 87p. Using price to cashflow of 3 (source: same book) gives price of 83p. We have 7 million shares left to dilute with options and convertible loan. Insignificant amount. However any more dilution for fund raising is any ones guess. But I think a lot of companies like equity placings as they see them as easy money, and keeps the large shareholders onside. However FND could fund stage 2 from loans.
The latest Blackswann broker report gave 400 million fully diluted. I hope not :-(. Based on current copper price came up with NPV of $312 million or 68p a share. Which still makes FND undervalued and a good buy. I valued ojolali at about 10p share or 30 million. As this seems comparable with other explorers of 1 million ounce resource which I'm confident will get to. Always had in mind a Market Cap of around 300 to 400 million for FND when I first came across them. With current share issue still comes out around 100p to 145p (depending on final total of shares in issue). Which no one can predict. That is the thing Coffeelito. It's interesting to try to come up with valuations, but they are after all just guesses. The main thing is I still see FND as undervalued and still expect multiples (minimum 3)of this share price by 2013.
Upside see as copper price higher than now. Ojolali- great potential, and not priced in. Especially if they can get demo plant into production quickly, although with Indonesia nothing mining happens quick.
Downside is share dilution. More permit delays. Fall in copper price.
It pays to be conservative on estimations and future and be surprised to the upside. Even being conservative FND is still a buy in my book. All the best Tarnow|
|harveydee: Including options etc. I calculate there are currently about 280m shares of fnd in issue. If we target 50p share price that's a valuation of £140m. Further fundraising(s) will add to the Market cap of course. What sort of Market cap do others here feel is a realistic target ? Thanks.|
|coffeelito: Just had telephone chat with a chap in the Finders finance department. Took some notes as follows:
re. "forced" disclosure on fundraising: there is a deficiency in the asx form which does not allow you to take into account expected revenues, just focuses on costs ..
re. permits: no suggestion at all that we wont get our permits, its a question of when not if .. but obviously things work differently in indonesia to a western country .. there's always speculation .. we 100% confident that we will get our permit
re. legal threat: sometimes u dont have the choice of when u put out an announcement. we think their claim is totally baseless but the rules are that we have to tell the market. Are a lot of things behind it that publicly we cannot talk about. they invested $5m, even in worst case scenario and we had to pay all of that it would still only have minimal impact on share price
Action on australian market today shows investors here are more sanguine.
re. Ojolali find analysis, still no results: indonesia not the quickest place, maybe we should have said would take more than 2 weeks, am aware that it creates expectations ..
re. fundraising: again, things dont move as quickly as we all hope. getting all the costings, quotes from contractors in indonesia etc.
re. whether things are behind schedule: permits and fundraising issues have caused some delay ..
in summary: things have not changed significantly, the delays are disappointing but beyond our control. chris farmer the md lives there and knows how to deal with the indonesian government.
PS - As I write, Finders share price in Aus. is down 4.6% with almost 100,000 shares traded.|
|coffeelito: Dr. Russell Fountain seems to be the key link between GR (chairman)and FND (non-executive chairman).
In a presentation this month, GR talked about the potential to find "an elephant" (massive gold deposit I presume) in Fiji, where it is operating.
So let's hope they've found that elephant and that the value of FND's shareholding in GR might increase so that it could alone account for a bigger chunk of FND's current market cap.
GR's pre-suspension market cap is c. £60m, based on c. 145,000,000 shares in issue and a share price of A$0.70.|
I don't think it is possible to "have all the facts" at this stage for FND. If we did, and the market was efficient, then by definition, there would be no upside potential. But I emphasise with your feelings. There is little support for the stock on both exchanges even though FND is already a small producer and has completed it's DFS for the Wetar project.
But we do have 'facts' regarding the size and grade of the copper reserve & resource. We have the hard conclusions from the DFS and we have the solid production achieved from the pilot plant which is the enabler for the whole project.
However, we do not yet know how and when (or if) the funding for phases 1&2 will be achieved. How much will be as debt and how much new equity will be required and at what price will this be secured. This uncertainty and the current weakening in the copper price are both bearish factors which are currently taking their toll.
From my point of view, I have been in this situation many times before and I am currently in similar situations with other stocks as well. I go to a great deal of time and trouble to research and model lots of projects and then build positions in those which look to have (in my opinion) the highest probability of success and upside potential. But alongside all the 'facts' are also many unknowns which require the application of assumptions which may often fall outside the control of the company itself. Clearly, the future price of their product and the risk appetite of banks and the equity market are examples of such factors which have bearing on FND right now and which make the forecasting of future earnings somewhat difficult.
However, all that being said, I still hold the view that the project has a high probability of coming good for FND and that shareholders will eventually benefit from significant earnings upside. So I am dug-in on a 3-5 year view and I am not particularly phased by current weakness in the share price. To be honest, I have rarely found that the majority of my buying has been at the lowest possible price and I have often had to endure long delays and major changes in market sentiment before real progress and an enduring up-trend has finally become established. There are no guarantees of course. Sometimes things just don't work out. But until there is some meaningful change to the story for FND I see no rational reason to change my view on their prospects.
|tarnow: It's been about a year now from my first investment in FND. I have to say it has been disappointing. But I'm sticking with them for a while longer yet. For two reasons. I believe, as we all do I think. That when FND is in full production next year it will be re-rated. If it is not, then a hefty dividend would suffice from the profits the company makes. Reason no 2 is the Ojolali project. The latest drill results were disappointing, but in Tambang we could possibly have a low cost silver mine on our hands. I'm incredibly bullish about precious metals in the next 3-5 years. In FND we have a gold/silver explorer thrown in for "free". What I mean by that is FND has a viable low cost profitable copper mine which will make money and increase the share price by itself. Which means the exploration side is very low risk. As even if they find nothing, the copper mine will make profits for shareholders regardless. Now if they do find and start a viable silver/gold mine. Then it is my belief it will be producing when we are entering a precious metal mania. Governments all around the world have printed too much money devaluing all currencies. Only "hard" assests (commodities) will keep their value. In particular gold/silver. That's why I am, and continue to be a shareholder despite disapointment todate. Patience!!!|
|clearsoup: Uplifting comment from Ocean Equities 080909 note, p8.
... companies with lots of promise but no production spectacularly outperformed those in production.
The question is why, and Dryblower has an answer which will please everyone in the mining game it is because fat cat investors, hedge
funds, and global metal traders are buying their seats at the table for the next phase of China's industrial revolution.
A few numbers will help illustrate how a new phase in the commodities stampede started without too many people noticing.
The rush was led by Marengo Mining, which shot almost 60% higher thanks to a funding deal.
Note that well. Not on drill results. Not on a mine plan. Not on first production, but a deal which saw one of the world's richest men, George
Soros, provide most of an extra $22 million in fresh capital for Marengo to expand exploration at its undeveloped Yandera copper project in
Papua New Guinea.
World-class in its potential, Yandera is years (perhaps a decade) away from producing its first pound of copper, not to mention the billion
dollars required to develop a copper mine in the highlands of PNG. But, as Marengo's share price was shooting up from pre-funding deal of
10.5c to a high of 19c on Thursday (before slipping to a Friday closing price of 16.5c), it was joined by other companies with promising, but
undeveloped, copper prospects.
Rex Minerals, which seems to be onto something big in South Australia that is years away from production, rose from $1.60 to $2.01, a gain
of 25% in a week, without much fresh news from the field.
Sandfire Resources, which is travelling hopefully at its Doolgunna project in WA, gained 16%.
Citadel, a Saudi Arabian-focused copper play, rose by 12%, and CuDeco, a Queensland copper explorer with what might be a big discovery,
Now, consider the flipside of those share price rises by companies that are exploring, not producing.
The copper price fell over the past week, not by much, but, according to figures from the London Metal Exchange, copper closed on Friday
around US5c lower than a week earlier.
The price earned by Australian producers would have been slightly lower still because the Aussie dollar rose by around US1c.
That marginal slip in the copper price and the rise in the Aussie dollar caused the share price of OZ Minerals, one of the bigger local copper
miners, to fall by 2c, while two Africa-focused, but Australia-listed miners, Anvil and Equinox, rose by a marginal 4c and 2c respectively, or
less than 2% each.
The gap between the producers, which barely rose or even fell a little, and the explorers, which put in double-digit rises,
caught Dryblower's eye, especially in a week when the copper prices fell and the Aussie currency moved against miners.
An event like that is called an anomaly. It's what geologists (and journalists) hunt for because it tells a story of something different
happening, and that difference is called discovery.
Dryblower's discovery last week was that some of the world's richest people are looking for a ground-floor start in the next phase of the
The theory is that risk-capital invested at this stage of a project will yield a 10 or 20-fold return as (a) exploration delivers results, (b)
development options become clearer, and (c) demand for minerals from countries such as China drives commodity prices higher.
In other words, now is a time for investors with an appetite to buy a speculative position which maximises their exposure to future mine
For investment novices this is an extremely encouraging indication of better overall stock market conditions in the years ahead because the
people investing now are the smartest in the room, for two reasons.
First because they actually have some money left to invest, and second because they recognise that the commodity price and investment
cycles are moving up, and now is a time to place your bets on the stocks most likely to succeed outrageously in the future, not those tonking
along with an operational mine today.|
Finders Resources share price data is direct from the London Stock Exchange