Merrill Lynch World Mining Share Discussion Threads

[arja] 24/11/2006 10:43

now running at about 65p discount to NAV!! disappointing !

[arja] 07/11/2006 08:57

think I got my sums wrong ! If NAV reportec at about 505 later, we may have reached top today at 454! but chart looks good for medium term holders !

[arja] 07/11/2006 08:53

seems to run at about 50p discount to NAV. Hence might get to 460 today unless XTA,AAL etc. start to tumble later on !

[bionicdog] 06/11/2006 16:37

This is getting a bit interesting.

[arja] 27/10/2006 07:38

they were down on profit taking apart from ZFX which edged up a bit .

[arja] 26/10/2006 19:34

might pullback a little tomorrow as mining stocks in OZ likley to be down on profit taking . IF so, good opportunity to buy !

[arja] 25/10/2006 07:37

good rises in OZ in ZFX,BHP and RIO may help MLW share price today .

[arja] 23/10/2006 11:38

better to use a spreadbet as leveraged to share price and not paying a lot of time value as you do with warrants .

[mitzy] 20/10/2006 13:44

Agreed. Indeed, I picked up some more MLWT this morning.

[mart] 20/10/2006 08:35

MLWT is the one for me!

[arja] 20/10/2006 08:30

looks undervalued with spread widening . But these MM stocks make me sick and wide share price spread makes it a difficult stock to accumulate !

[arja] 12/10/2006 11:40

mattybuoy,
It would be a nice change but I think most investment trusts trade at a discount to NAV . I tend to play the market short term as hard enough to forecast base metals short term on charts but you may well be right about longer term outlook. share price looks good at present for move to at least 410 with AAL, XTA, BLT and RIO looking stronger . Just about to go long on it with spreadbet ! good luck

[mattybuoy] 09/10/2006 18:05

arja,

The discount is good! One day it will become a premium :)

It just shows that the "market" does not believe in the commodities boom yet. Give them another five years or so and they might wake up ;)

[bionicdog] 09/10/2006 17:50

Fascinating stuff.

[rowitt] 09/10/2006 16:21

Been advised to buy these.

[arja] 08/9/2006 12:15

It disturbs that MLW trades at such a wide discount to it's NAV - about 17% at present with share price at 407 !

[vishpatel] 07/9/2006 13:00

thanks coincall

[coincall] 07/9/2006 10:33

vishpatel

Go to the other thread for news updates and look at NAV, note diluted price and then work out the discount...it's pretty good (also try MLWT if you are interested in a geared play and look at charts for the last 6 months. Click on link below).



Net Asset Value(s)

RNS Number:5785I
Merrill Lynch World Mining Tst PLC
06 September 2006


NET ASSET VALUE

MERRILL LYNCH WORLD MINING TRUST plc

The unaudited net asset value for Merrill Lynch World Mining Trust plc at close
of business on 6 September 2006 was:

488.26p undiluted
480.05p diluted

MLWT chart for last 6 months

[vishpatel] 07/9/2006 10:09

anyone got an opinion on this going forward? Any holders about?

I'm looking to get in - looks like the time might be right.

[bionicdog] 22/8/2006 08:05

Why this rich seam should last

Booming prices and profits have led to a flurry of takeovers

Marianne Barriaux
Tuesday August 22, 2006
The Guardian


The mining industry has never had it so good. Soaring commodity prices - nickel hit a record of $29,200 a tonne last week - driven by a shortage of supply and increasing demand have led to bumper profits for big and small mining groups.
The huge amount of cash generated has led to increasingly audacious mergers and acquisitions, as illustrated by Brazil's CVRD, one of the largest miners in the world, which recently launched a C$19.4bn (£9.2bn) all-cash bid for the Canadian nickel producer Inco.


Article continues

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Xstrata has also secured its long-awaited acquisition of the Canadian miner Falconbridge for £9bn, after battling it out with Inco, Phelps Dodge and Teck Cominco for the best part of a year. Other companies are now regarded as potential targets. Even Anglo American, the world's third biggest miner, is said to be a target once it demerges its non-core paper and packaging division. In the current cycle of high commodity prices, it seems anything is possible.
Analysts acknowledge that these acquisitions are value enhancing. The integration of Falconbridge, a copper and nickel producer, will catapult Xstrata into the lucrative nickel market. Antofagasta's £211m bid for Equatorial Mining will give it control of the El Tesoro copper mine in Chile, increasing its presence in the global copper market.

But with worldwide demand surpassing worldwide supply, one area of concern remains. Existing operations have been running at full capacity for the past three years, and there is little excess to replace production shortfalls. More importantly, there is a shortage of major new mines coming on stream. The big groups are getting rid of their plentiful cash by returning it to shareholders - Anglo American delighted investors by announcing it would hand back $5bn (£2.6bn) to shareholders after bumper results in the first half of the year and BHP Billiton is expected to announce a second share buyback of at least $2bn on Wednesday - but commodity users may well ask why they are not investing more of their excess cash in new projects to address future demand. Admittedly, BHP Billiton, the world's biggest miner, is developing $10bn worth of new projects. But it has forecast it will spend only $600m this year on exploration, and just $160m of that will be spent on mining. In fact, it is much cheaper and easier for a company to take over another valuable operator rather than invest in the exploration and development of a mine, which takes 10 years on average from the first discovery to the first tonne of metal produced.

"Growing organically is getting harder and harder," says Simon Toyne, mining analyst at Numis Securities. "There is a shortage of skilled workers, some of the equipment required, like trucks, can take up to three years to be delivered, and costs and lead times for everything from dynamite to tyres continue to rise."

BHP Billiton, for example, said that costs of the development of the Ravensthorpe nickel mine in Australia had soared 30% to $1.34bn and added it was further reviewing the budget and schedule of the mine.

Digging deeper

Moreover, exploration itself is getting harder. Access to prospective land is often restricted by environmental and community concerns, and miners are talking about the necessity of digging deeper to get at scarce resources - a process that would cost even more.

More importantly, though, miners have learned their lesson. During the 1980s, the mining industry was hit by a copper price boom that led to companies rushing into opening new mines. This in turn led to excessive amounts of copper on the market, a collapse in prices, and many companies were left with unprofitable projects.

In this context, growing acquisitively is more attractive for the bigger mining groups than investing in mines that could prove costly should prices fall. Junior companies are increasingly relied on for exploration, which the majors or mid-tier miners will take over or form a joint venture with. In 2005, according to accountants PricewaterhouseCoopers, the exploration budgets of junior companies accounted for 63% of total growth in exploration expenditure.

Analysts say consolidation is set to continue, but ultimately the level of mergers and acquisitions depends on the level of commodity prices. These in turn hinge on the global economy and demand. China, which accounts for the bulk of new demand, is growing at a rate of about 10% a year, but it could slow down. There are signs that the US economy is running out of steam.

Jason Burkitt, director of PwC's global mining practice, says that companies looking at potential acquisitions need to form their own long-term view rather than look at current prices. "Hedge funds and commodity traders have entered the fray, and any rise or fall is more pronounced. Also, the commodity prices are in US dollars, and the dollar has moved quite a lot."

Charles Kernot, mining analyst at Seymour Pierce, says exploration started increasing significantly only in 2002, which means that new mines will be coming into production around 2012. When that happens, he says, prices will fall. But others, like Mr Toyne, believe demand, and therefore prices, could remain strong for a while. "China continues to grow. Even if GDP growth slows to 7% or 8% per year, annual incremental commodity demand is still substantial relative to the global market. And by the time it comes to the end of its industrialisation phase, India could take over, with GDP/capita just entering the commodity-intensive zone."

He adds that even if copper prices halve, for example, they will still be higher than they were two years ago.

When prices fall, consolidation in the industry will slow down. Those small companies that started developing projects off the back of high commodity prices will be snapped up by mid-tier groups. As for the bigger companies, a slowdown in the cycle will not necessarily mean that costs will drop accordingly, which would lead to a margin squeeze, and an erosion in confidence to make further acquisitions.

Ultimately, though, analysts agree that investors need not worry about their mining stocks in the short and medium term. As PwC says in its annual mining review: "Let the good times roll."

Explainer: Labour unrest

High commodity prices have led to workers seeking a share of the mining companies' profits. As a result, the sector has recently been plagued by industrial unrest with miners striking for higher wages and bonuses.

Workers at the world's largest copper mine, in Escondida, Chile, which is majority-owned by BHP Billiton, have been on strike for two weeks. They are seeking a pay rise of 10 percentage points above inflation and a £15,355 bonus but BHP's latest improved offer was rejected on Sunday night. BHP closed the mine late last week after miners blocked the road to the site but yesterday the company said the mine, which accounts for 8% of world output, was running at about 50% of capacity. Copper is used in the electricity, electronics and construction sectors.

Inco is having to weather a strike at its Voisey's Bay mine in Labrador, Canada, which accounts for about 4% of global nickel output. Workers there are demanding wage parity with other mine workers at Inco mines. Nickel is used mainly in making stainless steel.

Two of Grupo Mexico's mines, Cananea and La Caridad, have been shut by strikes this year, causing mineral production to shrink 0.6% in the second quarter of the year. The company resorted to firing its workers at La Caridad to end the four-month strike, and has said it is re-hiring employees and repairing the damage.

Kumba Resources, the biggest iron-ore miner in South Africa, saw a strike at some of its subsidiaries end earlier this month after it offered an average 8.5% pay rise, as well as a 10% rise in the housing allowance. Iron ore is used for making steel.

[arja] 08/6/2006 16:05

thanks bionicdog- I have just returned from Kiev and notice the share price still falling ! In theory, I suppose base metals can fall much further yet !!

[bionicdog] 02/6/2006 08:10

Try this arja.

[arja] 01/6/2006 15:09

am thinking of selling my MLw at quite a loss but wonder whether the big discount to NAV has already priced in a doomsday scenario ! Very strange !
Hectorp, can you tell me which site gives up to the minute base metal prices as i rely on teletext and too late to react when i see their figures? thanking you .

[hectorp] 01/6/2006 14:29

not now they are not... zinc as much as 8% down today, copper over 5.5% at the moment. short again, short BLT too.
Hedge against other long longings only.