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Real-Time news about Tanzanite (London Stock Exchange): 0 recent articles
|pdt: After watching for a while I made my first purchase this morning.
They seem to be on target for around 3p EPS which with a modest PE should see them easily regain the 16p share price they hit earlier in the year.
However, tiny market cap mining shares have a high chance of going off course and under deliverying.
However, they seem to be doing all the right things and making all the right noises. My personal target is 18p over the next 12 months and the risk/reward seems reasonable.|
|zaksab: On the perhaps tenuous assumption that the asset they are buying today is, in the fullness time, to prove to be worth a certain amount which turns out more than they initially expected to pay when enetering into the option, then the fact that value of the consideration (i.e the share price given the consideration is to be mainly given in a fixed no. of shares) has fallen means that the deal may create more absolute equity value than they initially thought. More equity value to accrete onto a lower market cap means much greater % equity upside assuming issuance at today's share price.|
|steve36: Giant steps - interested in your comment about an open ended purchase price. Are you worried that the share price might take off so that the cost will be much greater. If so, I don't share your concern, wouldn't it be great news if that happened? Isn't it really just an accounting issue, as to how much asset value is taken onto the balance sheet? For us shareholders, we know the dilution will be 18m shares = 13.5% of the value of our holdings. Personally, I'd be more concerned that if the price had been fixed in dollars but payable in shares, that the share price might fall and we'd be faced with greater dilution.
If the share price does take off, ultimately they could always not take up the option, wasting just A$120k or renegotiate it. The way I'd look at is that effectively the vendors are holders of 18m shares now but that the company can get out of it if it doesn't look such a good deal after due diligence.|
|giant steps: Seems to be onwards and upwards, share price is doing the talking
[ note strengthening of diamond prices confirmed by FDI news today ]|
TanzaniteOne: maiden JORC-compliant resource for Tsavorite project
Tuesday , 11 Jan 2011
TanzaniteOne has announced a maiden JORC resources statement for its Tsavorite Project (green gemstones), located 20km from its Tanzanite mine in NE Tanzania.
JORC-compliant Inferred Resource of 7.6-10.4 million bank cubic metres (Mbcm), or approximately 18.2-24.9Mt
JORC-compliant Indicated Resource of 0.89-2.17Mbcm, or approximately 2.1-5.2Mt located within Inferred Resource
Average Tsavorite grade of 1.6 carats per loose cubic meter for the Indicated Resource
Estimated 1.4 and 3.5 million carats of Tsavorite located within the Indicated Resource only
Further resource statement expected in 2Q11, following a second phase of bulk sampling
The result of an exploration programme started in 3Q09, this resource is commercially significant. Compared with the Tanzanite grade (50+cts/t) and production (1Mcts pa) it may appear modest, but the gemstones will be easily mined and recovered from unconsolidated gravels and the company should therefore achieve a good return. Also, being so close to the existing Merelani mine, it will be able to draw upon people, equipment and infrastructure readily available to it at marginal cost.
However, it is also difficult to determine what the announcement means economically as there are no costs given at this stage and it depends on the quality of the stones; and, therefore, their value. Typically, gemstones found in gravels and other secondary deposits are more consistent in size and quality than for primary deposits, but the concentration (grade) also tends to be lower; both of these characteristics are due to the winnowing effect of erosion and re-deposition. Garnet in general is semi-precious and not particularly valuable, but Tsavorite's rarity and vivid, intense grass green colour outperforms all but the best emeralds, the more commonly thought of green gemstone, and are highly prized.
Though the price of Tsavorites is typically a quarter that of emeralds (which themselves are often able to fetch prices higher than equivalent sized good quality diamonds), but 2-4x higher than Tanzanite (last year's fourth 'sight' achieved an average of US$10.6/ct), and the larger sizes especially so because of their rarity; prices typically range from a few dollars per carat (US$12-15/gram) for the smallest stones to US$80/ct rough for larger pieces.
Additional production means additional revenue. Putting an in-situ value of US$5/ct for the 1.4-3.5Mcts in the Indicated Resource gives a top end equivalent to £11m, two-thirds of the current market cap of the company (£17.6m). We therefore continue to see upside to the share price as the performance of the company's Tanzanite mine continues to increase production and improve profitability and the news (at the end of November) that Mike Nunn, the former CEO, has reduced his shareholding to less than 1% of the company, removing an overhang of more than 10% of the issued share capital. Plans to implement a commercial cutting centre in Tanzania are also well advanced.
We see this news as another positive development and will add an element of diversification to its present single product. Tanzanite is expected to benefit from the general uplift in global luxury goods demand which will spill over into the precious stones market. We have already seen a marked recovery in diamond prices and this can be expected to filter into other categories of precious stones.
TanzaniteOne's price, in our view, still represents an excellent opportunity and we continue to stand by our 34p price target, which we feel adequately factors in the perceived inherent Tanzanian risk around the New Mining Charter that came into force last year.
We expect an operational and marketing update in early February.|
|ch1ck: As a long term trader of these I have started re-buying. After the final fall in share price and the news of problems of exporting un-cut gems looking better I have bought quite a few and doubled my holding today but it was difficult to pick up large quanties of stock in one go but am happy with the price paid.
A new revenue stream should propell the stock to previously unthought of levels.|
|n0rbie: Cheers for the link share_shark. Came across a forum with people wanting to buy genuine Tanzanite from a reputable seller whilst searching the web so I'll link them to that site.
Not sure of your "vintage" tanzanite pendant there ;)
Don't worry about the postings here - it's normally dead anyway so good to keep it active.
Still can't get my head around the 11 cents (7p) per share dividend they had in 2007 and 2008? The share price then was 30p so it was still a massive 40% return!|
|n0rbie: Bit of reminder here about a potentially massive resource we could turn into production relatively quickly and a little about dividends...
* Objective to develop world's largest single source of tsavorite into production
o Tsavorite a brilliant green gemstone
o Project located 20 km from TanzaniteOne mine and operations office
* Bulk sampling will enable Indicated resource
o Independent resource estimation of 18.24 to 24.96 million tonnes of potentially open pit mineable tsavorite-bearing gravels
* Transfer highly efficient tanzanite extraction model to Tsavorite project
Project acquired in 2007 for 7,450,000 fully paid TanzaniteOne common shares at 16p each and US$350,000 cash - total cost was approx £1.6m.
Estimated initial Capex of US$8m.
Current Inferred Resource of around 20 Mt.
Lower mining and processing costs compared to tanzanite (open cast mining).
"The Company remains confident that it will have a JORC compliant resource by H2 2010."
In Ambrian's December 2009 broker note they gave the following NAV for the company:
Tanzanite mine US$50m / 29p per share
Nominal value for future Tsavorite Project US$12.4m / 7p per share
Cash US$5m / 3p per share
Total NAV US$67m / 39p per share
You can buy shares in this company today with it valued at only £10.5m!
I would expect this NAV to increase significantly if the JORC results come back positively.
"We feel that the positive news contained in the company's Operating Update has been ignored by the market.
TanzaniteOne has a market cap that is the same size as that of most low end exploration companies on AIM. The fact is that this is a company that has a producing mine that washes its face on an operating profit basis appears to have been overlooked. Also, we note that the cash from the May 2009 equity raise will be spent on exploration of the tsavorite project, potentially adding value by leading to a resource estimate."
Also bear in mind that the share price was 13p when this broker note was published and that they have previously paid a generous regular dividend. For example the previous dividend per share in 2008 was 11 cents, which for a purchase of 10,000 shares at 9.5p would cost you £950 and if it was returned would pay you $1,100 / £703!!!
Looking forward to the Tsavorite JORC Report!|
|thinking: Looking at how the share price declined due to the new rules, once an agreement is reached I would expect this share to motor back to around the 12p mark, could go higher if the outcome is more favourable, as the comapany has stated they have a good working relationship with the authorities.|
|thinking: Great results, but would like to have had an update on the Goverments requirement to have stones cut on site as this is what sent the share price down from the 12p level!|
Tanzanite share price data is direct from the London Stock Exchange