Asa Resource Share Discussion Threads

[mreasygoing] 17/8/2016 14:55

Lot of liquidity now. Nice.

[brahmsnliszt] 17/8/2016 13:13

Hi LMAre you invested here too?All looks rather primed for an attack on 1p don't u think?For me the big thing was volume recently. That's what got me buying initially, and added on way up.

[mreasygoing] 17/8/2016 13:12

Nice. I may get some money back from our African friends... and some.

[the stigologist] 17/8/2016 12:44

Could get interesting if people do indeed realise the latent potential

Stockonomist - 28 May 2014 - 20:52:05 - 4072 of 7686

The 'basic' cost for a nickel 'smelter' is over $1bn. For a Smelter/Refinery complex from scratch you are probably looking at c.$2bn depending on the size. That is why Mwana's BNC is so valuable the Replacement Value of the asset is at least $1bn.

[skidaddle] 17/8/2016 12:16

Could be breakout time.

[hazl] 16/8/2016 07:06

Some very informative posts lately...it is to be welcomed.
It is what the bbs should be.... at their best.

IMO

[redtrend] 16/8/2016 05:44

WStirrup - based on above I don't think bidding war is likely and not sure ASA management and main shareholders would entertain it. However if 15% levy is implemented on PGMs by the Government in 2017, I think Bindura could find their statement in their Annual report that there is not enough PGM concentrate volumes to modify the smelter could change, if Amplats are forced politically and commercially by the levy to come to the table.

When you have a working smelter that can be modified for PGMs, this is where pushing for local content does make sense and the Zimbabwe Government are not being unreasonable putting in place levies for export, when there is infrastructure in-country to treat platinum concentrates.

[redtrend] 16/8/2016 05:29

Looked into it a bit more yesterday, by looking at Zimplats and Amplats Annual Reports.

Zimplats have a working smelter, but due to their size and requirement for full utilisation, it is highly unlikely they would agree a toll charge agreement with their competitors or that their competitors would want to.

Amplats - still no smelter and stalled at the early stages of trying to get their Environmental Impact Assessment (EIA) approved, with environmental affairs minister not considering it until upfront payment to the government of 10% of the total project value. Legal protection and security of tenure on assets in Zimbabwe shown as risk in report, so looks like it has stalled. Even if they get approval, with long lead items, tendering, awarding contracts, civils/ construction work, commissioning etc etc., you're probably looking at 3+ yrs to a smelter being online. What will they do in the interim?!

Mimosa and Aquarius/ Implats JV at Mimosa mines (Acquarius acquired by Sibanye Gold) - no smelter

Also remember the 15% export levy on unbeneficiated platinum concentrates in Zimbabwe, which was supposed to become effective from 1 January 2015 was delayed by 2 years after lobbying by the PGM miners. The clock is ticking for them and in early 2017, ASA will have a working smelter which can't be utilised due to volumes, just when the 2yr stay of execution ends! If you were the Zimbabwe Government would you wait 3-4yrs for another smelter to be built, or would you force companies to seek a compromise and increase tax revenues? It would benefit ASA, the PGM miners and the Government.

Notwithstanding we've been here before and Bindura Annual report states there's not enough volume (probably no interest from Amplats at that stage), a lot of PGM miners will be knocking on their door once the smelter is complete, if the 15% levy comes into effect. With Amplats, there would be more than enough concentrate to feed the smelter. This would tide both companies over next 3-6yrs until/ if Amplats build their own smelter and for Nickel prices to recover so ASA's Shangani Nickel mine can be utilised (lower grades than Bindura so needs far higher nickel price) and third party concentrates won't be required. There are also nickel mines in Zambia just north of border that may be interested in utilising the smelter.

Politically if ASA communicated to the Government their desire to restart their smelter, but require PGM concentrates to make up volumes and you have the PGMs continuing to lobby for the levy to be delayed when they have already had 2yrs, with a working smelter I would be surprised if the Government don't side with ASA. It would even make sense for the PGM miners to split the small cost to them to modify the smelter and pay toll charge thereafter to ASA, rather than pay a 15% levy.

[juju44] 15/8/2016 22:59

Would cost several hundred million to build from scratch - but this speculation has been here before and came to nothing .

[wstirrup] 15/8/2016 19:37

Cheers guys,

To be honest, I was expecting a little vitriol, so the comments have been somewhat surprising, and informative.

Interesting that the refinery/smelter could be the trojan horse for a major (If I interpret the comment correctly?)

BNC? How much would it fetch in the open market, especially if several majors started a bidding war?

W.

[redtrend] 15/8/2016 11:16

They've already invested in the Bindura smelter - if they had commercial agreements with PGM miners to smelt, would provide the confidence to modify it. Rather than PGM miners building new smelters at huge cost.

In any case Mugabe is on his way out, he's lost backing of war veterans and people on streets protesting for change. It's more and more unlikely Grace Mugabe's faction would take over from Mugabe and follow the disastrous policies that have sapped all foreign investment.

[jacks13] 15/8/2016 10:22

'Maybe they need to revisit this?' But Mugabe's Marxist policies will discourage investment.

[redtrend] 15/8/2016 10:21

Take anything banks say with pinch of salt, but short Bloomberg article on UBS being bullish on Nickel.

[skidaddle] 15/8/2016 09:14

"will not allow the export of raw minerals without ministerial approval, according to a draft mining bill published on Friday."

"Anglo American Platinum, Impala Platinum and Aquarius Platinum are some of the foreign mining firms operating in Zimbabwe but they are not listed on the local stock exchange."

That will mean that they need a local smelter. Now where did I see one of those?

[wstirrup] 15/8/2016 00:24

Good Evening (or whatever time of day it is where you are...)

Just read something, that almost made me spit my cup of tea in surprise...

"Just weeks ago, I was in Zimbabwe meeting with Gideon Gono – the world’s most radical central banker – discussing a 100% gold-backed banking regime that could transform his country into a global financial center."

Now, who do you think said that?

None other than Doug Casey - Veteran resource investor, and founder of
CaseyResearch.com

If true, (and I have no contacts to suggest one-way or the other) then we have to ask ourselves 2 questions...

1, "Where will Mugabe get the Gold to back the Zim Dollar(if we assume it is)?"

and

2, "What will he use to pay for it... if anything?"

Could be the making of the gold miners, but it could also mean the end of independent mining in the country... Notes on a postcard please?

However, I also saw this, so it's not all one-way traffic..

(NOT!)

BUT... this is probably how he will do it... NATIONALISE IT...



W.

[gwr7] 11/8/2016 15:34

Nice to see the veterans still buying. It's a way of life.

[petefurlepa] 11/8/2016 12:43

hxxp://www.philstar.com/business/2016/08/11/1612432/denr-suspends-operations-2-eastern-samar-mines

[juju44] 11/8/2016 12:33

Yes I got them

[asmodeus] 11/8/2016 12:04

How strange. I have just bought 120,000 to add to my long-standing loss!

[juju44] 11/8/2016 12:01

I cant buy any at the mo.