Asiamet Resources Share Discussion Threads

[ronconomics] 20/11/2017 08:01

@okidoki hope you are sleeping more soundly. I didn't say 20 stocks...you could have 19 units in cash. 3 or 4 great ideas at once might be my limit with no pressure to be fully invested with second best ideas. I like the idea of building a buffer for margin calls or unexpected slippage out of house money. Bottom line is have a multi bag winner with your first position realised and it gets easier lol. I've gone for funds in the sipp rather than specific stocks as my picker wasnt too good last year. A slower and steadier account is my rational.

I'm using sector momentum to rejig holdings actively picking the best fund on 4 and 26 weeks performance in each. I have a discipline around when to switch and don't worry about costs. It's working well . I derisk when market conditions indicate through tweaking allocations. You can read more at salty dog.

Regards to all here and wishes for ars going off to the races again today.

[dorset64] 19/11/2017 22:47

Some great informative posts guys and some brilliant replies too. HG thanks for posting your own research of which I've saved along with others and my own to keep increasing my understanding of the overall project.

It's actually a please to be on a board where, for example HB says his personal opinion of HZM and without shouting him down, there was reasoned responses that may change his mind a tad. Refreshing to see for a change.

Good to be in a great share, at the right time and a board that is great to read. Keep it up guys.

[highly geared] 19/11/2017 22:08

Thanks for the good words guys. The only negatives as I see them are:
- general market tanks and takes commmodities and every thing with it. This is a real risk and we should all watch it. But , central banks have telegraphed their intentions so we may see a slow drawn correction in 2018.
- political; never discount this but granting of the Beutong production licrnce should put this to bed.
What I like here is the sheer scale of the assets . With the huge resources we have defined, it is likely we have barely scratched the surface of what’s there( as demonstrated by BKZ) + the huge discount to NPV across all assets.
The other thing is the BOD. They’ve built major ompanies before in this sector, they’ve raised at the right time, got JP Morgan in as a key investor at a very early stage and have aligned theirs and our interests; I trust them to act in shareholders best interests.

[barneycosmo] 19/11/2017 21:53

Highly Geared. Many thanks for the analysis. Someone would only sell if they need the cash or have a better investment. Personally I'm struggling to find one.

[buildit1] 18/11/2017 23:41

Highly geared. Great write up and bang on the breakdown I have right now. Onwards and upwards.

[maverick247] 18/11/2017 23:15

No probs HB good bunch of investors here and always useful to get some similar investment ideas.Think we all have amazing opportunities with juniors with quality assets like ARS ready for the commodities upturn

[highly geared] 18/11/2017 22:53

Just been having a look at the Beutong numbers in a bit more detail:

Measured and indicated at 0.3% cut off:
- 1241 millions lbs copper at say $3.50 = $ 4.343 billion
- 373,000 oz gold at $1250 = $466 million
- 5.698million oz silver at $18 = $102 million
- 20 million lbs Moly at $7 = $150 milllion

Total in the ground gross value = $ 5.054 billion

Including inferred resource, it gets very interesting ( albeit lots more drilling needed to the East and West Porphyry’s:

- 4091 million lbs copper = $14.318billion
- 1,746,000 oz gold = $2.183 billion
- 14.9 million oz silver = $268 million
- 113 million lbs Moly = $791 million

Total gross in the ground value = $ 17.56 billion

Grand total north of $22 billion.
Based on CPR and 30,000 metres of drilling to date

Ars currently have 40% and can convert to 80% subject to certain project development commitments (I’m assuming they’ll take it to 80%).

Taking a middle position on conversion of inferred , that gives an in the ground value of c $14 billion. But, based on long term copper projections and assuming earliest production is c. 2022 , copper is likely to be higher, ditto gold/silver.

Capex will be considerable but working right back to PEA , assuming they do further drilling to move some inferred up to indicated, when comparing a likely doubling/ tripling of the copper inventory ( when compared to BKM) and including the precious metals and Moly, it,s hard to envisage a PEA NPV lower than $1 billlion based on an 80% interest.

Assuming the production licence lands in the next 2 weeks , they should be able to generate a PEA by summer 2018 and a BFS by 2020. Assuming the market ascribes say 25% of the NPV , this should add say $250 million to the share price over the next 9 months. That will be c 26p/ share.Add BKM post BFS finance, say 30p and 5-10p spec value for BKS, BKW, BKS, then it’s possible to see a path to a share price of c. 65p by summer 2018.

If copper continues to rise then all bets are off ( on the upside).
All IMO, DYOR.

[horneblower] 18/11/2017 22:12

okidokicoki, uapatel, maverick247,

Thanks for your considerate replies to my observations re HZM.
I have investigated a little further and find that all of your points are entirely valid and the project does indeed look very exciting. I currently continue to favour Cu and Zn over Ni but that is purely due to the respective commodity price charts.

I also still have a slight concern over the logistics of the operation which the HZM website doesn't go into in much detail. Being 200 km from the coast must provide certain challenges but nothing is mentioned.

Similarly, ARS does not yet mention the specifics of their logistical challenges and I know there are many mountains yet to climb regarding local licencing, environmental control, port logistics etc.

It's all very exciting and wife and children are hoping not to become widow and orphans.

Shall I switch some of my ARS into HZM?

Hmm.

I do not profess to be any kind of equity analyst but I have been studying charts for forty years.
Nothing is certain but, for me, if I had to bet on the next couple of months, the ARS chart suggests it will go to 20p and the HZM chart suggests it could hit 8p but I will be able to buy below 4p first.

GL to all ARS and HZM holders.

[maverick247] 18/11/2017 17:12

HB re HZM the nickel project is Tier1 and the project is in an already active mining region with existing infrastructure and hydro powerCheck out the fact sheethttp://horizonteminerals.com/news/20171118_fact_sheet.pdf

[mr roper] 18/11/2017 13:05

10% improvement in the met recovery adds 50% to the bkm Npv!

[2lb] 18/11/2017 11:54

I think the opposite more likely - they have let them run and run and brought world class consultants and labs to assess them , I think they will be well above PEA estimates and add tens of millions to BKM NAV alone

[the manini] 18/11/2017 11:27

Cyberbub the short columns had reached the PEA estimate some considerable time ago so no. At worst they'll prove the PEA base case anything more is a bonus and adds further value to the company

[mr roper] 18/11/2017 10:38

No. Judging by the midpoint results I'd expect recovery to be in line with company guidance.

[cyberbub] 18/11/2017 10:03

Does anyone with detailed knowledge of these things have any concern over the possibility that the soon to be announced metallurgical results might not be as good as hoped?

[snickerdog] 18/11/2017 08:37

Horneblower, HZM definitely worth another look. A high quality project with great economics which I think is going to either be developed or taken out. They bought Glencore's project in Glencore's fire sale. I think that there are large nickel projects operating nearby Vale may have one?I have a few HZM will probably average up over time but I see a mirror of Asiamet in many respects (just no-where near as exciting and with no Tony Manini!)

[uapatel] 18/11/2017 05:12

Hornblower,

Appreciate you’re not a fan of HZM.
See attached Company fact sheet if you feel you want a clearer picture about them.

[okidokicoki] 17/11/2017 23:59

hornblower im pretty sure they have bought the Glencore Araguaia Project. 80% of a lithium battery is Nickel. Everybody fighting over lithium and nobody really thinking about Nickel

[highly geared] 17/11/2017 23:26

BKM
Re- reading the updated resource statement back in the summer for BKM; c 1 billion lb’s of copper in total using the 0.2% cut off grade. The PEA NPV figure was $ 204 million but will likely have improved based on the upgrade of measured and indicated resource and work on the BFS.

Say $250 million for arguments sake.

BEUTONG ( copper)
Reading the company website and previous announcements, there’s c. 5 billion lb’s of copper.
Any PEA NPV needs to consider economies of scale and the benchmark copper price which, based on long term projections could be set at $4/lb.

Conservatively , I’d envisage an NPV of $1.5 billion

BEUTONG ( gold and silver)

There’s over 2 million oz of gold + silver

NPV for this; envisage c $200 million

KSK area

How long’s a piece of string but based on recent drilling and historical information, it seems there will be at least another BKM equivalent

Theoretical value now ; say $50 million but likely to grow 5-10 x this

SUMMARY

Approximately $2 billion now for what we have but could easily be a multiple of this with 3-5 years development from here.

If ARS secure Beutong works production licence and can get that to PEA by summer 2018 in parallel with BKM finance, you can see the size of the value unlock coming down the track in the next 9 months.

All subject to the markets not tanking and sensible project level share dilution for development of the assets.

An outright sale may be favoured by mid 2018, but you can see a go it alone approach on BKM with a JV of Beutong with a major to retain a substantial stake might be equally attractive.

[horneblower] 17/11/2017 23:21

I'm not a fan of HZM although no doubt I shall be proved wrong.
My reasons are:
1. It majors on Nickel, which is ok but copper and zinc are better imo.
2. It is 200 kms inland from the north coast of Brazil and therefore isolated logistically.
3. It is somewhat dependent on the development of GAP (the next door Glencore Araguaia Project). This could be an advantage but it is not really a good situation imo.
There may be other factors that have eluded me and I would be interested to hear anybody's views.

[okidokicoki] 17/11/2017 22:51

roncomics i remember been in Poland in may 2016 and the price dipped below 1.8p i think at that point i had about 20k and that was my pension for the rest of my life but i really believed because i had researched and researched and researched that it would come good and gladly it did. But i have to say that its a lot harder to hold onto a winner than it is a loser. I think a spread of 20 different shares as you are saying is alot , you have to think every time you buy or sell you are giving a little of you money to the Money men . Of course GL with all your holdings and DYOR always

[okidokicoki] 17/11/2017 22:24

8 million 2LB thats some serious balls mate. respect is all i can say . You must have other investments too. or i dont think your balls would fit through a normal doorway lol

[ronconomics] 17/11/2017 22:18

@ok I found that interesting. The issue is on my mind albeit a smaller scale. One approach is to divide your risk capital into 20 or more risk units and be strict on life with your max loss exposure. Clearly £100k is a lot for anyone to have on the line. I do wonder how you hold on to 100% invested as the price grows and meaningful sums appear. Anything can happen to the market generally or Indonesia or the specific stock and to see such sums melt away in a few hours would be pretty hard to swallow..even if you didn't have the money a month ago. Then I do the math at 15p 25p 50p and my exposure to retracements.

I had a taster yesterday when a 10pc drop intraday halved my profit. I'm going to work through some examples so I can feel what I need to do at various stages if and when the time comes .

I also like HZM by the way having researched it today but think we have a bit more time before switching across similarly. I'd like to have about half a dozen ideas and position size evenly.

I'm negative on certain global governments bonds, defence stocks given the outlook for middle eastern affordability and the US budget (the main customers ), Venezuelan oil and economy, and dare I say Tesla. I like Metal (the cryptocurrency company ) because of the disruptive business model rather than the coin..you have up be selective.

[highly geared] 17/11/2017 22:03

Oki , nothing wrong with taking a profit and diversifying risk. With a million still in , come back in 2020 and you’ll be pleasantly surprised!

[2lb] 17/11/2017 22:02

Fair play oki Still got over eight million and sleeping like a baby