Bdi Mining Share Discussion Threads

[ged5] 25/1/2006 11:52

  5000 oz 10000 oz 15000 oz   Monthly Sales $550/oz 2750000 5500000 8250000   Monthly Costs $250/oz 1250000 2500000 3750000   Yearly Profits £ 10.1M £20.2M £30.3M   eps based on 100M shares 10.1p 20.2p 30.3p   Price on pe of 7 71 142 212   Price on pe of 10 101 202 303  

[speed camera] 24/1/2006 20:09

Fair point Ged5

[ged5] 24/1/2006 19:03

I expected to see a small drop as soon as fund raising was mentioned by Unionhall.

From the Aim admission document

"The long-term strategy of the Group is to use the future cash-flow from its
diamond operations to finance gold exploration in the Southeast Asia Pacific
region, home to some of the world's largest gold deposits and an area in which
the Company's management team has significant experience."

I think this will eventually happen. At the moment the cash flow from the diamonds is earmarked for Phase 2 at Cempaka. (I can't find that quote at the moment but I saw it earlier in the day on an RNS).

The company seems a victim of it's own success. As unionhall pointed out developments have happened much quicker than anyone could have hoped for. We now have 2 developments coming - Phase 2 and further exploration at Woodlark. I agree now with Unionhall that funding is likely for the exploration but am not certain of how it will come about.

I'm sure we'll hear more about the copper south of Wonai but I also think we'll be getting news from Bobaris shortly. Still working on the figures for the gold production. Does anyone know what BMG are hoping to produce per month/year?

SC Would you think $250/oz production costs would make this an attractive proposition given that there are 665000oz so far?

[badtime] 24/1/2006 18:44

its been up n down like this b4..refer to chart speed

[speed camera] 24/1/2006 17:41

Something's amiss. Maybe the gold they've found isn't an attractive proposition compared with other finds.

[rambutan2] 24/1/2006 17:13

the seller/s present another good buying opp.

noticed that in this week's ic, in tips update, they rate bmg good value on forecast sales of £10.9m and profits of £5.5m for 2006.

[rambutan2] 20/1/2006 15:22

yes, mainly debt but would expect a bit of equ. remember that they've got barclays on board already...
The Company has engaged Barclays Capital as project advisor for Woodlark Mining
and issued to Barclays Capital 2,500,000 warrants to purchase common shares for
a period of five years at 25 pence per common share. 1,250,000 of the warrants
vest immediately, 750,000 vest when the share price reaches 35 pence for a
period of five consecutive trading days and 500,000 warrants vest when the share price reaches 50 pence for a period of five consecutive trading days.


also, with copper where it is, although subsequently put on the backburner, this offers us some hidden value which is worth remembering...

[unionhall] 20/1/2006 13:22

I think some equity-based. I have no idea of the quantum.

[adam] 20/1/2006 13:19

unionhall - with cash flow funding could be debt finance. Do you agree, or do you think will be all equity based?

[unionhall] 20/1/2006 13:11

I understand a contributory factor in the rate of share price increase is a significant churn in the original venture capital companies realising profits by disposing of some of their holdings.
This slows the growth but on the positive side puts the shares in safer long-term hands. I don't know why this has not been reflected in RNS but I guess it will when the process is over.

Funding may be a possibility in Q2.

The Q1 Woodlark resource update this quarter will surely show a significant increase in the proven and indicated level and possibly drive the reserves(including inferred) over the 1m oz level. BDI will then be facing accelerated feasibility and development costs for Woodlark and the Cempaka Phase 2 Development at the same time. A good problem - but if it happened it would probably require some financing.
IMHO, DYOR.

[rambutan2] 19/1/2006 14:43

but they got all that cashflow now. and woodlark not far enough down the line yet.

[dean moriarty] 19/1/2006 14:41

ram that's when they did it last year

[rambutan2] 19/1/2006 12:57

dean moriarty, why do you say funding in march/april?

[dean moriarty] 19/1/2006 12:51

Ged5 Nice round up. with all this good news and no share action I think we are being set up for another round of funding in march/april and the serious mining investors have seen this scenario before and will get in cheap.

[adam] 19/1/2006 09:03

Will de Broe have a good reputation, and they should do a note for clients at least, which might encourage some buying.

[ged5] 19/1/2006 08:47

The market seems to have reacted favourably to the change in advisor. Three announcements so far this week. Do think the company are as frustrated as us with the sp? They know more than any of us the great potential for this company.

I have been trying to work out a realistic target based on RNS announcements and the research note.

I have used the 100000+ carats in the announcement along with the 1.4m carats over a 12 year life for the mine to give an average 116000 carats per year.
I have also used an average of $250 per carat.

116000*250= $29M sales = £16.29M

Since its 80% owned

Sales to BMG 16.29*.8=£13.03M

Costs are given at $650000 per month

Costs = 650000*12 = $7.8 = £4.38M

Profit= 13.03-4.38=£8.65M

Number of shares =86M

eps=8.65M/86=10

Not sure of the tax so I'm using the pretax eps

Given an average PE of 7-10 a reasonable target is 70-100p as we reach full production on Cempaka which should give full year figures in 15-18 months.
Perhaps 49-70 after tax.
This is my view on the diamond production so far. I am presently trying to work out figures for the gold production and have discounted Bobaris completely-at least for this year.

Any comments please?

[rambutan2] 18/1/2006 16:58

as ive said before, it was the gold that mr spencer showed greater excitement about when i spoke to him a few months ago. at that time he was in no doubt that they would soon be able to announce resources above the 1m oz mark. bdi is developing a good track record of delivering what they promise...

BDI Mining Corp Managing Director & CEO Mr Lee K. Spencer said "These results
represent the discovery of a new zone of gold mineralisation beyond the
cross-fault, adding at least 120 metres of strike length to the deposit, which
is the equivalent to a 50% overall increase. Our geological team should also be
congratulated for this success and I am excited by the potential implications
for expanding the size of the Kulumadau deposit".

The interim resource statement of 655,000 oz of gold in JORC-compliant measured, indicated and inferred categories announced in December 2005, included all Kulumadau drill holes up to BKD24. The next resource upgrade will incorporate all drilling completed up to December 2005, and is expected to be completed in the current quarter.

[badtime] 18/1/2006 09:16

And the share price moves zilch :(

[ged5] 18/1/2006 09:14

Well there's the news you said was forthcoming, unionhall. And another great announcement at that.
50% increase in resources. At least the company is doing their bit by giving regular newsflow.

[unionhall] 18/1/2006 08:27

We can look forward to the Resource update later this quarter now.

Looks like a drive to 2m oz by end of 2006 should be within view given that they have more drills starting by end of this month.

[unionhall] 18/1/2006 08:21

New Gold Zone Discovered at Woodlark Island

Highlights:

* Diamond drill hole intersection of 24 metres @ 2.22g/T Au from 119 to
143 metres in a new gold zone

* Strike length of Kulumadau gold mineralisation increased by 50% and
still open to the north

* Assays from further diamond and RC drilling expected shortly.


LONDON - 18 January 2006 - BDI Mining Corp. (AIM-BMG) announces the discovery of
a new zone of gold mineralisation at the 100%-owned Woodlark Island Gold Project
in Papua New Guinea, where the Company is targeting bulk-mineable gold
mineralisation.

Gold mineralisation at the Kulumadau deposit was previously thought to be
terminated in the north by a north-west trending cross-fault. Two widely spaced
diamond drill holes, BKD30 and BKD31, were drilled to test the theory that
mineralisation continued to the north of this cross-fault, along the periphery
of a large induced polarisation resistivity anomaly. This anomaly is interpreted
to represent an extensive, hydrothermally-altered, intrusive breccia or
diatreme. Drilling in 2006 will be aimed at confirming mineralisation is
radially distributed on the flanks of this breccia body.

Diamond drill hole BKD 30, located 50 metres north of the cross-fault
intersected 24 metres @ 2.22 g/t Au from 119 to 143 metres downhole, including 1
metre @ 10.12g/t Au from 127 metres, and 1 metre @ 11.50g/t Au from 142 metres
downhole. Hole BKD 31, located 70 metres north of BKD 30, intersected 19 metres
@ 0.84g/t Au from 120 to 139 metres downhole.

Elevated base metals in hydrothermal breccias were noted in both drill holes,
including 1 metre of 1.26% Pb and 2.6% Zn, between 129 and 130 metres downhole,
in BKD 31. This new zone of mineralisation is similar to the base
metal-carbonate system at Kulumadau, and now remains open further to the north.

BDI Mining Corp Managing Director & CEO Mr Lee K. Spencer said "These results
represent the discovery of a new zone of gold mineralisation beyond the
cross-fault, adding at least 120 metres of strike length to the deposit, which
is the equivalent to a 50% overall increase. Our geological team should also be
congratulated for this success and I am excited by the potential implications
for expanding the size of the Kulumadau deposit".

The interim resource statement of 655,000 oz of gold in JORC-compliant measured,
indicated and inferred categories announced in December 2005, included all
Kulumadau drill holes up to BKD24. The next resource upgrade will incorporate
all drilling completed up to December 2005, and is expected to be completed in
the current quarter.

[unionhall] 17/1/2006 16:22

I understand there is more gold news due this week or next as well as the diamond sale. Management are very bullish on Woodlark for what its worth so perhaps there is good news on the horizon.

[ged5] 17/1/2006 15:56

Using the lowest average per carat so far this tender is worth about $1.445M. If this is correct then total proceeds since the first commercial shipment which gives just over $7M sales in 23 weeks. This equates to approximately £8.9M over a year or one third of the Market Cap. However this will increase as Adam pointed out and will give future sales of about £15M.

Only $5.9M will be in the full year results to December. Maybe the market is waiting for a full year of commercial shipments and the development of Woodlark before it decides to rerate BMG.

[adam] 17/1/2006 05:25

Shipment Sale Interval Ship Interval Sales #Stones Cts Avg Cts/Stone Avg Price Cts (small) Price Calculated Actual Cts/Month
10/08/2005 05/09/2005 6524 $385 $2,509,127 $2,506,674
18/10/2005 31/10/2005 69 56 16,787 5730 0.34 $280 678 $88 $1,663,966 $1,672,468 2788
01/12/2005 19/12/2005 44 49 13,256 4529 0.34 $308 $1,394,849 $1,396,525 2962
16/01/2006 23/01/2006 46 35 13,583 4335 0.32 2640 3256

That doesn't format very well, but essentially using shipment/tender dates to estimate intervales i guesstimate that (excluding small diamonds) ROM has been 2788, 2962, 3256. There was an additional sale of approx 3000 cts of small diamonds in the period making the total in-line with the 4000 Cts/month expected - they added a 3rd pan remember. The stage 2 construction does not begin till Q2 2006. Currently producing $11m per annum or about $4m net. So price not moving as there will a predictable news flow until ramp up of production to 140k Cts/year at stage 2.
m/cap $50m. So looks cheap, but many mining stocks on the market.

[rambutan2] 17/1/2006 02:39

is odd how this refuses to shift up much. can anyone come up with any reason to be sceptical of its prospects? ie share overhang, wrong type of diamonds, dodgy management, land rights issues, confusion between bdi and bmg etc.