Bdi Mining Share Discussion Threads

[unionhall] 03/4/2006 17:06

Woodlark Island Location Woodlark Island is located in the Solomon Sea, within Milne Bay Province, Papua New Guinea. The island is approximately 60km long and 25km wide, and largely vegetated by tropical lowland forests. The island is not supported by any regular shipping, but does have an all weather airstrip for light aircraft. The closest regular airport is Alotou, on the southern tip of PNG, some 300 km distant. There is no established infrastructure and all supplies must be brought in, except for water, which is plentiful.

[Abuse team] 03/4/2006 16:58

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[rambutan2] 03/4/2006 16:56

thanks dooby.

yes, local infrastructure - v good point.

[Abuse team] 03/4/2006 16:52

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[doobydave] 03/4/2006 16:52

Hi Rambutan,

Maybe a bit. Generally, getting finance on board runs parallel to the BFS anyway so I wouldn't place a lot of hope on it moving significantly faster. They may take a bit less convincing I suppose. Just IMO.

One thing I'm not clear about is local infrastructure - roads, water, electricity - need to look this up.

[rambutan2] 03/4/2006 15:23

does fact that they've had barclays onboard woodlark for well over a year mean that things might move a little quicker?

[wdurham] 03/4/2006 14:46

Tend to agree, Dave - I would estimate another 2 years for completion of a BFS, financing and construction. Thing is, you don't need to have proved up 1.5 million ounces to START mining. Once you have enough mineable gold established to obtain the finance required, and to supply the mine for a reasonable length of time, the remainder of the mineralisation can be "found" or proved up from inferred as you go along.

Avocet is a good example - Penjom had a 5-year minelife when they started - with about 600,000 ounces of mineable reserve, IIRR. But each year, they have found or proved enough resource/reserve to replace the mined mineral and still add to the resource base. As of March 2005 there were nearly a million ounces at M&I or Inferred status at Penjom, enough to keep them going for at least another 6-7 years at the current mining rate.

[ged5] 03/4/2006 14:08

I think 1.5m oz is the figure they are looking for. Hopefully that will occur sometime soon.

[doobydave] 03/4/2006 12:43

eric,
Yes, plenty more hoops. Feasibility and financing are the big ones and they take a while. Production Q4 2007 at the absolute earliest IMO.

However, 1m oz pretty much assured once infill drilling is complete and probably a lot more to come. They appear to have the geological structure cracked. Excellent grades at open pittable depth, deposit appears nicely open to the south.

Significantly, there is no mention of drilling further south and infill is top priority. I suspect BDI have a criterion of 1m oz M&I to justify going ahead with the BFS and that the agenda is to get to production themselves ASAP.

Just my semi-educated guesses.
DD

[ericeb206] 03/4/2006 09:23

The drilling report is very technical but can someone say when the company is likely to start producing gold? Is it soon or are there alot of hoops still to go through?

[milner2] 03/4/2006 09:16

Update is good, but i would also be interested in when the next diamond sale is scheduled.
BDI must have gathered a nice parcel by now and judging by the last couple of sales putting these at market should help boost the company coffers......

[badtime] 03/4/2006 09:14

downwards n sideways ..........for the drill :)

[ged5] 03/4/2006 09:12

Aren't these are the best results so far. They seem very high grades of gold.

[staymour] 03/4/2006 09:10

good drilling update.... onwards and upwards :-)

[badtime] 31/3/2006 20:00

off a 1p...groan

[schober] 29/3/2006 09:05

re rab - could it be that the bdi holding is spread over several funds and none is large enough to need a rns?

[milner2] 28/3/2006 10:51

Holding(s) in Company

RNS Number:5021A
BDI Mining Corp
28 March 2006



BDI Mining Corp.
3rd Floor,
20 Eastcheap,
London, EC3M 1EB
England
T: [phone]
F: [phone]




SIGNIFICANT SHAREHOLDING



LONDON - 28 March 2006 - BDI Mining Corp. ("the Company") was notified on the
27th March 2006 that Al Salam Opportunities Limited have acquired 5,400,000
common shares in the Company, and as a result, now hold 5.53% of the Company's
issued share capital.

[bitterlemontart] 28/3/2006 07:44

Feature Story Date: March 28, 2006

BDI Mining Runs Into Problems As A Result Of Selling By Hedge Funds

Certain events get the nose of a journalist twitching in all directions. It happens at the most unexpected times, but it would be hard to ignore the fact that AIM listed BDI Mining, which switched its advisers from brokers Hichens Harrison and nomad Ruegg on January 19th to the rather larger firm of Williams de Broe, changed back again almost exactly two months later. No reason was given for the original change of advisers, but chairman Paul Loudon was quite wordy about the progress his company had made since listing on AIM in September 2004.

"BDI Mining has successfully made the transition from explorer to producer with the commissioning of the Cempaka alluvial diamond mine in Indonesia. We have also increased gold resources on the wholly-owned Woodlark Island gold project in Papua New Guinea by 75 per cent with additional gold resources to be included in the next resource statement before the end of March, and further step-out and exploration drilling planned for 2006 as the company moves towards its stated target of more than one million ounces mineable. These two projects provide BDI Mining with a significant resource base from which to achieve management's growth ambitions for the company."

Paul Loudon was clearly delighted to have got Williams de Broe on board and the expectation was that the company would raise some money for BDI Mining from new investors to accelerate its progress. It is at this stage that things get a bit fuzzy as no one seemed to want to say much about events after that. A look at the share price chart , however, gives a clue. The price was coasting along at around 35p when W de B took over, but soon after that it drifted steadily downwards to the current price of 27.5 p. Some might say that a fall of 21.4 per cent is not a lot, but it can cause a fair amount of chaos if broker and client company are trying to agree a price for a placing at the time.

The first question that has to be asked is why the share price fell so consistently as the company itself appears to be doing well. Inevitably the name of RAB Capital comes up as one of several hedge funds which had built up a 25 per cent stake in BDI Mining acquired at the very low price of 8p. The sole object of a hedge fund is to make money so it buys shares as cheaply as possible, preferably when management is a bit desperate at the pre-IPO stage. Nothing wrong with that. The problem is that their time frame is skewed against that of investors who became involved with the company through a placement at 30 p per share in April 2005. This is a good price for anyone in at 8p, so there is the constant problem of an overhang.

Another example was Stratex International which listed on AIM at the end of 2005 with a placement at 5p per share. RAB Capital was said to have a holding amounting to 44 per cent of the equity which had been acquired through a pre- IPO at 1.8 p per share. The hedge fund manager could take a nice profit in the 5p to 6p range and that is where the shares sat for the next three months. Bad luck on IPO investors as it is an interesting company with a strategic alliance in Turkey with Teck Cominco, but at least brokers were alerted to the problem and now scan lists of juniors very carefully for hedge fund shareholdings before committing to a funding.

Back to BDI Mining which has clearly been bruised by the experience of changing advisers. Agreement could not be reached with Williams de Broe on a price at which a placement could be made as selling meant that it slipped a fraction on an almost daily basis. The company therefore returned to the old team of Hichens and Ruegg and raised a fraction under £5 million virtually straightaway from supportive shareholders through shares at 28p plus some convertible loan notes. Four drills can now be kept moving on Woodlark Island where the company hopes for a resource of 1 million ozs by the end of the year. It was a salutary lesson for all concerned and Paul Loudon resigned as chairman, after ensuring that he left the company in good financial order.

The reason given is that he might have a conflict of interest between BDI's diamond interests and a diamond company called Diamondcorp with which he is involved in South Africa, and which will list on AIM later this year. The possibility remains, however, that he shouldered responsibility for the decision to change brokers which must have wasted time and money. At this stage it is as well to reflect on the power of these hedge funds which is growing all the time. RAB Capital is an appropriate example due to its activity in London's junior mining sector. At the end of 2005 it had £1.5 billion under management and that has grown since December to £1.8 billion which compares with the total market capitalisation for the sector of £12.6 billion. This last figure reduces sharply to £8.5 million if just four companies, Bema Gold, First Quantum, Peter Hambro Mining and Yamana Gold are taken out.

In 2005 RAB made a pre tax profit of £25.56 million after paying employee bonuses of £28 million. These figures give an idea of the rapidity with which investments are turned over and, of course, it is in the better companies with more liquidity that trading tends to be concentrated. RAB does not confine itself to mining stocks, but it has certainly played a vital role in the growth of AIM's mining sector. Life is all about balance, however – for every good there is a bad - and BDI Mining certainly seems to have got the dirty end of this particular stick.

[bitterlemontart] 28/3/2006 07:44

Feature Story Date: March 28, 2006

BDI Mining Runs Into Problems As A Result Of Selling By Hedge Funds

Certain events get the nose of a journalist twitching in all directions. It happens at the most unexpected times, but it would be hard to ignore the fact that AIM listed BDI Mining, which switched its advisers from brokers Hichens Harrison and nomad Ruegg on January 19th to the rather larger firm of Williams de Broe, changed back again almost exactly two months later. No reason was given for the original change of advisers, but chairman Paul Loudon was quite wordy about the progress his company had made since listing on AIM in September 2004.

"BDI Mining has successfully made the transition from explorer to producer with the commissioning of the Cempaka alluvial diamond mine in Indonesia. We have also increased gold resources on the wholly-owned Woodlark Island gold project in Papua New Guinea by 75 per cent with additional gold resources to be included in the next resource statement before the end of March, and further step-out and exploration drilling planned for 2006 as the company moves towards its stated target of more than one million ounces mineable. These two projects provide BDI Mining with a significant resource base from which to achieve management's growth ambitions for the company."

Paul Loudon was clearly delighted to have got Williams de Broe on board and the expectation was that the company would raise some money for BDI Mining from new investors to accelerate its progress. It is at this stage that things get a bit fuzzy as no one seemed to want to say much about events after that. A look at the share price chart , however, gives a clue. The price was coasting along at around 35p when W de B took over, but soon after that it drifted steadily downwards to the current price of 27.5 p. Some might say that a fall of 21.4 per cent is not a lot, but it can cause a fair amount of chaos if broker and client company are trying to agree a price for a placing at the time.

The first question that has to be asked is why the share price fell so consistently as the company itself appears to be doing well. Inevitably the name of RAB Capital comes up as one of several hedge funds which had built up a 25 per cent stake in BDI Mining acquired at the very low price of 8p. The sole object of a hedge fund is to make money so it buys shares as cheaply as possible, preferably when management is a bit desperate at the pre-IPO stage. Nothing wrong with that. The problem is that their time frame is skewed against that of investors who became involved with the company through a placement at 30 p per share in April 2005. This is a good price for anyone in at 8p, so there is the constant problem of an overhang.

Another example was Stratex International which listed on AIM at the end of 2005 with a placement at 5p per share. RAB Capital was said to have a holding amounting to 44 per cent of the equity which had been acquired through a pre- IPO at 1.8 p per share. The hedge fund manager could take a nice profit in the 5p to 6p range and that is where the shares sat for the next three months. Bad luck on IPO investors as it is an interesting company with a strategic alliance in Turkey with Teck Cominco, but at least brokers were alerted to the problem and now scan lists of juniors very carefully for hedge fund shareholdings before committing to a funding.

Back to BDI Mining which has clearly been bruised by the experience of changing advisers. Agreement could not be reached with Williams de Broe on a price at which a placement could be made as selling meant that it slipped a fraction on an almost daily basis. The company therefore returned to the old team of Hichens and Ruegg and raised a fraction under £5 million virtually straightaway from supportive shareholders through shares at 28p plus some convertible loan notes. Four drills can now be kept moving on Woodlark Island where the company hopes for a resource of 1 million ozs by the end of the year. It was a salutary lesson for all concerned and Paul Loudon resigned as chairman, after ensuring that he left the company in good financial order.

The reason given is that he might have a conflict of interest between BDI's diamond interests and a diamond company called Diamondcorp with which he is involved in South Africa, and which will list on AIM later this year. The possibility remains, however, that he shouldered responsibility for the decision to change brokers which must have wasted time and money. At this stage it is as well to reflect on the power of these hedge funds which is growing all the time. RAB Capital is an appropriate example due to its activity in London's junior mining sector. At the end of 2005 it had £1.5 billion under management and that has grown since December to £1.8 billion which compares with the total market capitalisation for the sector of £12.6 billion. This last figure reduces sharply to £8.5 million if just four companies, Bema Gold, First Quantum, Peter Hambro Mining and Yamana Gold are taken out.

In 2005 RAB made a pre tax profit of £25.56 million after paying employee bonuses of £28 million. These figures give an idea of the rapidity with which investments are turned over and, of course, it is in the better companies with more liquidity that trading tends to be concentrated. RAB does not confine itself to mining stocks, but it has certainly played a vital role in the growth of AIM's mining sector. Life is all about balance, however – for every good there is a bad - and BDI Mining certainly seems to have got the dirty end of this particular stick.

[doobydave] 28/3/2006 07:29

rambutan,
I think I'm correct in saying that no 'significant holder' has to declare a change in their holding - in either direction - until transactions are complete. Hence my comment about 'still selling'. If Minesite is correct, that is.

Re. obligation to RNS, I had always thought it was a matter of AIM rules rather than domicile. Wendy will probably know. Wendy? Or others?

[rambutan2] 28/3/2006 00:03

in fact, v few share disclosures since they listed on aim. and i see that the last one ocean gave had them still holding 5.5m, which im sure is now out of date.

anyone, does the fact that they are not uk based offer a means for substantial shareholders to avoid disclosure?

[rambutan2] 27/3/2006 23:14

dd,
yes, don't understand how rab been able to sell down and avoid an rns. i suspect that they could still have circa 5%.

[doobydave] 27/3/2006 22:46

Ged,
Fair comment (114) and an interesting Minesite take - thanks. If RAB is the seller, they must still be selling - no RNS.

[ged5] 27/3/2006 21:14

BDI Mining Runs Into Problems As A Result Of Selling By Hedge Funds

Certain events get the nose of a journalist twitching in all directions. It happens at the most unexpected times, but it would be hard to ignore the fact that AIM listed BDI Mining, which switched its advisers from brokers Hichens Harrison and nomad Ruegg on January 19th to the rather larger firm of Williams de Broe, changed back again almost exactly two months later. No reason was given for the original change of advisers, but chairman Paul Loudon was quite wordy about the progress his company had made since listing on AIM in September 2004.

[Abuse team] 27/3/2006 20:50

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