Bdi Mining Share Discussion Threads

[mattybuoy] 08/1/2007 15:26

space,

JV terms vary enormously, but generally they work on a phased basis. So the theoretical partner might initially fund a Feasibility Study in exchange for a 20% stake, with an option to increase to say 50% if the study is positive. For example.

Impossible to say at this stage with Woodlark. I tend to think that the Resource would have to be in excess of 2m oz to attract a partner of any size.

BTW yes, it was the Zijin deal which "sank" AGLD. Temporarily only though, in my view :)

[unionhall] 08/1/2007 14:36

They have bought 2.7m since the last announcement in March 2006....
(Presumably recently or they would have had to announce earlier)

By finishing their buying may have led to the current share price weakness.



Bdi Mining Holding(s) in Company


RNS Number:1125P
BDI Mining Corp
08 January 2007

London office:
Level 5
22 Arlington Street
London SW1A 1RD
England

T: [phone]
F: [phone]

NEWS RELEASE


SIGNIFICANT SHAREHOLDING

LONDON - 8th January 2007 - BDI Mining Corp. ("the Company") reports that it was
notified on the 5 January 2007 that following recent transactions, Al Salam
Opportunities Limited have an interest in 8,150,000 common shares in the
Company, representing 8.1% of the issued share capital of the Company.

[spacecowboy3] 08/1/2007 07:52

Mattybuoy

Thanks for those points. WRT the 'special circumstances' I presume you mean Zijin (sp?) - the Chinese company who were going to buy in and then changed their minds.

If BDI were to JV Woodlark, what sort of ballpark terms might that be on? I'm guessing (and I mean guessing - no knowledge at all!) that if a major provided all or most of the funds then BDI might retain 10-15%. Is that anywhere near the mark?

[mattybuoy] 05/1/2007 19:14

One more thing.

Island projects in PNG are in many ways a lot easier than those on the mainland. Most mainland deposits are located in seriously remote mountainous jungle terrain, which is often only initially accessible by helicopter, and requires the intrepid miners to hack their way through the jungle with machetes (yes really).

Then there is the whole "land-holder" issue. The indigenous peoples have fundamental property rights on all land and must approve all developments. On the mainland, it is apparently quite usual that projects will intersect the land of multiple "tribes". This can cause problems and delays since the adjacent groupings often have conflicts going back centuries. Whereas on the small islands the people are generally composed of a single unit.

[mattybuoy] 05/1/2007 18:57

There are special circumstances surrounding the AGLD share price. Have a look at the thread here if you want to see what. I would not take it as indicative of anything to do with the Simberi project itself.

As for Woodlark, BDI have said that they may JV the project. Which would cut the funding risk drastically. Or even remove it entirely if it was a major involved.

[spacecowboy3] 05/1/2007 18:06

Mattybuoy

Many thanks for that suggestion - i've just spent a very informative couple of hours looking at the presentation and AGLD's website. The latter has some videos of the Simberi project which, although out of date, gave me much better feel for what would be involved in a project such as Woodlark Island.

Bottom line seems to be that AGLD have been able to raise the equity and debt required to finance a $60m development on a PNG island that doesn't look any more developed than Woodlark. They're initially shooting at about 1m oz in oxide deposits (i.e. about the same as current BMG estimates) although they seem very keen on the potential of the underlying sulphide desposits (currently about another 2m oz inferred) - I suppose that might a point in their favour although BMG have talked a good deal about the WI 1m oz being increased.

Anyway, I feel a good deal more comfortable now about the value of WI. As to whether that will encourage me to buy more BMG.... - well a look at the AGLD share price chart doesn't fill me with enthusiasm and the market for resource stocks seems to be pretty negative again at the moment so maybe I'll wait for a bit.

Thanks for the help everyone.

sp

[mattybuoy] 05/1/2007 16:05

I would guess that in reality $45m might be too low. A power station would need to be built as well as extending the port facilities, building roads and doing various things with water.

For a real example of a very similar island-based PNG gold project in the actual construction stage check out Allied Gold (LSE:AGLD). They initially estimated capex at $43m but had to up it to $60m. The presentation below goes into some detail as to the costs

Disclaimer: I hold both AGLD and BMG.

[spacecowboy3] 05/1/2007 15:28

unionhall, Ged5

Thanks for the replies. I had forgotten that the RNS linked by UH quotes cash costs of $300/oz and capital costs of $45m, as well as mentioning the "excellent existing infrastructure". My reading of this, however, is that the infrastructure is elsewhere in PNG, rather than on WI itself - the following are some quotes from the Nov 05 technical report on WI -

Accessibility
Woodlark can be accessed by air charter from the PNG capital, Port Moresby, some 600km to the west, or from the closest principal mainland town of Alotau some 300km to the west-southwest, via an airstrip at Guasopa village on the southeastern end of the island (Figure 1).

Although no scheduled shipping service presently services the island, barges can be chartered from the major centres of Port Moresby, Lae and Alotau, and smaller freight vessels are available at Alatou. A small wharf suitable for barges and local vessels is present at Boiboi on the island's southern coast, some 4km from the project camp at Kulumadau. Other than those of BDI and their contractors, there are few vehicles on the island and no regular transport is available between village centres.

A network of surfaced gravel roads links the airstrip, barge loading facility, mineral prospects and logging concessions. however many of the roads and bridges have deteriorated since the cessation of logging activities some years ago. When weather conditions permit, alternative access between Guasopa and Boiboi is provided via BDI launch along the southern coastline of the island.

Local Resources
A number of local residents have been employed by the various exploration companies in various positions, many are currently employed by BDI, and many would be available for, and suitable for training in, a mining workforce.

Fish and some fruit and vegetables can be purchased from local villagers.

Otherwise all supplies must be sourced from the mainland.

Some earthmoving equipment is available from the former logging concession holder.

Limestone pits are available to supply loose material for road surfacing.
Forest timber is available for bridge construction.

Infrastructure
Woodlark has a small population domiciled in some nine small villages, located primarily along the coastline. Following the collapse of the copra and timber industries, activities are dominated by subsistence farming and fishing. The cash economy is restricted by poor access to markets, with the sale of beche de mer to seasonal traders providing the principle income. This is supplemented to some extent by irregular shipments of traditional ebony carvings, for which Woodlark and nearby islands are famous, and the occasional sale of crocodile skins.

Under the provincial Milne Bay authority, the island is governed by a local council centred at Guasopa, and is serviced by small clinics, trading stores and schools. While elementary and primary schooling is available in the larger villages, no secondary schooling is provided on the island. The island's regular means of communication is via high frequency (HF) radio. BDI's exploration activities are independently supported by both HF and satellite communication.

There is no established power or water supply on the island, with individual generators servicing various local communities, and abundant rainfall ensuring adequate water for domestic requirements. Water for the Kulumadau exploration camp is sourced from an earth dam just to its north.

Having looked at this report again, I think it was almost certainly the original source of my concerns. It does sound pretty undeveloped (not to say idyllic, from the comfort of my home in the UK - presumably not so idyllic for the people who actually live there!). Presumably, however, the $300/oz cash and $45m capital costs quoted above must have taken the undeveloped nature of the island into account, or is that the sort of detail that only gets looked at in a full BFS?

Thanks again for the replies.

sc

[ged5] 05/1/2007 12:04

spacecowboy3,

I was going to suggest that doobydave and unionhall might help here, since they had some discussion about the infrastructure some time ago. I now see unionhall has replied.

There has also been some mention by the company in RNS statements and I seem to remember some mention in the presentation. I'm sure you'll find the information from the links in the header.

Also they were hoping for upto 2m oz resource. This project is at an early stage and they keep updating the resource.

There was also some discussion by the company as to whether to split the 2 projects possibly by selling one but the decision was made to keep them both. I think the price drifted after that decision.

[unionhall] 05/1/2007 11:52

spacer - I had the same question some time ago when I read the following (unsupported) line in RNS of Oct 24th....

Excellent existing infrastructure for comparable projects in Papua New
Guinea

Overall RNS had very positive mood - as one would expect....



Cannot help further...

[spacecowboy3] 05/1/2007 11:19

I first bought a small holding of these in January last year, thinking that they seemed good value at 35p! I have been very tempted to double that holding as the price dropped by 50% but have been held off doing so largely because of the following concern (which I didn't think enough about at the time of my purchase - must try harder next time!).

Woodlark Island seems very remote and virtually without infrastructure (does it have an airstrip?). My concern is that this may make mining development costly and possibly impractical. Presumably all equipment, construction materials and everyday supplies will have to be shipped in/out and all facilities will have to be built from scratch? OK, I realise that many mines are in remote places and so accommodation, etc. has to be provided but is Woodlark not outside the 'normal' spectrum of remoteness? How much higher than 'normal' might costs be at Woodlark and is a 1m oz resource big enough to justify these?

Presumably it's clear that I know nothing about mining operations/costs so I'm hoping that someone more knowledgeable can give me some pointers, please :-)

I should say that the diamond operation looks good enough on its own for me to retain my small holding. I'm just wondering how big/realistic the potential upside from Woodlark might be.

TIA for any help.

[ged5] 04/1/2007 22:17

Pleased to see you're still a holder, I hope you start to post more often. There doesn't seem to be much sentiment for this company even though they have two great projects.

There still seems to be some question marks about the holdings of the shares which holds us back. The recent rise was on no news, so I suppose this pull back was expected.

I still expect us to rise later in the year.

Some good news is that in researching La Nina, which we had last year I found that they usually follow in the year after El Nino and is unlikely to happen again this year. Let's hope the production of diamonds isn't hampered this year!

[poacher45] 04/1/2007 16:23

Thanks Ged5 I still have a good holding in BDI. I sometimes find even though a share can look really good it can take a long time to be appreciated. I am still confident and am looking forward to seeing how much the blue diamond makes and lets hope that it is the first of many.

[kluk069] 30/12/2006 07:23

The aforementioned CLARITY issue is the only concern here.

Bmg is now a great story but the fact remains that the recent 50% plus rise has come on the back of overwhelming selling. It would be nice to think that in this day and age info such as the destination of multi million share parcels going through way below bid would be available to all - sadly that is not the case.

Risk taking ought be a level playing field - not just exploitatation of news by a chosen few in the know over those kept in the dark.

[sitiain] 29/12/2006 09:53

well they have named it the chelsea blue.. i know a rather wealthy russian who might want to pick that up to put in a show case at a certain football ground.
but.......
what could be around the corner.?
i think we will see the bigger producers buying up reserves next year.the diamond market looks very under supplied.
they are not cheap to get out of the ground in south africa, plus the large tax there, which might make this stocks valuation very cheap to a larger producer.
also there are companies around globally whose gold in the ground is valued at 30 dollars per ounce.
that would put the gold assett here worth 30,000,000 dollars alone.
if they produce 100,000 carats next year , as planned and keep about 100 dollars per carat profit that could put the valuation through the roof.
i think there are diamond producers around who trade at 10/15 times profit.
just imagine if it all works out..........
30 mio for the gold
10,000,000 times p/e of 10 gives us 110,000,000 dollar market cap.(110,000,000 for us as indonesian govt owns 20 percent of the diamonds, so 30 for gold, 80 for diamonds)
aprox 86 million shares.
that is a sterling share price of 65 pence.
so you can see why people are taking a punt.
all speculation of course but the numbers are all there.
happy new year to all.

[willydoctor] 29/12/2006 09:41

I do know that they are trying to increase their presence with UK brokers having previously been largely focused in Aus. I presume that they have started to do this and whatever the brokers are hearing is thought to be good. Also if what I have been led to believe is true and a previous major shareholder is now cleared out it would explain why previous rises on good news have always been followed by a fall as the stock overhang brings it down again. Wd be interesting if anyone else has any well informed rumour!

[greg jenkins] 29/12/2006 09:20

Its amazing the effect that recycling a few old insto shareholders has had on this. If anyone has any ideas of any rumoured news (besides the sale of the blue diamond) I would be interested to here them...

[willydoctor] 29/12/2006 09:15

Blimey - up and away! I can't imagine that this rise could be accounted for by just the blue diamond sale - goo though it is I think it must be rumours of positive news which is doing this.

[humbry1mol1] 29/12/2006 09:01

these really are climbing, me thinks good news on way next week, possible that they have sold blue diamond for very good price.

[willydoctor] 29/12/2006 07:35

Morning Sitiain,

Sorry - can't point you in the direction of anything specific, but this is what I am led to believe has been suggested by BDI management. I entirely accept that this is completely hearsay - so don't bet your proverbial house on it! If anyone is close to UK brokers who have had contact with BDI it would be interesting to know if this is a consistent story. Still - strong day yesterday which was good considering that many people are off this week and if not probably spending most of their time playing office golf!

[sitiain] 29/12/2006 07:23

is there anything official that rab have been cleared out.?
if indeed they were the seller.?

[willydoctor] 28/12/2006 17:50

I seem to remember reading somewhere that the seller was RAB who are now cleared out. Also I gather that BDI are doing broker presentations in the UK to increase awareness - so I imagine there will be some good news for them to buy in to. Still - looks good!!
Happy New Year all.

[sitiain] 28/12/2006 10:02

i think there is no real clarity.i feel the AIM market has far too many resource/exploaration companies and volume are not enough to clear any large sellers.
i feel this stock has suffered from a large seller , which has been discussed earlier.
i would like to know who has picked up the shares as there has been no statements.my bet would be an existing large holder close to the company.
we have also had good news regarding diamond production .
it is interesting to look at petra diamonds and their valuation.diamond prices seem to be favoured to go up due to lack of supply.
i see no reason for the price fall here apart from the large forced seller.
so i guess the share is just taking back lost value.
i hope so as i see real value and upside here if they can hit their carrat target of 100,000 in 2007.
the large gold companies are also in need of new supply and maybe BDI can get a better price than 15 dollars an ounce in the ground which is where i have based my valuation of the comapny.
it can be valued as high as 30 dollars.
happy new year