China Africa Share Discussion Threads

[rich pickings] 10/2/2014 18:35

Best volume for months. Not much stock (let alone with the MM's) as 90% is held by CAF & WTI. With more interest then this should move quickly. There is a board meeting next week I believe and (based on last year) interim results early March. I think they will want to report the FS before the interim results so not long to wait before we get confirmation.

[soulsauce] 10/2/2014 13:16

Bid strengthening, hopefully we can get some interest ahead of the FS.

[rich pickings] 10/2/2014 06:51

From the last line in the RNS of 29Jan 2014 I took it that there was a very good chance of the mine going ahead, so for me the risk/reward is good.

"it is expected that commercial terms will be agreed once the smelters/refineries identified have completed a more detailed round of testwork"

[danieldruff2] 09/2/2014 19:52

Well it's all guesswork at the moment but we should find out for sure in the next couple of weeks so not long to wait. Bit of a punt at the moment but I would say it's worth 3 times the current price if the mine goes ahead and diddly squat if it doesn't - unless they have a plan B up their sleevies.

[rich pickings] 09/2/2014 16:15

According to my estimates I really think CAF is under the radar & has an incredible amount of potential.
Can anyone see if these estimates are realistic to back up this view:

Background:
Reference RNS 29 Jan 2014:
The Company announced a maiden JORC resource during 2013. The JORC Indicated Mineral Resource is situated between the 14 and 19 levels (approximately between 350m to 550m below surface, where the majority of historical resources are located), is 1,264,800 tonnes @ 15.5% zinc, 3.8% lead and 0.33% V2O5 at a 3% Zn cut-off. (Resource is 100% attributable to the Company.)

This has shown the deposit to be an exceptionally high grade zinc/lead deposit with much of the significant infrastructure in place including an 800m shaft and underground development which should allow rapid and cost effective reopening of the mine.

In addition to standard lead and zinc sulphide concentrates, the project produces two other products. The first is a combined zinc oxide/silicate concentrate and the second is a vanadium rich lead/zinc concentrate. The key challenge for the project is to maximise revenue from all metals contained in concentrates and, in this respect, matching the concentrates to the different capabilities of smelter/refineries is important. Initially, samples were sent to a number of smelter/refineries in Namibia, Thailand and China and based on their response, the company has identified the most suitable destinations. It is expected that commercial terms will be agreed once the smelters/refineries identified have completed a more detailed round of testwork.

I have made the following assumptions:
Of the 1,264,800 tonnes, 1m tonnes is mined over 8 years = 125000tonnes per year
$100 per tonne operating cost ($60-$100pt quoted in video presentation July 2011)
$75 per tonne shipping cost to Smelter (Assume in China/Thailand)
Admin, finance costs etc $10m

I have used the % per tonne of Zinc,lead,silver,vanadium in the latest RNS
Combined revenue per tonne = $320

as at 09/02/2014

Zinc $2022 15,5% $313

Lead $2119 3,8% $81

Silver $19,87 3.2oz/t $62

Vanadium $0,65 0,60% $77

Total $534
60% payability at mine gate (as per Video presentation July 2011)
= $320 per tonne

On this basis:
Revenue (125000 tonnes p.a) $40,000,000
less: Operating cost $12,500,000
Shipping cost $ 9,375,000
Admin, finance etc $10,000,000

Operating Profit before tax $ 8,125,000
tax $ 2,845,000
Profit $ 5,280,000

$ to GBP (1,65) 3,200,000gbp
shares in issue 23.076.924
profit per share 13,87 per share
if PE ratio = 6 83 pence

Add into this the potential...
From their website the mission & strategy is:
Whilst the immediate focus of the Company will be the development of the Berg Aukas mine, the Company's strategy is to build a profitable and widely based resource business that may include the acquisition of additional assets from Weatherly, ECE or third parties.

ECE is an active explorer in Namibia and other parts of the world and the expectation is that new discoveries will be vended into the Company at an appropriate time. ECE has recently obtained 18 exploration rights in Namibia, including gold, copper, iron ore, and zinc that cover an area of approximately 7,146 square kilometres.

ECE also have considerable assets in China whose development may benefit from being transferred into the Company particularly where additional capital is required to develop their full production potential.

Please feel free to validate my assumptions...

[soulsauce] 08/2/2014 07:13

The zinc deficit will widen to 120,000 tons this year from 20,000 tons in 2013, Morgan Stanley said in a report on Jan. 22. It will increase to 180,000 tons in 2015, the bank estimates.

China's imports of refined zinc rose 22 percent to 624,165 tons in 2013 after jumping 48 percent in 2012, according to customs data.

[soulsauce] 29/1/2014 14:03

Couldn't agree more pedro.

[pedro57] 29/1/2014 13:53

If all four minerals mined in Berg Aukas could be reflected at market prices in the feasibility study it would increase economics of project considerably and with recent bullish commentary around Zinc production dropping strongly in the future and lack of quoted Zinc companies CAF remains very interesting (Berg Aukas zinc ore grade at 17%) given low market cap. Most importantly a lot of infrastructure has already been built at Berg Aukas when the mine was active, which also improves the economics considerably. Very exciting indeed!

[soulsauce] 29/1/2014 13:35

Yep lets hope so pedro, I like that they have been talking to several smelters to match concentrates.
This really could turn out to be a very lucrative mine, I hope I am not wrong.

[pedro57] 29/1/2014 13:33

Having listened to Rod on the conference call I thought the discussion around the feasibility study of Berg Aukas had a positive vibe as if are having discussions on commercial terms for all four products of the mine the economics would improve even more.

[soulsauce] 29/1/2014 13:04

Nice update:

In addition to standard lead and zinc sulphide concentrates, the project produces two other products. The first is a combined zinc oxide/silicate concentrate and the second is a vanadium rich lead/zinc concentrate. The key challenge for the project is to maximise revenue from all metals contained in concentrates and, in this respect, matching the concentrates to the different capabilities of smelter/refineries is important. Initially, samples were sent to a number of smelter/refineries in Namibia, Thailand and China and based on their response, the company has identified the most suitable destinations. It is expected that commercial terms will be agreed once the smelters/refineries identified have completed a more detailed round of testwork

[pedro57] 23/1/2014 10:02

ECE (East China Mineral Exploration & Development Bureau) is the majority shareholder of CAF owning 65% of the company and having financed the Berg Aukas feasibility study in return for a 65% stake in CAF. Therefore holding the board meeting in China where ECE is based makes sense. I would however not be surprised if Rod Webster's visit to China would involve additional meetings with banks and other companies that would want an offtake agreement for Berg Aukas output or provide financing.

[jp2011] 22/1/2014 18:26

Why is the Board meeting being held in China? Could it be that's where the loan will come from.

[soulsauce] 22/1/2014 16:20

pedro excellent work, many thanks.

[pedro57] 22/1/2014 13:04

Based on the high ore grades of Zinc a mineral, where the market has become increasingly more bullish given expected supply/demand imbalances following substantial mine closures and lack of new projects coming online next to three other minerals that can be mined at Berg Aukas (lead, silver and vanadium oxide and the fact that there is still a lot of infrastructure in place when the mine was active it is hard to see how the feasibility study will not be very positive. It is also important to keep in mind the lack of zinc plays globally, the low market cap and the illiquid nature of this share (only 10% free float of which a lot is already held by people that will not sell until shares reflect real value). It will be an exciting year for CAF and only until end of February to wait...

[danieldruff2] 22/1/2014 12:43

Thanks pedro, so just a few more weeks to wait to see what the project is worth - current market cap of 7 million must be too low if it stacks up.

[pedro57] 22/1/2014 12:29

I listened into the WTI (25% shareholder of CAF & in-charge of managing feasibility study) conference call today. Regarding CAF feasibility study will not be completed until later in the year. The reason for delay is that marketing study for two of the four minerals (I think this related to vanadium oxide and lead) that can be mined at Berg Aukas is not done yet. There were talks with parties that were interested in buying these two minerals, where there is not such a ready world-wide market that needed to be finalised to arrive at full feasibility study, where all four minerals mined at Berg Aukas (zinc, lead, silver, vanadium oxide) could be reflected in feasibility study at market prices. There is a CAF board meeting in China in third week of February to which Rod is going and there will definitely be a published pre-feasibility study around this time. The delay in the published CAF feasibility study is annoying, but if all four minerals mined in Berg Aukas could be reflected at market prices in study it would increase economics of project considerably and with recent bullish commentary around Zinc production dropping strongly in the future and lack of quoted Zinc companies CAF remains very interesting (Berg Aukas zinc ore grade at 17%) given low market cap and a lot of infrastructure already in place.

[soulsauce] 20/1/2014 20:30

hxxp://www.richriver.bc.ca/attachments/ZINC_PRICES_ARE_GOING_TO_EXPLODE.pdf

[danieldruff2] 18/1/2014 13:55

Spotted this on the Herencia Board, interesting opinion on zinc

www.mining.com/web/zinc-or-swim-do-base-metals-have-a-future/

[soulsauce] 15/1/2014 09:22

Looking perky again, FS should be close.

Bidding for 37,500 on-line, not seen that amount for a while so may be a few looking to buy in.

[racinglad] 08/1/2014 15:32

Totally agree, any positive news, and the shares will move very quickly. Very few shares in free float! Look for a quick price rises soon, hopefully! Keeping fingers crossed.

[soulsauce] 08/1/2014 15:07

With the previous knowledge on Berg Aukas, much of the infrastructure already in place and forecasts good for zinc and lead it is hard to see how the PFS will not be positive.
If it is not I really won't understand why they did it in the first place with what was already known.

The problem here is everything happens at a snails pace and updates are far too infrequent. That said with good news, as daniel says the mkt cap is way too low but you will also have trouble buying the tightly held shares in the market so to get in now and to buy in any decent amount it is a bet on the news being good.

[racinglad] 08/1/2014 14:58

At the Weatherly AGM, they said the CAF prospect was very exciting!