Chromex Share Discussion Threads

[seagreen] 23/4/2009 10:21

umloved, unsung, undervalued...perhaps when the ex blue oar talented south african analyst starts at panmure we will hear the story develop

[andy] 18/9/2008 00:20

It's been about a year since Proactive last looked at Chromex Mining, a company with two chrome projects based in South Africa. It's been an eventful twelve months that has seen a mixture of good and bad news, but its share price has doubled and not many junior miners can match that feat.
A quick recap to begin with. Chromex came to the market in September 2006 at 20p per share. At the time, it had one project in the eastern limb of South Africa's Bushveld Complex, called Mecklenburg. The Bankable Feasibility Study for this was completed in March 2007 but the Mining Right was only granted last month due to a delay caused by a conflicting claim from Samancor that was eventually thrown out............

[kenatbabken] 29/7/2008 07:29

Some photos from the start up of mining at the Stellite mine

[shortman3] 02/7/2008 15:34

Positive move today more to come over next few days!

[bizz2bizz] 19/6/2008 08:44

Bit quiet here of late, never mind we're still on the up and up. After last weeks attempt at pulling the share price lower failed, there appears strong support from certain areas (probably the 86% held in safe hands). The placing at 40p was a success with institutions and, I'm led to believe that it was over subscribed! Is it really worth trying to short this stock, it's illiquid at the best of times but if the shorters do want another go I'm in again at 36 on the true belief that this is a money maker.
In the times today "International Ferro Metals led the FTSE 250 risers, climbing 9p to 149p, aided by the prospect of rising Ferrochrome prices" Should be an intersting run when we start production on our assets. Mkt cap £22mio how about double that?

[bo doodak] 23/5/2008 15:43

In todays market place that run up in the share price prior to the placing speaks volumes for shareholders' future prospects

[kenatbabken] 23/5/2008 07:13

Its an excellent bit of business and less dilutive with the placing at 40p
The share price should be strong today

[bizz2bizz] 17/5/2008 21:25

Nice late on Friday @ 40p. Next news we will be targeting 50p. Still cheap £21mio going into production soon.

[kenatbabken] 16/5/2008 16:24

This is bubbling up nicely some positive news and it,ll smash through 40p
and be off to 50p in no time

[kenatbabken] 06/5/2008 08:29

Other way around mate. Start putting too many fines (without pelletizing) in a furnace and BANG you'll get explosions. It will sell with a discount to 50-150mm std lumpy ore. Plus don't compare CHX to IFL, one is making metal the other is not.

If you read my post again you will see that I was not suggesting that unpelletized ore was used to charge a furnace but exported as pellets or fines

[kenatbabken] 06/5/2008 08:12

P Bear

Might I suggest you read the Bankable Feasibility Study Document issued on the
18/04/2007 item 12.4 on page 224 of this link where it clearly states.

"the lumpy ore is to be sent to local smelters and the higher valued fines is exported"

[p bear] 05/5/2008 19:43

> the lumpy ore is to be sent to local smelters and the higher valued fines is exported

Other way around mate. Start putting too many fines (without pelletizing) in a furnace and BANG you'll get explosions. It will sell with a discount to 50-150mm std lumpy ore. Plus don't compare CHX to IFL, one is making metal the other is not.

[kenatbabken] 05/5/2008 10:50

As we do not as yet have information from CHX regarding exactly what their intentions are for the Mkhombi Stellite mine I can only make a few generalisations.
The location of the mine on the Eastern Limb of the Bushveld Region is in the same location as IFL,s Buffelsfontein and Sky mines so we can presume that the
metal content would be similar at 30% to 36%.
Again until we have information if we base assumptions on the Mkhombi Stellite
mine using similar methods to the Mecklenburg mine on the Western Limb where
the lumpy ore is to be sent to local smelters and the higher valued fines is exported or whether they would install a mill to grind and or pelletise the ore
to achieve higher grade and valuable ore for export we shall have to wait and see.Ether way CHX can be in production quite quickly given that 3 million ton are opencast(This also allows for low cost Tailings disposal)
The short time into production allows CHX to take advantage of the current high prices available and long term electricity issues in SA mean that high
prices would be maintened.
Given that China has recently agreed 65/70% increases in iron ore prices indicates to me that any down turn in demand is someway off.
CHX is the new kid on the block and may find it harder than the established companies to find and agree take off agreements but that is reflected in the
Market Cap of £23 million to IFL,s £743 million.

Until more information is available we can only speculate an as always DYOR

[f430] 04/5/2008 20:51

P Bear, thank you for that, very interesting. i will do some more research

[p bear] 02/5/2008 17:25

F430 - to really understand reservations I have about CHX you have to understand how the chrome market turned on it's head in Jan this year as the power situation in RSA unfolded. Basically for the next 5 years no one (okay a few smelters might get something, but this is not sure yet) gets any extra power to smelt chrome ore in RSA and all have to reduce their power - with strong demand and most of the world's Chrome coming from Southern Africa this basically doubled prices from already historic highs. So CHX are very unlikely to be able to produce any actual chrome any time soon and when the power situation is removed the prices of FeCr will drop significant. What CHX have is ore which is in no short supply from XTA, IFM, Samcor, TATA in south Africa already, not to mention the Turkish, Indians and Kazakh. To fill the supply cap in FeCr those with the furnaces and power outside South Africa will be buying ore, but these are mainly the Chinese who can buy from closer to home better quality ore than that CHX have (which is only good for something called Chr Chrome, which commands a lower price right now than other versions). Also you have to consider just where freight rates are right now and this puts South African ore at a big disadvantage to others. Plus you have to consider how power and coal is a big part of the conversation price of ore to FeCr so you can't just take the ore anywhere and make FeCr and still have huge margins.

I can't make a call on how CHX will do, but my reservations are there are maybe better Chrome plays in IFL and ENRC (although these are totally different in their risk/reward to CHX and I don't compare directly). I am however much happier with the risk/reward of someone like ENRC/IFM as they should get actually FeCr (not ore) big expansions on stream while prices are high, whereas when CHX get everything sorted there is a danger power issues could have eased (and maybe a bubble burst, plus China will slow down hard one day) and the seemingly big reward for the risk you take now will be much less. If I want big risk and huge reward I would look at some of the big Zimbabwean Chrome outfits.

No advice intended in any of this. Only my thoughts taking into account what I know about CHX and my investment style. If you want more information about FeCr, then the IPO prospectus of both IFM and ENRC are a good starting point. For market information a subscription to metal bulletin and CRU's monthly reports are worthwhile.

[kenmitch] 02/5/2008 16:21

No. MW has not tipped/followed CHX.

Shares down a bit today and still no news to explain the recent rise.

[bo doodak] 01/5/2008 20:59

Kenmitch, do you know if MW has started to follow this share himself, good omen I would say if so

[f430] 01/5/2008 20:51

P Bear. From your early posts i see that you recon yourself a bit of a Chrome expert. Can you let us all know what your reservations are about these Ords? Please keep it simple, i am a bit slow on these things...

[kenmitch] 01/5/2008 19:37

A bit of information on the warrants for those interested.

Expiry date is September 2011. Exercise price is 20p and there are only around 5 million in issue so they are not easy to trade in any size.

But the warrants are currently amazingly cheap.

Shares at 40p to buy earlier today and warrants 18p to buy and 16p to sell.

That means the warrants are trading with nothing extra to pay for time value. In fact it is even better than that - they are trading at a discount. For a warrant with over 3 years to run to be trading at a discount is fairly unusual. Normally a long dated warrant commands a premium for time value.

So if not familiar with warrants, target prices are easy.

40p for the shares and the warrants should be 20p
50p for the shares and the warrants should be 30p
60p for the shares and the warrants should be 40p etc.

These figures assume that as now there is no premium for time value. If the warrants continue to trade at a discount then the warrant price would be a bit lower. One way to get the full price is to exercise the warrants - but few warrant fans do that except sometimes near to expiry date.

Of course there is a chance that the warrants will get less cheap and command a premium again, in which case until near to 2011 expiry date the warrant prices will be a bit higher than above.

Gearing on the warrants is around 2 times - very low compared with some other warrants but still means the warrants going up about twice as fast as the shares as shown in the figures above.

Warrants are traded just like shares - code CHXW - and can be bought and sold at any time and any number of times. They do not have to be held to expiry.

The warrants will only expire worthless if the share price is 20p or lower on expiry date.

Warrant spreads are often wide and they can be difficult to trade - especially selling at the quoted price if the shares have a bad time.

But the greater upside compensates - and for some warrants (not CHXW) that upside can be 10 or more times.

i.e the supposed risks are overstated. Even so investors normally have to sign a risk form before being permitted to trade them. The risk form warns that warrants are volatile - they aren't always - and can expire worthless. True but only if the shares fall to 20p and stay there or lower. And even below 20p the warrants will command some time value until near to expiry date.

I bought the warrants some time ago as the shares rose and then sold them again for a small loss when the share price fell back, and luckily (but it often happens) the warrant price held up.

I bought a few back yesterday for just 12p following a post on Chromex and Chromex warrants on Mike Walters bb. Looks good timing - so far!

[bo doodak] 01/5/2008 19:03

I'm pretty inept at computers I'm afraid, but I'll jot the numbers down on the other site.

[p bear] 01/5/2008 18:43

Hi Doodak, I guess that's the expiry. Got to say I know nothing about CHXW (and think you should start the thread). I do have my reservations about the ORD as you can see, but I hope you tucked some of the warrants away at 9p or whatever they were a few days back and wish you luck.

I've been taking a good look at OREW, but am put off by the cap just now.

[bo doodak] 01/5/2008 18:28

Management changes

[bo doodak] 01/5/2008 17:33

Well well, PB see you found this, this was the main one I said I was researching a while ago as the important date is 2011 if you take my meaning

To my mind this has massive potential.