Euro.Mins. Share Discussion Threads

[strow] 18/9/2007 10:36

Simon-how are you keeping?

[simon54] 18/9/2007 10:33

Thanks bahamas. I wouldn't exactly say "almost no implementation risks" until the first few months have passed off successfully, but I guess I don't mind Aton saying it! ;-)

[bahamasoil] 18/9/2007 08:29

Found this on the Aton.com website

European Minerals. Starts production at its Varvarinskoye mine
European Minerals started production at its Varvarinskoye mine on Friday Interfax reports. The commencement is slightly ahead of schedule, as it was expected in mid-October. Kazakh President Nursultan Nazarbayev participated in the opening of the mine, which could suggest a favorable government attitude towards the project.
We view the news as very positive for the stock, as now the company carries almost no implementation risks and management has proved its ability to deliver results on schedule.
We rate European Minerals Buy, with a 12-month target price of $1.44.

Is this the reason for the mark-up?

[chipperfrd] 17/9/2007 20:03

gisjob2 - re hedge: unfortunately it was a condition of the original debt finance dating back to December 2005 and is invariably an investment cross we have to bear. It is good to find a startup without hedge commitments but they can be a bit thin on the ground.

Kibb2 - you may well be right about the level of annual sales into the hedge although it could prove expensive in the longer run if POG keeps trending upwards.

I note the share is 8% higher in Toronto tonight. Perhaps sentiment in Canada is not so tainted by banking issues as the current London market!!
Chip

[kibb2] 17/9/2007 07:50

> Chipperfrd

Re your numbers.

I have a lower figure being sold into the hedge (443,000 Oz over eight years is 55,375 @ $574) and therefore a higher figure at spot (93,600 @ $670 to use your gold price).

My cost figure comes out similar to yours and I end up with a similar EPS for year 1. I have not yet extrapolated for future years so it is good to see your figures.

K

[gisjob2] 17/9/2007 00:01

Anyone care to comment on the low hedge price, at least hmb and mcr have no debt and have no hedge so will gain full benefit of the gold price. I'm not knocking this share, i think it's a winner, but I think it's hedge price has held the share price back a little.

[chipperfrd] 16/9/2007 15:42

Thanks Strow, you make some good points, perhaps that is why the Canadians appear to be holding back the share price this close to initial production.

Must admit I have long kept my buying limit to the mid 60's and have not really amassed a big holding because it was looking a bit too good!

Let's see how we go once we are into initial production. Hopefully, the company will then provide their own guidance regarding future growth.

Chip

[strow] 16/9/2007 13:06

Chip-all well and good if they really are going to ramp up as deslauriers states in his article,but if you read some of the responses to it,someone says that the company doesnt seem to concur with him-i e-mailed them about it also and didnt get a response and the bfs and recent announcements have given no indication that this is their plan and in fact production of copper reduces in subsequent years-i do think deslauriers has ramped this for all its worth,but even at 2008 production rate which we know to be a fair reflection,they will be throwing off oodles of cash and with eps of 22p,we are still looking at £2.20 on a p/e of 10-not bad from here-i would hope that they will be looking at a decent aquisition or two,to bolster the foward pipeline-this will really bring the fundies in

[chipperfrd] 16/9/2007 12:22

FWIW, this is a summary of my worksheet.

2008
SALES
HEDGE .. 75,000 @ $575 = $43m
SPOT .. 74,000 @ $670 = $49m
Copper . 26m lb @ $3 = $78m
Total ................ = $170m

Costs = $38m
G&A = $10m (?)

Net earnings = $121m (I assume there will be large tax credits)
EPS = 22p

2009 (with 75k hedge and 125k at spot + 40m lbs copper)
EPS = 33p

2010 (with 75k hedge, 250k spot + 90m lbs copper)
EPS = 69p

If anyone has an alternative set of numbers or has spotted an obvious mistake in my estimates, please provide feedback.

Chip

[wolstencroft] 16/9/2007 07:40

if only producing peers really did trade on 10x cash flow! Rough estimates on forward cash-cost BITDA flow: MCR x2.3, SRB x4.1, AVM x8.4, CER x4.4, NGG.V x4.4, CGG.TO x3.7, AGLD x4.1, RCT.V x8.2,.....

I think 4-5 times cash flow might be more reasonable (remember quite a few copper credits). There were many warrants, and possibly still are, and these might have to be factored in.

I'm not a holder but have been in the past and may well be again. Canaccords fund raising from a year or two ago made be sell. Compared to the above EPM not only has volume but scaleabilty but then so does AGLD and CER, which I would say speaks in its favour. I think SRB for example is not taken "seriosuly" because it produces too little and MCR does have the exploration or production upside. But then AGLD and CER have some upside and are lowly rated.

[donaferentes] 13/9/2007 19:04

10 X 0.50Ç @ 2.10 ex. rate = 238p per share - nice!

[chipperfrd] 13/9/2007 18:58

Too true Simon! However, that is something we are used to in the types of stock we hold ;-)

[simon54] 13/9/2007 18:42

Cheers Chip - yeah, I'd seen that myself. 'Be right and sit tight', eh? :-)

[chipperfrd] 13/9/2007 18:12

Part of an article on RI today. My spreadsheet comes up with a similar projection so I find it a bit odd that the market is remaining indifferent!

"European Minerals [TSX:EPM] is a story that is going to be in production next month and throwing off well north of 50 cents per share of cash flow - shares are trading at C$1.15! Producing peers trade at a multiple of 10X cash flow at least, and we can only assume that once production commences the analyst and institutional community will finally be forced to take notice, making a re-rating imminent."



Chip

[donaferentes] 11/9/2007 08:10

Why the 2.5% fall yesterday on high volume? No RNS yet re significant disposal.

[strow] 10/9/2007 16:17

Suprised this is taking such a hard hit given the figures in that resource investor article and the pog-they will really be raking it in soon-i have e-mailed the co to ask them about this supposed ramp up plan that deslauriers was mentioning-it doesnt sound that likely from the rnss,although even at the planned rate,at these prices ,they will be making big bucks

[deka1] 30/8/2007 20:15

new to this board , just looking through posts , i hold only gold related stocks and thinking of getting in here , read the ri piece looks interesting

[donaferentes] 30/8/2007 12:31

chip - thanks for the great reply.

[simon54] 30/8/2007 11:29

Hi Chip - yes, I am still holding, but I've been abroad and have not been posting much anywhere (flaky dial-up connexion etc.). I did top-slice a bit in July but intend to carry the rest forward :-)

[ianctaylor] 30/8/2007 10:55

It looks like the 2010 warrants in the article are Canadian:

Share Structure
Capital Structure and major shareholders as at Aug 13, 2007

The authorised share capital of the Company consists of 100,000,000,000 common shares of no par value.
The Company's capital structure consists of:
Issued share capital 280,163,724
Warrants outstanding 129,957,948
Expiring on 23/12/2008 at US$1.20 7,500,000
Expiring on 30/09/2009 at GBP£0.40 1,250,000
Expiring on 11/04/2010 at Cdn$1.20 71,888,240
Expiring on 30/11/2010 at Cdn$1.00 2,000,000
Expiring on 21/03/2011 at Cdn$1.55 38,717,558
Expiring on 17/10/2011 at US$0.93 8,602,150
Agents compensation warrants
Expiring on 21/09/2007 at Cdn$1.05 3,467,382
Share options granted 26,190,000
(Expiry dates vary between 30/09/2006 and 14/04/2007 at strike prices of between US$0.37 - US$0.86 and between Cdn$0.68 - Cdn$1.74)
Fully diluted 439,779,054

The Company's major shareholders as of 13 August 2007 are:

Charlemagne Capital (IOM) Limited 34,990,575 12.49%
JPMorgan Asset Management 16,254,100 5.80%

In accordance with the AIM Rules (Rule 26), in so far as the Company is aware, the percentage of the Company's issued share capital that is not in public hands is 12.79%.

[donaferentes] 30/8/2007 09:08

nice article chipperfrd. do you know if you can buy the warrants on AIM?

have been looking to increase my holding in these on the recent dip, but alas no funds, but the warrants would require less cash outlay, although inherently riskier. still 8-bagger over a year or two always looks attractive.

[chipperfrd] 30/8/2007 02:58

Two months since the last post?? Simon, are you still holding?

Anyway, just in case anyone needs reminding about the potential upside, RI have just done a new piece on EUM.


I have been adding a bit this year but probably should be holding more. I was looking at my earnings model only this week and thinking 'why am I not more bullish about this share?' .... and I did not really have any good answer!
Chip

[simon54] 29/6/2007 21:34

Yes indeed, Mike :-) Slowly, slowly, catchee monkey ;-)

[mikehardman] 29/6/2007 21:32

new highs boys & girls !