Finders Resources Share Discussion Threads

[soulsauce] 08/11/2010 19:21

Oooooh a nice time for a gold update!!

[coffeelito] 08/11/2010 17:23

Many thanks Tarnow.

[soulsauce] 08/11/2010 15:19

Cheers tanrow, close to breaking out, good news on the gold should do it.

[jonny flame] 08/11/2010 15:13

Good post Tarnow.

[tarnow] 08/11/2010 14:03

Hi Coffelito. Using Chips calculations, I came up with my own valuation. Based on just wetar and a PER of 4 (Average for metals on ASX: source Mining Valuation Handbook) gives a price with current share issue of 87p. Using price to cashflow of 3 (source: same book) gives price of 83p. We have 7 million shares left to dilute with options and convertible loan. Insignificant amount. However any more dilution for fund raising is any ones guess. But I think a lot of companies like equity placings as they see them as easy money, and keeps the large shareholders onside. However FND could fund stage 2 from loans.

The latest Blackswann broker report gave 400 million fully diluted. I hope not :-(. Based on current copper price came up with NPV of $312 million or 68p a share. Which still makes FND undervalued and a good buy. I valued ojolali at about 10p share or 30 million. As this seems comparable with other explorers of 1 million ounce resource which I'm confident will get to. Always had in mind a Market Cap of around 300 to 400 million for FND when I first came across them. With current share issue still comes out around 100p to 145p (depending on final total of shares in issue). Which no one can predict. That is the thing Coffeelito. It's interesting to try to come up with valuations, but they are after all just guesses. The main thing is I still see FND as undervalued and still expect multiples (minimum 3)of this share price by 2013.

Upside see as copper price higher than now. Ojolali- great potential, and not priced in. Especially if they can get demo plant into production quickly, although with Indonesia nothing mining happens quick.

Downside is share dilution. More permit delays. Fall in copper price.

It pays to be conservative on estimations and future and be surprised to the upside. Even being conservative FND is still a buy in my book. All the best Tarnow

[tarnow] 07/11/2010 20:19

Hi Coffelito. Will give an explanation of my estimates tomorrow when I have more time. So try to post tomorrow. But the short answer is yes. Exploration guess factored in, but not any production. O/T Have brought into HMB last few weeks. Check it out. Should interest you if you invested in FND. Chip has just updated his calculations for HMB. It is a gold mine ramping up production and is now my my third largest holding after VGM and FND. In that order. Its my belief that you want to be invested in precious junior mining companies in the next few years. But ones which are producing, or very near to it (>2 years). Because I think this bull run will be over in 3 to 5 years. And so ounces in the ground will be no use. Production and Profit after all is everything :-)

[coffeelito] 07/11/2010 11:21

Thanks Tarrow. Re. Your price targets: do they factor in the potential for gold that you indicate at the end of your post?

[jonny flame] 06/11/2010 11:47

Hi Tarnow, excellent post!

[tarnow] 05/11/2010 18:06

Hi JF. I hope the price of copper doesn't go up so much in the next 6 to 12 months, as it will be of no use to us. As FND is producing very little copper at the moment. Still waiting for those blasted permits. From the latest quarterly report it might happen in December after the elections. I'm still confident we will get them though. Because if FND can't get approval for a brownfield expansion, then Indonesia is closed for mining business. So assuming we get permit this year (only 7 wks left). Then by Sept 2011 we will start stage 1 7000 tonnes. Then more fund raising and dilution :-(, to hit start 23,000 by Sept 2012. So a good copper price is only beneficial from mid 2012 onwards. Agree with you about Jambi. I think we might get to the target 300,000 ounce resource, as the drill results where much greater than any previous ones achieved. Then hopefully they could start a low cost demo plant for 20,000/30,000 ounces within two years (like wetar now), without requiring too many permits. ie approved on a local government level (much easier/quicker). This with a maximum 23000 run rate at wetar (copper 6 times current gold price) could give us 150,000+ gold equivalent (low cost) by end 2013/14. My price target is 30p with resource upgrade and more importantly permits. Longer term it is 100p. Less than Chips calculations, because we already have 270 million shares, and further dilution is highly likely, and secondly. Because I think a pe ratio of 9 is too high. As an aside re-read old report on minesite that had Tambang resource inferred 170,000 gold and 40 million ounce silver. Latest drill results were better than inferred! Its my belief that silver/gold ratio will continue to fall. And in a few years time Tambang could be 1 to 1.5 million gold ounce resource. The potential of finders ojolali project is huge. I agree JF we have 3-5 years of this bull run in precious metals left. So its vital that they get cracking. Come on Indonesia. Give us those permits!!!

[someuwin] 05/11/2010 14:08

Moving up a bit.

[jonny flame] 04/11/2010 13:39

...but don't take my word on it, as like I said I know zilch, so take someone elses :);



"Copper is red gold," said Jeremy Gray, global head of resources at Standard Chartered Plc in Hong Kong. Gray predicts the metal could rise by 50 percent to $12,000 a metric ton in the next six to 12 months. "We're on the verge of the biggest commodities bull market we have ever seen," he said.

China's consumption will almost double by the end of 2020 to account for 49 percent of world copper sales, according to CRU, a London-based mining and metals consulting firm.

[jonny flame] 04/11/2010 13:30

I actually think we could see Copper hitting 11,000 and maybe even 12,000 US $ a ton sometime during the end of 2011 beginning of 2012, but what do I know!



Copper Advances on Speculation Expanded Fed Stimulus to Stoke U.S. Growth

Copper has "one of the most constructive outlooks among the major commodities," Morgan Stanley analyst Hussein Allidina wrote in a report e-mailed today. "It is feasible copper prices could spike well above the 2008 record high."

[soulsauce] 28/10/2010 12:04

Cheers JF.

[jonny flame] 28/10/2010 12:03

Hi ss - yes, and looking forward to the Jambi gold resource update in Nov. Be happy when these permits are all signed off, I think this is holding the share price back. All in all though it's steady as she goes.
Best Regards,
JF

[soulsauce] 28/10/2010 11:38

JF are you still as upbeat here? I am.

[jonny flame] 28/10/2010 11:37

Permitting
Final documentation in support of the Mining Permit application is complete; issue of the permit has
been slower than estimated and possibly will be delayed further until after local elections which are
being held in November.
Initiatives regarding land status are being undertaken on three fronts: documentation of assets of
the former mining area in support of local government rights; progressing forestry permits to utilise
conversion forest areas; and the lodgement of a new spatial plan for Maluku, which pending
Ministerial approval will reclassify conversion forest in the project area to open ground.

[soulsauce] 28/10/2010 08:38

Nice report out including this bit:-

Ojolali Gold-Silver Project - highlights
* Tambang drill results show high grade gold and silver

* 7m @ 5.62 g/t Au and 70 g/t Ag from 55m depth in TBGR 29

* 13m @ 184 g/t Ag from 23m in TBGR 21 and 20m @ 128 g/t Ag from 52m in
TBGR19

* Jambi gold resource update due November 2010

* Metallurgy program underway to assess milling and heap leach potential

[sharegar778] 19/10/2010 11:34

Hi All

FND looks like great value to me, considering production should be starting in 2011 and the demonstration plant was a great success.
With the low production costs and great Cu price, it seems that if the next phase goes to plan then a 3 figure share price is very possible.
I am curious to why Boards regarding FND are so quiet, have I missed an obvious risk?

I also like RMM (which is more sensitive to Cu prices, maybe more risk, but potential returns seem quite like FND)

As for Gold I like the increasing production and great potential of VGM.

I am interested in companies that are nearing production or started production, but are still rather under rated.


Thanks
Sharegar.

[hectorp] 18/10/2010 10:49

copper.
Far East /China booming also due to increases in Q-E cash feeding from the West's Banks ( to what are hoped will be safer, growing, currency-hedged areas).
Q-E2 to come, $500 US Billion , the same may happen with that cash.
Witness only the rises in Fund valuations, eg Anthony Bolton's China special sits. Massive demand for raw materials in the East /BRIC etc is combined with rises in commodity values ( a reflection of currency weaknesses in the Western Economies).
So FND should do extremely well and so should her shareholders.
H.

[chipperfrd] 17/10/2010 15:04

SS,

More a 'look-up' than a working BB as the current JF thread is the main discussion area. But I do need to do an update here.

baht,

I have not tried to work out any numbers yet for the gold prospects as things are still at an early stage. But they are beginning to look quite attractive in my view.

Chip

[soulsauce] 17/10/2010 14:46

chip thanks for the new site ;-)

[jonny flame] 17/10/2010 14:22

Hi baht, hope all is well, really good to see GDP finally moving (although I don't hold any now). As always some very good questions, I think there are probably a few posters on here who could answer your questions better than me.
However my view is that, Ojolali, as I have stated previously is currently being attributed no value by the market, as such any positive news 'could' IMHO, have a significant impact on the share price The scoping study is due in Q42010. Yes I do think the management are giving Ojolali the focus it needs, hopefully the scoping study will show this. From what the management have said they see Ojolali as very much an integral part of Finders growth strategy. Personally I would be annoyed if they sold such an asset and did not develop it when we still have another 3-5 years of this gold/silver bull run left!

Have a listen to the below report (note that it's a little out of date now);

Finders Resources Limited (ASX: FND), Executive Chairman, Dr Russell Fountain provides an update on its demonstration plant, plans to increase production to 23,000 t p.a. and Ojolali in Sumatra.


"we see Ojolali as the firm growth path for the company".

[baht] 17/10/2010 13:25

JF What impact do you think the Gold prospects of FND will have on the share price and do you think it is being give sufficient priority by FND you do you think they could sell it off once having proved up the potential resource further to use the funds to continue to develope the copper thus reducing the amounts still required to bring the copper into full production?

[baht] 17/10/2010 13:08

Chipperfrd Do you have any thoughts (figures) as to possible impact of Gold licences on share price etc?