Finders Resources Share Discussion Threads

[jonny flame] 26/8/2009 17:05

limit up,

Q) Where will the share price be next year? A) Wish I knew! What I would recommend is that you look very carefully at the DFS when it comes out, and look at the cash costs then look at where the price of copper maybe heading. I think the current valuation of FND is out of whack with the fundamentals. Look, if they are producing 23,000 tonnes of copper and selling it at US$ 5,500 dollars a tonne thats revenues of US$126.5m per annum. If I'm incorrect on this someone please tell me!!!

I have spoken to people about FND and in some cases their response has been 'yes but many companies are undervalued at present'. But what I'm looking at here is how fast future revenue streams will come on line and the profitability of the project. The DFS should hopefully make this clear.

Q) Are they easy to buy? A) Not sure what you mean by this, as easy as any other share.

Read what Jim Rodgers has to say about commodities and listen to his interviews, much can be learned here.

Best regards,
JF

[hectorp] 26/8/2009 11:42

J-F
There may well be a shortage in a couple of years . World copper demand is mooted to rise at least 5% a year until 2020. However there may be a downturn in the SHORT term.
Also, most of the very large proposed copper mines are in pretty dodgy territories, either difficult regimes in charge or difficult strike-prone workforces eg S-A, or wars in next door countries. This was brought to my attention yesterday. In simple terms, the 2010-14 'new mines' of the world may suffer from a greater than average of downtime.
As regards this company, I'm firmly invested in copper in other holdings eg Canada's ML ( see ML thread) I don't intend to increase my copper exposure at this time J-F, however thank you for the steer and I'll stick the company on watch anyway.

[cyprussteve] 25/8/2009 21:19

I realise the article below is a bit old, but, I think it gives an excellent summary as to my reasons for confidence in the profitability of the Wetar project.

Please note in particular the statement "The intention is to operate the demonstration plant for some 15 months, to produce 1900 tonnes of copper cathode at a cost of under $1 per lb"
Given that the current copper price is $2.85 per lb, and the project due to come into production next year, I am astonished that this share is still so undervalued.
Regards
Steve

[jonny flame] 23/8/2009 16:12

Yes Steve, since that report from the 1st June copper has moved from $4300 pt to....$6100 pt!

So currently the demo plant is creating revenues of around US $800,000 per month at a copper price of $6000. This revenue is generated on 5tpd, or around 136 tonnes per month.

When they will be in full production in 2010 they will be doing around 1900 tpm generating revenues of US $11.4m (6.9m GBP) per month with copper at $6000 pt. If the cash cost is say $2500 pt, then that's US $6.65m (4m GBP) profit, per month. No?

[cyprussteve] 23/8/2009 15:35

Hi Jonny,
Thanks for that.
Ref share price after the pending DFS, in the last brokers report from Finncap on June 1st it says : " Our valuation of the Wetar project, back in February, was 31p at a 0.75x NPV using a flat copper price of $3,300 per tonne. Since then, the copper price has increased by a third to $4.300 per tonne. Finders remains undervalued."
I think this at least gives us a steer as to what the share price may be after the DFS, with, I believe , a huge amount more when they actually go into production next year.
Regards
Steve

[jonny flame] 23/8/2009 15:14

Hi guys, feeling a bit rough as I had a bit of a drinking session last night :) Looking towards the DFS I have noted a few of my own views on what I 'think' we may see in it below. Be interested to hear people's views.

I wouldn't like to call the share price movement once the DFS is released, what I would say is that FND have always under promised, and so far over delivered (as CS has remarked) I think the DFS will come in showing that the mine will have a low cash cost thus generating excellent profits, that the mine life will have the 'future possibility' to be extended beyond 8yrs due to the third deposit (which has not yet been factored in) eventually adding to the resource base (see below 1 – anyone agree/disagree with this supposition?)

Additionally that the overall resource for the Wetar project will come in as very robust. Hopefully they will also announce that the demo plant can be quickly expanded which will increase revenue and profits and also that the acquisition of the Whim Creek plant will reduce cap ex (see below 2 & 3 – not sure why the Finn Cap not of the 19th Feb. is no longer on the company website) With the current high copper price there is certainly an incentive to expand the demo plant as quickly as possible

1) Third deposit - Meron

In addition there is a third deposit Meron, located 2 km from Kali
Kuning. This prospect has a potential size of 1mt @ 2.3% Cu
(Non-JORC compliant) based on historical drilling results from the
previous gold mining operation. Meron is not included in the current
Feasibility Study ('DFS') due to its lack of technical definition,
however, engineering plans do recognize the potential for later
additional leach ore from Meron and additional leaching space is
available in the DFS.

2) Option to Acquire Processing Plant 1st June 2009

Rob Thomson, Finders Director of Development said:

'The planned acquisition of the SX-EW plant is a major milestone in
the development of the Wetar Copper Project and adds robustness and
greater certainty to the project economics.
The purchase of a proven operational SX-EW plant reduces much of the
capital cost uncertainty and lead time uncertainty associated with
building a new plant.

It is anticipated that the acquisition of the SX-EW plant will
significantly reduce the overall capital cost of the project and the
quantum of this benefit will be determined as part of finalising the
feasibility study.'

3) Procurement of second hand SX-EW plant will reduce capex. We
have reduced our capex estimate for the main project to US$50 million as a
number of SX-EW plants from failed projects may shortly become available.
The bankable status of the feasibility study will depend on cost and operating

[cyprussteve] 22/8/2009 01:37

Hi g,
No worries - I have now deleted my email addy accordingly.
Ciao
Steve
PS - Quite an interesting read below.

[goldrush] 21/8/2009 22:10

CyprusSteve

Thanks for your kind offer and I will send you an e/mail later this evening.

g

[jonny flame] 21/8/2009 19:02

Thanks for that goldrush, I picked up 2,200 shares today but had to pay 22p.

Some rough FND calculations

- Approximate revenue; 23,000 tpa @ $6,000 a tonne = $138m

- Cash costs; We will shortly know the cash cost's in the upcoming DFS, but lets say $2,500 a tonne = $57.5m

- $138m – $57.5m = $80.5m profit before tax

As a rough calc does this make sense? I welcome anyone else's analysis.

[goldrush] 21/8/2009 10:57

Guys

Just to let you know that's my buy of 25k @20.5.....my broker had to negotiate hard and it took a long time.... guess what they put it on the screen right away.....obviously trying to pass it off as a sale.

Hope I bring some luck!!!!

P.S. JF CHL is off and running too.

[baht] 20/8/2009 09:38

Goldrush Good to have some more on board. Hopefully todays falls will help you with a poss entry price.

[jonny flame] 19/8/2009 07:12

Hello goldrush,

Hope you're keeping well; I'm in here for the long term and see the current small rise as just the start of what is to come in 2010/11. It's been 50p before and I think we will see it again come 2010; this share is one for the patient investor, it's not a trading stock, and it's a medium to long term hold.

Catch you on the CHL bb which I'm sure is also going to be another great long term hold.

Regards,
JF

[cyprussteve] 18/8/2009 19:49

Hi goldrush,
Yes - the spread is a concern, I agree - it used to bother me a lot also,
but, the potential is enormous, and, when the share becomes more liquid as the positive newsflow going into production continues, then the spread will narrow considerably.
It is also worth noting that you can usually buy and sell well within the spread, so the problem is not as big as it may initially appear.
I fully understand your reservation, but, I would have a little bet that in a few months time you will be making the same comment - "Unfortunately I have taken too long and the price has moved on a bit"
One of the things I like is that the management has an "under promise and over achieve" philosophy, which is reflected in the nice steady growth we have enjoyed for the last five months, with very little volatility.
This is important to me, as I like to be able to sleep at night :):)
Regards
Steve

[goldrush] 18/8/2009 19:32

Johnny F

Thanks for the mention of this on another board.

Unfortunately I have taken too long and the price has moved on a bit.The spread is what frightened me but looks a great company. Will keep this on my watch list and good luck to everyone here.

g

[cyprussteve] 18/8/2009 13:51

Interesting point, baht.
I confess that the whole difference between pricing on the Aus market and the UK market is totally beyond me -I have never really understood why the two are not mirrored - i.e. - if it closes 10% up in Aus, surely it should open 10% up in the UK , and vice versa. Clearly this is not the case,but,I have never unerstood why not, as surely the Company can only have one figure for market capitalisation, and there are the same number of total shares available for the Company, whether they are being traded in Aus or the UK.
For example, yesterday the share price closed up 9% here, but, it did not open 9% up in Aus.
I "think" the answer is something to do with the spread, which has always been large, and this is perhaps to accomodate the share price differential ?
Perhaps someone far more knowledgeable than I can answer - does anybody know a good broker or mm who could assist in explaining ?
Regards
Steve

[baht] 18/8/2009 13:36

Jonny what's your take on the share price over the last couple of days. Welcome rises but at mid 24.5p equals Au$0.49 yet only trading offer at 43c at present. Usually we are behind the Aus share price now well ahead. Doesn't make sense to me. Can't be peeps buying in the hope of the extra allocation of shares at 33c because you had to be an investor before 3 or 4 August (something like that).

[jonny flame] 18/8/2009 11:05

Indonesia operating copper miner Finders Resources (AIM: FND), which did not release any news or updates today, went against the market trends, climbing 9.3%.

[bobic] 17/8/2009 15:05

i have been following this bb and now bt 25000 at 26p.i think this will be
a history.Thanks Jhon well research.

[cyprussteve] 17/8/2009 14:04

This is now showing as 100% buy for short medium and long term on Barchart - please see link below.

Regards
Steve
Composite Indicator
Trend Spotter TM Buy
Short Term Indicators
7 Day Average Directional Indicator Buy
10 - 8 Day Moving Average Hilo Channel Buy
20 Day Moving Average vs Price Buy
20 - 50 Day MACD Oscillator Buy
20 Day Bollinger Bands Buy
Short Term Indicators Average: 100% - Buy
20-Day Average Volume - 17321
Medium Term Indicators
40 Day Commodity Channel Index Buy
50 Day Moving Average vs Price Buy
20 - 100 Day MACD Oscillator Buy
50 Day Parabolic Time/Price Buy
Medium Term Indicators Average: 100% - Buy
50-Day Average Volume - 51950
Long Term Indicators
60 Day Commodity Channel Index Buy
100 Day Moving Average vs Price Buy
50 - 100 Day MACD Oscillator Buy
Long Term Indicators Average: 100% - Buy
100-Day Average Volume - 45854
Overall Average: 100% - Buy

[baht] 17/8/2009 12:20

Following post 104 just seen an eMail in my selftrade account confirming entitlement on a 1:1 ration @ Au$0.33 per share.

So UK holders do benefit, makes a nice change.

[baht] 17/8/2009 12:10

Jonny I see from the MD's letter to shareholder (12 Aug 09) ref the EGM that they are also making a placing available at Au$0.33 up to Au$10,000 per shareholder. You had to be a registered shareholder as at 3rd Aug 09. I am assuming that this is only Aussie shareholders, have you heard anything?