Mineral Sec Share Discussion Threads

[bionicdog] 03/9/2007 15:03

To calculate discount to NAV , you need to divide the discount by the NAV not the share price.
ie at 91p 28/91 =30.8%
at 117p 54/91 =59.3%
at 110p 47/91 =51.6%
The way you are doing it , you could end up with a discount greater than 100%.

[utwiq] 03/9/2007 14:41

Happy to oblige!

First (crucial) point: there are effectively 147m shares outstanding, the larger figure bandied about includes several million shares in MSX that were owned by SCRB's various subsidiaries, so they are really now just treasury shares

Second point: the tax breakdown is based on MSX's old figures (they gave very comprehensive NAV calculations, including cost of purchase and tax liability; note that our tax liability on Platmin is, for some legal reason of which I am not aware, much more limited than one might otherwise think). I assume the same tax position carries across to MXX. It might not, although I'd be astounded were that the case (using MSX as the merger vehicle might have been driven with this in mind?). There may be tax advantages from SCRB merging into MSX, as I expect it had fairly large tax losses (given the history of its component investees...), but that is all speculation on my part. Suffice to say that unrealised gains on the old MSX investment portfolio are £71.2m, over half of which is the unrealised gain on Platmin (specifically £41.5m) only 85% of which is taxable, thus making for taxable unrealised gain of £35.96m, which at 30% tax makes for a tax charge of £10.79m. I suggest reading the MSX Feb 07 report...

Third point: the current portfolio

Cash 16.50£m
Debt -5.26£m
Platmin (PPN) 57.11£m at £3.75
Copperco (CUO) 34.12£m at A$0.92
Tianshan (TGF) 13.71£m at A$0.47
Mineral sands 3.99£m at A$0.14
Buka Gold (BKG) 3.82£m at A$0.28
Herencia (HER) 2.75£m at £0.015
Iluka (ILU) 2.09£m at A$5.55
Zambezi (ZRL) 2.08£m at £0.21
Desire (DES) 1.57£m at £0.30
Other listed 1.13£m (as at 31 Dec 06)

Unlisted:
NiPlats Australia
Minsec Smallcap Fund
Chaarat Gold 3.47£m
Sappe 10.00£m (NPV: 44.6£m)
Lady Loretta 20.00£m (NPV: 167.0£m)
Vostok 5.00£m
ROC Oil Collaboration
Zarmita

NB: I haven't attached any value to the unlisted investments apart from Chaarat, Sappe, Lady Loretta and Vostok. The first of those is our investment at cost; the latter three are my stipulative assignment of value. The NPV for Sappe I worked out myself - on the basis of the Feb 06 figures - mine life of five years, opex $179/oz, capex of $68m, 100koz/annum production. The Lady Loretta NPV is worked out by Snowden Consultants in the big merger document (250pp or so!) posted by MSX and SCRB earlier in the year - April or May I think. It is based on zinc prices at around $1.30 or so, which is fairly high. There is another figure, however, based on much lower prices, where the NPV is still very healthy, and there is another that is higher still (if Xstrata uses its Mt Isa facility to process the ore).

Fourth point: Iluka details were (and maybe still are?) available on the SCRB website and in the merger document. It works out, I think, as an effective 0.4% interest in ILU (8% of a consortium which itself holds 5% or some such?).

Fifth point: valuation per share, etc.

Liquid assets 133.62£m
90.88p/share
44.26% discount

Assets(gross) 172.09£m
117.04p/share
85.79% discount

Assets (net) 161.30£m
109.71p/share
74.14% discount

[clearsoup] 03/9/2007 13:13

40% + on conversion.
Utwig. I agree NAV approx £1, but appreciate clarification as to how you get 'net of tax' figures. Also, do you have figures to hand for an independent valuation eg in the merger agreement for unquoted assets (Lady Loretta and Sappes in particular)? I don't suppose anyone knows the story regarding Iluka: supposed to be a quoted investment, but MXX website does not give a % shareholding.

[pillion] 03/9/2007 12:55

Every little helps -- we hold 20% +

[djalan] 31/8/2007 13:43

Ambrian was GOL -
Golden Prospect, for a long time it was trading at a huge discount to NAV

We know the feeling
imho it could be ages before MXX comes up trumps

still holding
jal

[utwiq] 31/8/2007 13:36

Sure, take a look at Ambrian Capital and Cambrian Mining. In Canada, Endeavour Mining Capital is a serious player. I looked at Ambrian seriously, it is appealing but not especially cheap. I was in Cambrian for a long time, and I like it a lot, but its major investee (Western Canadian Coal) has been having trouble controlling costs and the discount to NAV for Cambrian slumped from +60% to about 25% at which stage I sold and bought more MXX! This is the best value I've found.

[robbie81] 31/8/2007 13:12

Has anyone got a list (or idea) of other companies listed on AIM (or indeed ASX or LSE proper) doing a similar type of thing to MXX? I.e trying to find finance for smaller projects/companies whilst carrying investments with or without direct projects themselves. I just wonder whether we can make a comparison to investigate the overall sentiment of the market for these type of companies, especially given the rise in private equity investment in the mining sector.

[djalan] 31/8/2007 12:27

Our 2.3% investment in DES is now worth £1.8 m

[utwiq] 31/8/2007 10:37

Note that our major investment (Platmin, PPN) has moved ahead yesterday and today (to £3.775 when last I looked...), which makes it worth £57.5m to us, as against our very modest MCap of £92.6m. So, with PPN at this level I make the discount to post-tax NAV to be 74.05% (109.65p/share). And again this is with Sappes, Lady Lorreta, and Vostok all given very modest valuation (£10m, £20m, £5m).

[whealan] 30/8/2007 17:57

utwiq
Unfortunately my boots are already full enough of Mineral Securities shares. It will be interesting to see however what my Jan '08 options are worth when conversion time comes. They of course have fallen in value exponentially. At least exercising them is likely to have an averaging effect!

[utwiq] 30/8/2007 17:29

whealan, you have to be right! I make the discount to NAV net of tax, 69.84%, which is to say 107p/share. And my calculation assumes that Sappe is worth £10m, Lady Loretta £20m and Vostok £5m. Plenty of upside in those direct projects given that I make NPV for Sappe to be £44.6m, and the recent professional (Apr 07) NPV calculation for our net interest in Lady Loretta was £167.5m. I'm usually very mixed on share buybacks but this is one situation in which the cheapest investment available to management (developing Loretta and Sappes aside) is MXX stock. Happily this sort of situation doesn't tend to last.

[whealan] 30/8/2007 17:23

Minsec shares seem for the moment to have lost any correlation with their underlying investments.

[pillion] 30/8/2007 10:21

Buka Gold Ltd (ASX:BKG) today announced further assay results had
confirmed recently discovered gold and silver mineralisation at Mt
Scotchy extended over at least a kilometre.


Average grades across the full kilometre are similar to those
across the initial 300m at 6.8g/t gold, 123g/t silver and 2.8pc lead,
with elevated iron, manganese and sulphur reported in some of the latest
samples.

A further 200m of potential strike length has yet to be assayed.
Executive chairman Mr David Hillier said, "It is always pleasing
to confirm significant extensions to a virgin discovery.

"Whilst assay results from trench sampling are some weeks away

it is clear that we are on top of a substantial system that appears to
be extensively mineralised."

More than 250 channel samples from nearly half a kilometre of
trenching have been despatched for assay with results due in about a
month.
The torrential rain in the area last week has had minimal impact
on field work, though confirmation of the availability of an RC drill
rig has taken longer than expected.

Current indications are that drilling will commence in four to
eight weeks.
"Discovery is a frustratingly slow process but the team
continues to demonstrate that a methodical approach yields dividends.

"Follow-up soil sampling over a wide area of identified
anomalies on this, the first of seven targets on the tenement, will keep
the team extremely busy until drilling can commence," Mr Hillier added.

Shares in Buka Gold rose 5.5c to 27.5c this morning

[pillion] 30/8/2007 09:09

Buka Gold up 34% overnight in Oz -- MXX hold 58%

[bionicdog] 21/8/2007 16:39

No , it's me.

[djalan] 21/8/2007 12:50

Dog -- is this your brother ?

[bionicdog] 21/8/2007 12:47

Bought another 10k to celebrate ....... no , not really.

[djalan] 21/8/2007 12:36

Lucky Dog

You got post 100

[bionicdog] 21/8/2007 12:20

Djal
We should have gone with this one. Of course the answer to the question is "no".

bionicdog - 20 Jul'07 - 10:51 - 745 of 746 edit

The name doesn't really lend itself to humour.
How about "The years and the tears , will Bionic ever get his money back?".

[djalan] 20/8/2007 16:52

About time too !!
up 1p

witteklip -- you win the comp -- we owe you £1K each -- well done

Are things on the up ???

[pillion] 20/8/2007 14:35

Rob
Aye first ever.............

.........will it hold on ?

[robbie81] 20/8/2007 14:04

utwiq - thanks, that explains it.

One month old, but at least we got a tick up.

[pillion] 20/8/2007 09:51

One month old today

[utwiq] 17/8/2007 19:41

robbie, you have misunderstood - it is just the old MSX and SCRB shares being relisted as new MXX - no dilution has occured, massive discount to NAV still