Mining Minerals & Metals Share Discussion Threads

[valentine] 11/7/2008 12:06

We need the DOW to revive..simple as that. I see one broker today selling their own shares for less than bid. Crazy. Indicative of uncertainty in the market. No one is buying anything much unless it is hot. GEX need to up the regulo control, and personally I'd like to see it a bit quick.
I think DOW will recover now. Capitulation temporarily over. The US still calls the shots.
OIL price is the problem...I could go on.
Get Hugh to quickly compose an RNS saying spectacular bonanza grades in a continuous line strecthing over 4kms with minimum 155 gpt and that should just about do it..well we might get 1-2p on the sp? No one cares anymore..we need the improvement in the DOW's fortunes ..simple as that.

[1waving] 11/7/2008 11:52

Stenick, Gold goes up, we go down. --- Volume nil, zero, blank, f. all.

The market makers continue to steal value from Glencar.
The term market maker is a contradiction on AIM, they do not make a market, just move price around to make money for themselves.

.

[stenick] 11/7/2008 11:20

Gold goes up, we go down.Wish I could get my hands on some cash!!!

[1waving] 10/7/2008 18:29

A question on the Uganda deal.

From the location map on the website there are 3 license areas but Glencar surrendered one. I think the licenses have also been chopped about/further bits surrendered.

Which license areas are in the farm-in with Grey Crown.

[bongo bwana] 09/7/2008 22:03

After the conclusion of the AGM a view was expressed by a man of considerable honour, that because of the spiraling price of gold combined with their dwindling gold reserves and failures to make new world class discoveries, the majors had revised their minimum criteria for establishing an economically/financially feasible mine.

The view was expressed with authority to a long standing Randgold shareholder that the threshold was most likely to be below 2m ounces.

Im using my calendar like Ive never used it before - its like a battlefield.

[1waving] 09/7/2008 21:49

yes, understand the points and think those estimates are practical with the earlier one being more questionable if any.
Establishing continuity, depth, width etc to the satisfaction of the JORC standards with SRK is very difficult to pre-judge. Will wait and see now.

Establishing a world class deposit takes time.

[bongo bwana] 09/7/2008 21:37

1Waving

You are held in high esteem here and IMO rightly so for the knowledge you bring to us all in your valued contributions.

I am concerned that your JORC guesstimate for later this year and 12months hence could lead to irrational expectations amongst "day trippers" in GEX.
Im not saying your wrong, in fact I suspect you are more likely to be within the ball park figures, but I DO want to avoid ANY sense of disappointment with the revised JORC when it is finally released. Remember, in true GEX fashion it will be CONSERVATIVELY estimated and any error made will be distinctly, on the side of caution.

Lets wait and see what Hugh Mc & the Mali boys bring back to the market in Sept/Oct. Dont be surprised to see the MM's play games with our GEX related emotions with the limited amount of stock available to them between now and then.

[deka1] 09/7/2008 20:48

hope your right wave

[1waving] 09/7/2008 19:16

deka1, 4m oz quite realistic, at present just over 500k oz, assume we get 2m oz in a couple of months, next drill season we have 4 rigs, only 1RC and 1RAB last drill season.

We know where the strikes are, KE+KW add along strike and at depth, Kama, Soloba and Badogo Malikili already known strikes with RC drilling ( plus RAB in the second two ). Gonka just RAB drilled but looks a very good strike.

Out and out resource drilling on those strikes next season.

New strikes will also be added.

Next season will bring a really major resource increase. 500k oz now to 2m oz in a couple of months, to 4m oz quite practical by Oct 2009.

.

[stenick] 09/7/2008 18:38

When the lab gets sorted we should have alot quicker assays.

[deka1] 09/7/2008 18:25

wave agree with all of your post but the last bit - 8 fold increase in 15 mths , might be a tad optimistic, but hope your right

[1waving] 09/7/2008 17:03

deka1, think that with the resource to be proved up in Glencar's licenses, Komana in particular, actually leaves GEX chronically undervalued. There is also a whole series of drill results to come from Komana East, Gonka, Soloba, Kama, Komana West and 3 targets on the Solona licence area.
Also a host of drill results outstanding from the 3 license areas with JV partner Gold Fields.

AIM is being hammered and manipulated by the market makers ( amongst others ) at present giving many stocks a hammering. Many market makers are not making a market in any sense of the word but simply abusing the system for themselves to make money. Illegal, criminal, almost certainly, but there is no policing and no regulation. Can see there being a backlash from this.

There will be a recovery from the current extremes, which in itself should be very powerful, it's a matter of when.

I would think Glencar will increase it's JORC Resource at least eightfold over the next fifteen months and be at the forefront of any sector recovery.

.

[pecker1] 09/7/2008 16:51

Yes, GEX have sufficient funds to last until midway through the next drilling season. By then, we will have a much enlarged JORC resource and we should have assays from the drilling done from November 08 to January 09, which could well have tested several of the newly discovered anomolies south of Komana. So the share price should be much higher by the time GEX has to do a fund-raising.

[deka1] 09/7/2008 16:35

Well wave we now know why MCR was driven down over the last month , a placing of 10mil@ 40 , back in blue now, had me worried for a while, this little beauty holding ok amid the mayhem, might see double figs in a couple of weeks

[1waving] 09/7/2008 14:26

or three !!!

[pecker1] 09/7/2008 14:25

deka,

Cos it's sitting on a goldmine (or two)!

[deka1] 09/7/2008 14:09

the vast majority of AIM is going down the pan at the mo, and my money with it, BUT this little co is sitting solid, cant figure, any one wana guess why

[haydock] 07/7/2008 09:53

Borrowed from CDN.
bodg - 6 Jul'08 - 13:25 - 10408 of 10442


The new mining boom
Created: 4 July 2008 Written by: Martin Li

2007 was another record year for transactions in the mining and metals sector according to a recent report by Ernst & Young (E&Y), and the appetite for sector consolidation shows no sign of abating. High commodity prices, a history of under-investment in exploration and development, the long lead time for bringing new projects on-stream and a wish by companies to diversify risk have led to a continued drive for growth. Furthermore, mid-scale miners have increasingly been looking to acquire defensive scale as they seek to avoid becoming takeover targets themselves.

UK, US and Canadian miners made the most acquisitions by value during 2007. They were also the most targeted countries for acquisition. Demand is now being driven from the east. China and India lack sufficient natural resources to maintain their current high growth rates, and are seeking greater and more secure access to raw materials. Deals made by China and India, and also Russia and Brazil (the BRIC countries), increased by over 1,200 per cent between 2000 and 2007, and the trend looks set to continue.

Continued growth through acquisitions

The E&Y report found that nearly all of the world's largest miners expect to grow through acquisition in the next two years. The report reflected the views of most of the top 40 global mining and metals groups, and reinforces the sector's confidence that the boom in metals prices will continue, as evidenced by strong recent company earnings.

Ninety-six per cent of respondents had grown through acquisition in the past two years and 87 per cent indicated they would continue to do so. Michael Lynch-Bell, global mining and metals transactions leader at E&Y, comments: "The appetite for further transactions is strong and the sector is cash-rich. Concerns about resource security are inspiring new acquirers."

The rate of consolidation could accelerate

The report found that the global downturn appears to be having little impact on the sector. While the cost of debt has soared, E&Y has yet to see delays in bankable transactions because of debt availability issues, as is starting to happen in other sectors. The report shows that nearly 60 per cent of all loans in the second half of 2007 were made to the mining sector.

Mr Lynch-Bell states further that the rate of consolidation is not only likely to continue but could accelerate in the short-to-medium term, "with the possibility of three $50bn (£25bn) plus deals before the end of the year". Longer term, the report sees the dominance of four or five diversified majors with strong representation in Russia and China.

Mining majors looking to expand, smaller groups seeking vertical integration, and new players – in particular from China, India and Russia – seeking to secure supply are increasing competition for assets and driving up prices. With a finite number of large projects available, majors are increasingly having to look at smaller projects offering expansion potential. Increased competition has also forced explorers to prospect in regions with higher political or operational risk. Whilst political risk is an important consideration, 43 per cent of miners surveyed stated that there were no regions which would be avoided.

Divestment is happening too. Eighty-one per cent of mining groups interviewed had divested assets during 2007 and E&Y expects to see further divestments through the rest of 2008 as companies continue to take advantage of high prices and discard non-core assets. Comments Mr Lynch-Bell: "This will be driven by the need to pay down acquisition debts, sell higher cost mines and in some cases make forced sales due to competition regulations."

Do acquisitions work?

Fifty-five per cent of respondents agreed that in most cases, acquisitions had increased their organisational capability; 68 per cent thought they had enhanced shareholder returns. The most important financial measurement of success for acquirers is return on investment.

Mr Lynch-Bell envisages the consolidation of junior miners to occur mainly by way of share exchanges, with cash being retained to fund project development. The resulting injection of good management and cash should improve the prospects of many struggling juniors.

Why has the consolidation of Aim miners not yet happened?

Despite the undoubted appetite for acquisition, the consolidation of junior miners on London's Alternative Investment Market (Aim) has yet to gather any sort of pace. E&Y's statistics show only four de-listings arising from takeover during the first quarter of 2008. A multitude of miners floated on Aim when capital was easier to raise. There now remain many companies of questionable quality. With financiers now much more discerning, companies running low of cash face intense competition for third party funding.

Incumbent management have been one obstacle to consolidation. Over-optimistic boards have dragged their heels over doing deals until their companies have reached death's door.

The crunch is coming

However, Mr Lynch-Bell sees the long-awaited consolidation of junior miners, particularly poor performers, to be finally close at hand. He quotes two statistics from the end of April 2008. First, 53 per cent of Aim mining shares were trading below their issue price. Second, 59 per cent of Aim miners had less than £5m in the bank (16 per cent had less than £1m). "The crunch is coming," he warns. "All the indicators suggest that consolidation has to happen."

TAKEOVER CANDIDATES

Driven by strong Asian demand, the commodities most likely to be targeted by acquirers seeking supply security are copper and iron ore. The rise in thermal and coking coal prices has also ignited interest in Aim's coal miners, where an ongoing squeeze on supply should continue to make them attractive targets.

The strongest candidates are companies with large, high-grade deposits of proven reserves. These assets could be attractive due to their quality or, more probably, because the likelihood of their successful development is currently constrained by limited management skills or insufficient funds.

[1waving] 06/7/2008 22:17

At present Glencar has a JORC of just over 500k oz which will move up in Oct to say 2m oz, with that likely to double at least to 4m oz by the same time next year. So however many ounces per million you 'own' now that would be increased eight fold by Oct 2009 from those figures.

Certainly puts into perspective the vast potential of Glencar.
Would also expect gold to be $1,200+ by then ( $1,200 may be conservative. ).

.

[serpicouk] 06/7/2008 21:05

1waving - I agree. Back in post 3125 I posted on comments made by Randgolds CEO on physical gold vs a gold company:

"Also, the CEO made an interesting point that investors seem happy to buy 1oz of gold from an EFT at $875, but seem to shun companies like Randgold where that same investment will net you 2oz with the prospect of that increasing as they increase their reserves and the additional benefit of a dividend. He did acknowledge operation/political risk as a slight factor for favoring EFTs."

Obviously with a junior we envisage the prospect of increasing their reserves to be greater than that of a major [in terms of percent].

[1waving] 06/7/2008 19:14

Had a discussion elsewhere and came up with an interesting way to look at a shareholding in a gold junior and the dynamics from a company building a very strong resource, such as Glencar.
Would be interested in observations/comments.

Comparing buying physical gold to a gold junior:--
Glencar has 270 million shares in issue with a current share price of just under 8.5p.
If you bought £1,000 at 8.5p ( plus cost/stamp duty on top ) you would have 11,760 shares which would give you the 'entitlement' to 43.5oz per million.

That may be something to consider to put at least a little leverage into play, as opposed to buying ounces of gold, need to pick the right stock/s also.

Has anyone come across this way of looking at the oz per million a shareholding may represent in a gold junior ?

Question asked by another poster
Isn't this basically market cap per oz, a number John Doodey from the Gold Stock Analyst is looking at?

Yes, initially, or very similar, but I was looking more at if you put £1,000 in a gold junior which has say a JORC of 1m oz and your £1k gets you 50oz per million, should the company increase the JORC to 5m oz then that £1k has bought you 250oz or 5 times the original amount.

So when your holding in ounces has gone up fivefold, it is entirely possible that the market cap per ounce has remained constant, or maybe only doubled. That is a major difference which demonstrates one angle on the leverage of a gold junior in development phase adding good resource ounces.

If the ounces are increased fivefold and the market cap per ounce doubles, you have made a physical tenfold gain. The main increase is through building ounces in this example, if the price of gold has a strong rise also, more power to the leverage.

An interesting way to look at the future potential of a gold junior ???
.

[1waving] 03/7/2008 19:02

From Jim Sinclair.
Dear Friends,

There are two subjects of extreme importance today.
I sent you an email months ago saying, ?This Is It.?

1. I am now telling you, ?It Is Now.?

Gold is preparing for an assault not on $1000, but for a brief penetration of $1200.
Violent chopping will occur, then off it goes to $1650.

This violent chop we have been living in here and now will resolve itself very soon and the take will be seen by history as having occurred in this last formation HERE AND NOW.

2. Where your juniors are concerned please give equal attention to the fundamentals before you make any decision. When beaten down, as they have been, think about gold at $1200 and $1650 coming sooner than anyone expected.

.

[bongo bwana] 02/7/2008 14:34

Excellent Serp.

I understand that GEX may also be examining the possibility of installing the current model of the Komana geology on the web site.

The two together would add significantly to our understanding of what exactly is happening there.

[serpicouk] 01/7/2008 20:30

I emailed GEX the other day regarding putting some of the airborne survey maps on the website.

Huge said they were still assessing the aeromag data but when they had completed that exercise they would consider putting some of the aeromag on the website.