Neptune Minerals Share Discussion Threads

[mjcrockett] 18/6/2007 08:14

Interesting to see Newmont buying in today at 36p. Quite a vote of confidence buying into NPM at this early stage.

MJ

[mattybuoy] 31/5/2007 12:46

Well, regardless of the merits of the warrants vs. the shares, what seems to have happened is that the market seems to finally have become aware of what Neptune is doing. Which is nice :)

Good points though Rapier and Ken.

[rapier686] 31/5/2007 09:55

Kermadec 07 is go!

Not exactly the timetable they laid out a few months ago, welcome to the exploration industry! Not sure I can bring myself to be too bothered though.

The important phrase seems to be "One objective of Kermadec '07 is the assessment of SMS deposits to a level that will permit Mining Licence applications to be lodged, a major step in adding significant value to the Company."

It certainly will if they pull it off!

On the warrant pricing - not sure I find the capital fulcrum point that enlightening.

You can do the Black Scholes thing and with a 6% interest rate, that's 10% implied vol - rather low, never mind the somewhat binary nature of this SMS explo/mining business.

My perspective is more - suppose I exercise - then I've borrowed 20p (32p-12p) for 3.5 years. I value the loan around 10% - so that's 8p of interest I've saved. I'm thus 3p ahead with the warrant before I've even considered the other aspect - optionality. If the shares crash and burn then the 'lenders' will be taking the hit not me. That's worth paying for - depending on the chance of a crash and burn. 5 pence I'd say. So I'd value the warrants around 18p with the shares at 32. This is a 50% implied vol (at 10% interest rate) - high but corresponding to my assessment we either hit it big or wipe out over the next 3.5 years.

Against that - the shares are eligable for business asset taper relief. I really don't know what the position is with a warrant you ultimately exercise into a business asset share. If anyone knows, please tell.

[jpdm fortunemaker] 31/5/2007 09:19

Topped up with 3080 @ 31.9 Traded at 9:17
JPDM

[mattybuoy] 30/5/2007 16:08

Woot! I am now sitting on a wafer-thin profit.

The premium of 5p remains ridiculously low for 3.5 years of time value, and the CFP is a mere 6.58%.

[mattybuoy] 30/5/2007 13:12

Well you can't have my warrants :)

It is a bit strange how both companies try and ignore the other's existence ...

[rapier686] 30/5/2007 12:56

And I've read the transcript (excellent that they provide one). He has a something of a standard spiel doesn't he, I wonder how many times a month he produces it.

I note:
Q. You're not alone in this sector - there's Neptune Mining who've also completed test drilling - how important is it to you to be first?

A. We certainly don't think we'll be alone for long - move into standard 'new industry' & 'peg all the ground' pitch. No wasting airtime on NPM!

Q. What about environmental concerns?

A. What they forget of course is that things like the dredging industry does 2bn tons a year off the sea floor, generally close to where people live

Which seems a rather good point to me.

I must put my hands up to the warrants markup - with the continued rise in the ords I thought it was time to swap virtually all my remaining ords into warrants.

[mattybuoy] 30/5/2007 12:39

OK I've watched it now. He's very impressive ...

[mattybuoy] 30/5/2007 12:20

There is a new video interview at with David Heydon. I can't give a link but you can go there and register free.

This site, which is new to me, looks like it is well plugged into the City. Perhaps this explains the mark up today? NUS is also in the same boat (lol).

[mattybuoy] 21/5/2007 21:09

David Heydon responds to the article in Science:

[mattybuoy] 21/5/2007 19:38

Upon re-visiting the website I notice that there is a lot more detail there now about ALL the license applications. Including maps.



Interesting stuff :)

[mattybuoy] 21/5/2007 16:19

Excellent points again. I had thought of the "convergence to an upwardly mobile target" myself, but if you start plugging in those sorts of numbers you start to get into ridiculous bagging factors.

Now, as I understand it the problem with Kermadec is that the slopes of the mountains are too steep for the SMS sediments to have accumulated there. Or at least that was the case in the places they looked before. Presumably this time they are looking in areas where the slopes are less steep.

Or maybe I have that all wrong. As you say we should find out relatively soon.

[mattybuoy] 21/5/2007 15:40

Here is a quick market cap comparison between NUS and NPM.

NUS: Fully diluted shares = 155.144m giving a market cap of US$668m or so.
NPM: Fully diluted shares = 94.900m giving a market cap of US$52m odd.

So ... Using a rather simple logic that assumes a best case scenario of NPM correcting upwards to NUS's valuation over the next 3 and a bit years, we have at least a potential ten bagger on our hands. Which, for the warrants would translate into at least a 25 bagger.

Note I said "best case scenario" ... Bearing in mind we don't have the TSX punters to push it along, and with all the things that could go wrong I don't actually expect a result like that. A five bagger on the warrants (equivalent to a market cap of US$140m) will do just fine ;)

N.B. Figures assume no further dilution.

[mattybuoy] 21/5/2007 14:32

"Sunrise" - you gotta love it. It really rings a bell for some reason. Possibly a TV program way back or something ...

Anyway, I just bought some more warrants for my sins :)

[mattybuoy] 21/5/2007 13:27

Thanks for the sterling work as usual Rapier. I'll have a look at it all later.

Note the large T trade that just went through. I think someone has been accumulating on the quiet for some time now.

[rapier686] 21/5/2007 10:37

Note for authors - don't include the "less than" sign in your text!

PS - following up one of the references (to a Jan 03 Science article), there are 3 sites mentioned. Two are of interest here...

In '97 Nautilus leased two active hydrothermal sites from gov.pg to evaluate for mining. Other sites presently considered promising include active volcanoes. Conical Seamount near the leased sites has a gold content comparable to that of a commercial deposit on the neighbouring island of Lihir and the Sunrise deposit in ... is under evaluation by the Japan Metal Mining Agency.

Another reference is to

2nd document "Managing Risks to Biodiversity... 2001" pages 195-204.

[mattybuoy] 20/5/2007 23:52

Yes let's hope this Kermadec produces better results than the last one.

I'm not worried about funding either. What does concern me a tad though is the environmental opposition which will inevitably arise. Indeed it looks like it's already started:

[rapier686] 20/5/2007 23:41

Granted that's a requirement Matt and it'll cost some dilution.

But I don't worry too much about their acheiving it, and even hold out some hope that a strategic partner will want the stake and tie up even more than Neptune need the funding.

Of course something promising emerging from Kermadec would help greatly and the passage of time has brought us to the projected late May conclusion of operations and approaching the preliminary results thereof anticipated in June.

With luck and a following wind then there could already be the odd tonne of SMS mineralisation in the bag!

[mattybuoy] 18/5/2007 16:00

Assuming they get cash from somewhere to actually take a look ...

[rapier686] 18/5/2007 11:59

Excellent.

So it's entirely plausible then that in a year's time Neptune could be making the same noises about Conical Seamount as Nautilus are now about Solwara.

[calmtrader] 17/5/2007 10:59

more good news this morning