Plastics Capital Share Discussion Threads

[mr ashley james] 29/7/2005 06:09

Tywocky,

Think ASX:PLA perfect for either the UK Insomniacs or Early Risers amongst us, you can basically trade ASX:PLA 10.00am EST NSW ie 1.00am GMT then return early doors and catch last hour trading or put advanced orders in up to 21.00 GMT via people like TD Waterhouse apparently if you do not have an Australian Broker lined up (for online Aussie Brokers refer earlier post).

This might represent a chance for the Pommies to have some fun or the Aussies and Kiwis here to play domestic markets.

3.00pm in Sydney/6.00am GMT and we have a very well defined Bullish Cup and Handle formation building on ASX:PLA.





Remember PLA:ASX has come down over the last three to five year bear RSA JSE Market with Rand increasing value environment, Rand Metal Commodity Price Weakening Environment, especially Palladium Weak Environment, into the recent key November 2004 Rand Gold Price Reversal point, and with your smaller market caps like ASX:PLA there is a lag between this reversal point in sentiment feeding down into the smaller capitalisation stocks.

It strikes me ASX:PLA have used this time in order to develope their projects, as opposed to heavily promoting the story until they are ready.

Thought I would get up early and review volumes towards ASX Close which seem pretty light so far today.

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[mr ashley james] 28/7/2005 14:37

Tywocky,

Yes I agree allegedly John Lewins has put Four Mines into production before, also the close tie up with Lonmin Plc LSE:LMI who previously held 31.00% of ASX:PLA and are in a 50%/50% JV on the Panton Process tends to give the professional seal of approval behind their both Geological prowess under Peter Allchurch and Mining Engineering/Metallurgical skills to put mines into production under John Lewins.

I very much like the fact Peter Allchurch bought 1,000,000 shares recently at AU$0.13 in addition, it showed Director confidence in their projects.

The curved ball is obviously Panton, a 100% owned PGM Measured and Indicated Resource in Australia which if it were in RSA would be in production but currently awaits revised feasibility Open Cut and Underground, presumably concentrating on high grade zone.

Now it is possible IRR today say just 10% to 15% would push this well through my 30% cut off in the event the Palladium Price keeps on increasing.

My call has always been Chinese Palladium Jewellry Sales and the lack of any USA/Russian or Swiss Bank Stock overhang is key here.

If as I expect Chinese Palladium Jewellry demand doubles to 1,200,000 troy ounces in 2005 or not far off 20% of Global Palladium Demand we are on a winner,afterall where else better to supply Chinese Jewellry Demand than a mine in Northern Territories, Australia just North Of Halls Creek?

I very much like the look of this play, let us see whether my optimism is rewarded, but if it is the Upside potential could be very considerable indeed.

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[knowing] 28/7/2005 14:16

Tywocky

What broker do you use ?

[tywocky] 28/7/2005 14:10

Hi Ash
Bought these as excited by the size and economics of the Kalplats project with the Panton deposit as a bonus once Palladium prices recover to reasonable levels.
With two resourced deposits and two outstanding exploration projects the share is a steal at 15c as its capitalization is less than many exploration companies. I also like to have a competent and experienced mining engineer as ceo.
Regards
Tywocky

[tywocky] 28/7/2005 14:08

Hi Ash
Bought these as excited by the size and economics of the Kalplats project with the Panton deposit as a bonus once Palladium prices recover to reasonable levels.
With two resourced deposits and two outstanding exploration projects the share is a steal at 15c as its capitalization is less than many exploration companies. I also like to have a competent and experienced mining engineer as ceo.
Regards
Tywocky

[mr ashley james] 27/7/2005 23:57

Thanks TK,

Looks like ASX:PLA going to break AU$0.16 tonight on back of PGM Prices I think.

TSE:AEN Looking good no complaints everything going as expected.

Hope my links were of use.

Cheers

Ash:)

[knowing] 27/7/2005 18:39

Thanks for the information Ashley.

Good Luck

[mr ashley james] 27/7/2005 05:50

Smokey Hills might be closer to a producing mine than I had anticipated:-

[mr ashley james] 27/7/2005 04:38

Wendy,

This has been a consistant 2005 Bug Bear of perception between us, with reference to for example Thistle Mining Inc eg Steyn Mine RSA, so let's deal with accurately trying to explain my perception of quite why I am so bullish Rand Commodities:-



OK It is difficult to deal with a complex Basket PGM Price based on 6 Platinum Group Metals of differing elements at varying commodity prices at any given stage, I however find Gold in local Rand Terms a reasonable indicator:-

Ten Year Chart as Follows:-



My Macro Wave I is roughly Rand R1,375.00 to R3,482.50, that tells me likely next Wave III minimum move is to R4,785.50 Gold IMO.

This implies a massive JSE Rand Commodity boom.

The key Barrier to entry and Rarity Metal, ie key FOREX Earner is really PGMs, which should be exponential logically with Platinum 80 times rarer than Gold on common sense supply and demand economics.

Bluntly all of a sudden billions of pounds floods in to RSA PGM Mining with very few quality homes for investor cash.

Roughly the same happens in another US Dollar Counter Party Currency the Aussie Dollar.

The Rand and Aussie Dollar devalues the Rand and Aussie Dollar Commodity price increases, because you need more of the local currency to buy an ounce of something worth having, ie real money precious metals.

You get an exponential boom.

So what happens to a Company like ASX:PLA Shareprices massively geared to increased profitability on reducing local operating costs in hard currency terms, massively increasing revenues in local currency terms?

Investor Sentiment sees increased profitability massively disproportionally geared on a Bell Curve to the Commodity/Currency Divergence, as operating margins mushroom exponentially.

Suddenly the net profit margin and therefore Price Earnings Ratio (PER) and Price Earnings Growth (PEG) Factor come in to play and investors are prepared to pay multiples of net profit and future earnings growth per share for the increase in profits.

From the Bear is produced a Raging Bull as mining investors exit Dollar Commodity areas, North American Producers and US$ Tied Economy Producers and stocks and move money into emerging high rate of return undervalued bull markets in the search for profit and capital growth.

So all non USA/Canada Sector Mining Stocks go up normally for say three years potentially as the Traders Short USA/Canada and Long RSA, Australia etc

All IMHO, NAG, DYOR etc etc

Cheers

Ash:)

[mr ashley james] 27/7/2005 02:46

The Knowing,

I have found this set of links to denominate brokers trading online Equities in Australia:-



Out of interest my Chart Eliott Wave Read on Palladium assuming a Wave A and B Pullbacks are already complete is that the next move once the inverted head and shoulders read indicates around US$25 neckline move north to around US$210 next step.

Think now is the time to be in Palladium personally.



All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[knowing] 26/7/2005 17:45

Very interested in having a dabble on this one myself. Can anyone suggest a good broker who deals in the ASX please.

Knowing

[pecker1] 25/7/2005 10:30

Ash,

I found this interesting enough to take an initial stake last week. Good to be able to buy at the same price as the Chairman.

Palladium has been in dire straights for so long that a recovery could well be in prospect. As you say, China's demand for palladium jewellry is growing fast (as a substitute for high-priced platinum) and it is an ingredient of white gold which is also growing in popularity there.

Would be interested in meeting the management over here before committing further funds - someone mentioned August?

[mr ashley james] 22/7/2005 17:15

Wendy,

Nota Bene Panton Basket PGE ie Pt, Pd plus Au grade on top reef in the event of selective mining of high grade 10,100,000 metric tonnes at Pt 2.50g/t Pd 2.90 g/t, Au 0.40g/t ignoring substantial Base Metal Credits from Ni and Cu is currently:-

US$71.54 Pt per Mt Ore
US$17.99 Pd per Mt Ore
US$13.63 Au per Mt Ore

US$103.16 per Metric Tonne PGE plus Base Metals at PGE Grade 5.80g/t on 10,100,000 Mt ie 58,580,000 grammes or 1,883,389 troy ounces.

Meaning that I am pretty sure your perception Panton is not Economically Viable at current PGM Prices is entirely incorrect.

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[mr ashley james] 22/7/2005 16:58

HectorP,

Bushveld Basket PGM Price today is roughly:-

Pt 100/165 x US$ 890=US$539.39
Pd 50/165 x US$ 193=US$ 58.48
Rh 15/165 x US$1,950=US$177.27

Average PGM Basket
Price ex Au =US$775.14 Per Toz PGM

Going consistantly up recently.

ASX:PLA up 8.00% at AU$0.13/AU$0.135 on reasonable OBV 930,497 last night.

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[mr ashley james] 22/7/2005 01:51

ecoejh,

ROE Per AU$2.292=£1.00

IE From what I hear buyers of say 250,000 shares are paying AU$0.14 Offer ie 6.108 pence.

Peter Allchurch the PLA Chairman bought 1,000,000 shares at AU$0.13 ie AU$130,000 recently so it does not seem such a rip off IMO.

Cheers

Ash:)

[ecoejh] 22/7/2005 01:29

AJ

I am lazy

what does the aus = in £ sp

thanks

eco

[mr ashley james] 22/7/2005 01:11

Hector,

BTW Anglo Pacific allegedly and New Smith Capital Partners Limited took 30% and 15% each respectfully of that last placing of 25,000,000 units at AU$0.11.

Cheers

Ash:)

[mr ashley james] 22/7/2005 00:09

Hector,

Yes they are in London next month so if you want to meet them I am organising to do so.

Actually think this is one of the more interesting Development plays I have seen in the last four years.

It strikes me they have the management team to deliver, the general word on the Street is pretty positive.

Building a position slowly currently only at 25% of my targetted position, need to go through nitty gritty before I build further.

Both RSA Projects easily beat my cut off 30% Internal Rate Of Return minimum even at previous PGM Prices and Basket Prices per mine, if recent rises continue I personally will consider these projects very attractive indeed.

On a negative note Nota Bene Black Economic Empowerment Legislation in RSA is going to mean at least 26% of both Smokey Hills and Kalplats will not be attributable to PLA I point out!

Still need to go through attributable Resources and Projected Production figures.

Personally think if Palladium goes through US$350 we could be on a real winner with Panton.

Cheers

Ash:)

[hectorp] 22/7/2005 00:01

A very interesting PGM play Ashley, I'm starting to do the homework and also studying your notes here.
I might buy a few £K 's worth to tuck away. Could be good currency play too.
H.

[mr ashley james] 21/7/2005 23:48

Tywocky,

I have got this sneaking feeling I am going to right about PGM Prices the last few weeks Platinum has gone up to more than US$29 to US$884 and Palladium US$35 to US$195.





The key element here is Palladium for PLA especially in relation to Panton.

Anyway the percentage increases make for far more interesting reading than Gold IMO.

Cheers

Ash:)

[mr ashley james] 19/7/2005 03:13

Wendy,

I have not worked out my price target on ASX:PLA in three years time but my gut feeling is it is AU$5.00 plus.

Aquarius Platinum Limited went from AU$0.20 to AU$10.20 in roughly three years or less indeed Messina Limited JSE:MES or Southern Era Resources Limited TSE:SUF between 889% and 1600% inside 18 months.

I am possibly predicting a 4,000% return on Equity on ASX:PLA inside 36 months more numbers to do but it is currently looking that way IMHO

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[mr ashley james] 18/7/2005 16:42

Wendy,

Interesting that the professional traders and Commercials seem to have caught on to the Palladium story and seem to be shorting out the stops before reversing long Pd is down US$11 at US$171 so looks like they are hammering out a bottom today probably.

I have been going through the probable Equity Dilution on ASX:PLA and it looks like they will need to raise roughly AU$10,900,000 in next twelve months at a guess to finance the following:-

Smokey Hills

Smokey Hills Bankable Feasibility Study AU$5,000,000
To Aquire 74.00% of Geoplats Resources (GPL)
80.00% via Limpopo Development Corporation (LIMDEV)AU$3,400,000

Kalplats

Pre Feasibility Study AU$2,500,000
Bankable Feasibility Study AU$5,000,000

It looks like ASX:PLA need to raise at least a total of AU$10,900,000 Equity Capital prior to approaching Standard Bank etc to arrange the Project Finance on the various projects to put them into production.

It strikes me we are roughly at the same stage Bill Trew was when he took over Oxus Mining Plc and he and Alisdair Stuart brought the Amantaytau mine into production back in 2002.

It strikes me buying ASX:PLA at 5.00p approx say AU$0.1250 is possibly a similar opportunity to buying Oxus Gold Plc AIM LSE:OXS at 5.00p in 2002

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[mr ashley james] 17/7/2005 22:04

Wendy,

Thirdly Smokey Hills project, Eastern Limb Bushveldt, RSA Stand Alone 100% Basis:-

SMOKEY HILLS

With Smokey Ridge which is Eastern Limb of the Bushveldt I am going to need to average down the grade of 8.74 grammes per tonne over 0.72 metres over the height of a man ie mineable minimum stope height for a man plus a drill as standard practice in RSA Merensky and UG2 Reefs.

Hence the required mining grade will be diluted roughly as follows 0.72m/1.60m x 8.74 g/t for the Underground part of the Reserves net of Ore Dilution I come to 3.933 g/t which at roughly an average Bushveldt US$24.47 per gramme PGM basket price or US$761.06 per toz is still IMHO going to be Economically viable being US$96.24 per Metric Tonne of Contained PGMS.

I accept the 7 PGE Grade ie Pt, Pd, Rh, Ir, Os, Ru, + Au is 10.41g/t which means averaged down grade here would be 4.6845g/t being 0.72m/1.60m ie 45% x 10.41g/t

My underground Cut Off is around US$75 per Metric Tonne, my open pit I use US$30 per metric tonne, even though I am well aware that 1 g/t Au can work which in theory is US$13.50 per metric tonne at scale, I wont touch projects below 200% of minimums I want my investments to be as far as possible management proof.

I can not off hand see a Measured And Indicated Resource Summary on the presentation, what I can see is the statements that they expect a 15 year mine life at maximum output of 150,000 toz pa, assuming 90% of Ore can be Recovered and Recoveries of 80% of Metal from concentrate I would expect 72.00% of contained Metal Recoverable hence I believe given the consistancy of the UG2 and Merensky Reefs in RSA, I think PLA believe they have 100%/72% of 150,000 toz pa x 15 years in Resources which would equate to 3,125,000 troy ounces of PGMs presumably that they can infill drill up to the required JORC standards.

They talk about Open Pit again followed by Underground Mining it seems very reminiscent of Kroondal Platinum Mines Limited JSE:KPM as was.

It seems they are looking at 7 years openpit at 90,000 toz pa assuming 72% recoveries again I think they must be looking at a Open Pitable Resource of 100%/72% x 90,000 toz pa x 7 years, say 875,000 toz.

The Underground Mining portion looks like 8 years with production ramped up to 150,000 toz pa, meaning 100%/72% x 150,000 toz pa x 8 years, say 1,666,667 troy ounces worst case.

So it seems absolute minimum Smokey Hills contains is going to be 2,541,667 toz PGM perhaps up to 3,125,000 toz PGM.

I would value a 90-150,000 toz pa PGM Producer at US$270,000,000 to US$450,000,000 using US$3,000 per annual troy ounce of production.

I would value a minimum 2,541,667 toz and 3,125,000 toz maximum Measured PGM Resource minimum using US$761.06 per toz basket PGM Price as follows:-

Total in Situ PGE US$1,934,360,833 Assumed Minimum
Total in Situ PGE US$2,378,312,500 Assumed Maximum

Development Valuation Average 11.40%=US$220,517,135 minimum assumed
Development Valuation Average 11.40%=US$271,127,625 maximum assumed

Potential Average Upside if Producing Mine 20.80%=US$402,347,053 minimum assumed
Potential Average Upside if Producing Mine 20.80%=US$494,689,000 maximum assumed

Producing Mine Valuation alternative US$3,000 per annual troy ounce of production=90,000 toz pa ramped up to 150,000toz pa

At 90,000toz pa US$270,000,000 increases to 150,000 toz pa US$450,000,000

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[mr ashley james] 17/7/2005 18:18

Wendy,

Next up Smokey Hills after enjoying ten minutes of Sunshine.

For open pit RSA PGM study the early stages of mining at Kroondal Platinum Limited JSE:KPM now Aquarius Platinum (South Africa) Limited JSE:AQP refer

From memory their orebody slopes at 16 degrees whereas as far as I can see both Panton and Kalplats are vertical 90 degree orebodies ie the perfect angle for mining both openpit and underground later below say 150 to 250 metres depending on required strip ratios.

Both Orebodies Outcrop at surface as well (Kalplats with an overburden).

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)