Plastics Capital Share Discussion Threads

[mr ashley james] 09/9/2005 11:40

Yikyak,

Don't you just love tight ASX spreads AU$0.155 AU$0.16 closed up 10.30%?

Cheers

Ash:)

[mr ashley james] 09/9/2005 01:53

Yikyak,

OK trouble at mill, according to ADVFN 20.70% up at AU$0.175

[mr ashley james] 08/9/2005 17:58

Yikyak,

Yes you are correct, just checked with ASX website:-



Closing prices
Closing prices are displayed for the last 5 days on which the security traded on ASX within the last 6 months.

Date Last % Change High Low Vol *
08 Sep 2005 0.160 10.34% 0.165 0.145 2,488,699
07 Sep 2005 0.145 11.54% 0.145 0.135 1,012,695
06 Sep 2005 0.130 0% 0.130 0.130 13,000
05 Sep 2005 0.130 4% 0.135 0.130 213,900
02 Sep 2005 0.125 4.17% 0.125 0.125 69,400


It looks to me as though AU$0.18 is on the cards this evening ie on Friday Sydney Opening.

All IMHO, NAG, DYOR etc

Cheers

Ash:)

[yikyak] 08/9/2005 13:54

10%, I think ADVFN percentages are screwed on ASX stocks, half of the time ASX stocks fail to even register on my portfolio.



Huge volume toboot. :-)

[mr ashley james] 08/9/2005 10:54

YikYak,

Up 23.10% on 2,488,699 OBV

Cheers

Ash:)

[mr ashley james] 07/9/2005 12:04

Yikyak,

Yes it was up 11.50% or AU$0.015 in Sydney yesterday on 1,015,695 OBV

Cheers

Ash:)

[yikyak] 07/9/2005 09:00

Rising price on three times average volume, starting to show some signs of life.

[mr ashley james] 07/9/2005 02:23

Exactly, now ASX:PLA take a look!

Cheers

Ash:)

[yikyak] 06/9/2005 09:08

Nice post Ash - like the saying 'behind every tip is a tap', so true.

[mr ashley james] 05/9/2005 23:33

NTV,

No I would prefer not to people seem to think investing is all about ramping or pumping and dumping stocks to retail investors, instead of intrinsic value, management teams, grade, Reserve and Resource Base, Internal Rate Of Return, ADVFN is full of insiders ramping to the retail player, I prefer to use BBs for my research and analysis, but quite frankly the least promoted stocks have over the last six years done the best.

Which is interesting for example I set up a thread on Norilsk Nickel GMKN/NKEL in 2000, noone else pretty much posted on it, it went from US$0.50 in October 1998 to US$80.55 in April 2004 ie a 161.10 bagger.

I set up a thread on First Quantum Minerals Limited TSE:FM AIM:FQM it went from a low of CS$0.20 in roughly December 1998 to C$27.44 in July 2005 a 137.44 Bagger.

The thread was hardly posted upon.

I am beginning to think BB Promotion is dangerous for one's financial health.

I have posted my views on LSE:JLP and the normal suspects got upset, but let us put it this way why pay 15 x cash per April 2005 for an early stage MINEX Stock that is probably three or four years drilling away from Measured and Indicated Resources let alone Proven and Probable Reserves, where there is currently no mining infrastructure to Refine or treat Platinum Group Metals or Smelting facilities for Nickel in Madagascar anyway?

To be fair the grades were OK if open pitable, albeit I love the way four drill cores had been subdivided into each separate sample and every single sample result put out to make the data appear significant, but the depth of intersections from 72.80 metres to below 100 metres meant to me a lot of overburden to be cleared if it were economically viable to do so.

I doubt it is personally I think the strip ratio will kill it dead and I am not sure if it is economically viable as an underground mine at those grades for a Polymetallic deposit with low secondary recoveries where typically you only manage to mine 80% of the grade, and then seldom recover more than 90% of the Primary Metal, the secondary metals in multiple recovery circuits eg Nickel/PGM and Copper will mean the secondary bi product metals normally become very low recoveries so I discount them.

Re Polymetallic Deposits refer Cambridge Mineral Resources Plc LSE:CMR Lac Polymatos.

I avoid stocks that report "XYZ Metal Equivalent Grades", it is normally deliberately to fool the mug investor to compare a Polymetallic Deposit with a Pure Primary metal grade, 2.60% Pure Copper is OK Underground normally, although I expect 4% to in some instances for example in Congo 16% ref Anvil Copper Limited ASX:AVL, but this is missleading neither 3.83 g/t PGE nor 0.22% Ni underground will normally work Underground IMO any way,unless it outcrops at surface and can be mined Open Pit initially to repay CAPEX quickly to go underground after initial project finance already covered and repaid, Copper Grade 0.11% is irrelevant because it is not worth recovering anyway IMHO.

Anyway I use a primary metal value underground around 7.50 g/t Gold Equivalent at a US$300 Gold Price minimum Underground, so here when you see things like "MAJOR NEW DISCOVERY" I automatically get suspicious, good projects speak for themselves, and good jockeys do not ride their horses if valuable into the Ground, anyway I do not think the Primary Metal Value will exceed my cut off average underground, ie I doubt they will average clear of my US$75 to US$100 per metric tonne of ore of contained metal let alone recoverable metal value IMO.

Transportation of Concentrates to RSA might be too costly to make work IMHO.

IMHO LSE:JLP is a promotion as proven by depth of Bushveld Merensky Reef and UG2 intersections on their RSA Property, it is not IMHO a real mining stock long term, obviously I am as certain as I can be that the Directors knew this full well before they took on the projects and spun them out to Mug Punters.

Anybody can buy a piece of Moose Pasture thrown out by the majors for say US$150,000 dress it up on an AIM IPO for £20m say US$35,000,000 make the best part of 47 to 58 times their money selling 20% to 25% of the stock for US$7m to US$8.75m on AIM IPO then disappear before the Project is realised to not be Economically viable in typically two to three years time.

The mining market is full of it.

How many Projects make it to Pre Feasibility let alone Bankable Feasibility studies?

Answer not many, ie a fraction of a percent of Grass Roots Exploration, 1 in a Thousand probably.

I only really invest in Mining Stocks run by Mining People ie Mining Engineers, and Metallurgists, and try and avoid those that are not for obvious reasons.

If you want my view LSE:JLP is borderline, and I am not interested in investing.

Alot of people get het up by negative BB Commentry but in reality stocks I have been negative on like CMR,MNT have collapsed stockprice wise well after I stopped posting on them (In both cases total Collapse 24 months later roughly, ie nothing to do with me the innevitable weighing machine took it's course rubbish is rubbish full stop, and Ramping is a very short term phenomena ie most people lose long term obviously).

Will you make money in LSE:JLP long term? No I very much doubt it.

Can you punt it short term and make a quick buck net of 10% Market Maker spreads, 0.50% Stamp Duty and Broker Commisions?

No I very much doubt it personally!

Have Insiders and Promoters been selling?

I think they already have, afterall behind a tip is a tap and the shares bought by the extensive ADVFN BB Muppet Community have been sold by some investor loving caring human beings who have undoubtedly pocketed the cash and moved on to the next Killing Fields!

The insiders will be long gone IMHO in two years time I reckon, promoting yet another project in the latest hype metal or commodity, or perhaps maybe motor car racing sponsorship?

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[ntv] 05/9/2005 21:43

ashley
can i have your thoughts on jlp please but on the potential mining giant thread and not the other thread because its has two insiders who really get my goat
i might not agree with your comments but they are always welcome
cheers ntv

[pecker1] 02/9/2005 08:00

AIM listing in December.

[yikyak] 01/9/2005 11:25

Well it didn't go down last night, it's a start!

[yikyak] 30/8/2005 19:24

Interesting stuff, many thanks. Still very low volumes on the stock but guess this will change when more investors become aware. Speaking of which have they any plans on the promotion side that you know of?

[mr ashley james] 28/8/2005 20:22

Yikyak,

I think the IRR of Smokey Hills was in excess of 150% from memory.

I would at these grades think the Internal Rate of Return would be staggering at a Basket PGM Price for Smokey Ridge coming out slightly differently from Kroondal Platinum say at 59.00% Platinum, 11.30% Palladium, 28.99% Rhodium and 0.71% Gold would mean a Basket PGE Ounce at 8.0452 g/t is going to come in around US$783.40 per toz PGE which slightly exceeds my KPM Model.

Without looking at production ounces ramped up from 95,000 troy ounces per annum to 150,000 troy ounces per annum and CAPEX 100% at US$35,000,000 it still seems to kick out US$74,423,000 to US$117,510,000 Annual Revenue at current PGM Prices by my calculations.

I think Cash costs are predicted at US$210 per troy ounce CAPEX US$35,000,000 so if I use standard LIBOR 4.50% plus 5.50%=10.00% Rate Of Interest I see Standard Bank offering in RSA Historically as a maximum, and work on LIBOR 4.50% plus 2.50% =7.00% Rate Of Interest as a minimum, and 10 Year Depreciation

I reckon costs of project finance could be:-

Project Finance US$35,000,000
Rate of Interest
7.00% assumed minimum US$2,450,000 pa
10.00% assumed maximum US$3,500,000 pa

95,000 toz pa Cash Costs US$19,950,000 pa
150,000 toz pa Cash Costs US$31,500,000 pa

Revenue 95,000 toz pa US$ 74,423,000
Revenue 150,000 toz pa US$117,510,000

Basically looks like at current PGM Prices CAPEX would be paid off within 9.255 to 9.425 months, and by my calculations assuming Gross Annual Profit of US$15,973,000 to US$17,028,000 IRR must be around 152.62% to 158.65% currently.

Really need to do a spreadsheet try to calculate Net Present Value discounted by 10% per annum for Revenue coming in Second Qtr 2007 onwards but this is going to take me time.

The more I look at this project the more I like it.

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[mr ashley james] 26/8/2005 19:49

Yikyak,

Well I come to an average grade of roughly 8.554 grammes per tonne PGE over 0.714 metres, I calculate average grade over 5 intersections is 3.892 g/t Platinum, 3.712 g/t Palladium, 0.848 g/t Rhodium plus 0.096 g/t Gold

I calculate at current prices worth:-

Pt US$896/31.1035 x 3.892 grammes per tonne=US$112.12
Pd US$180/31.1035 x 3.712 grammes per tonne=US$21.48
Rh US$2020/31.1035 x 0.848 grammes per tonne=US$55.07
Au US$437/31.1035 x 0.096 grammes per tonne=US$1.35

Meaning each Metric Tonne of Rock contains US$190.02 of in situ metal.

If I assume 80% of Ore Recoverable and 92% recovered from Concentrate I reckon each Metric Tonne of Ore mined will yield US$139.85 of recoverable metals.

Basically I think they are excellent results and confirm my bullishness about this project and the fundamentals.

I am slightly surprised more people have not got into this share on ASX before it lists on AIM which seems a no brainer to me.

The grades average 266.69% of my US$75 per metric tonne underground investment cut off, ie excellent.

All IMHO, NAG, DYOR etc, etc

Cheers

Ash:)

[yikyak] 26/8/2005 15:10

Comments/opinions?

[pecker1] 18/8/2005 13:55

Red Ninja,

Thanks, it did seem to read like that.

I'm all for caution too with blue-sky exploration stocks coming on to the AIM. But companies with what appear to be real projects are worth examining in detail. Many Aussie investors seem to run a mile when the words Africa/SA are mentioned, so the past lack of interest in PLA may not be too surprising.

[pecker1] 18/8/2005 13:04

Red Ninja,

Always interesting to see a contrary opinion. But I find the article rather strange.

For example, it leaves open the question of why Anglo Pacific (IMHO, not exactly duffers) and New smiths Partners ("highy respected..")should take shares in "some low-grade assets operated by a management team with a recent record of failure".

Second, the description of the SA projects, particularly Kalahari,and the management, seems quite enthusiastic and at variance with the final sentence and recommendation to avoid. All rather odd!

Anybody know of the credentials (i.e. knowledge of PGMs/mining sector)of the authors of this article?

[red ninja] 18/8/2005 12:17

Comment on AIM float on allnewissues.com

Platinum Australia - Widows and Orphans stay away. Everyone else: stay away too.

Background: Platinum Australia has a strange story to sell to the City. The Australian listed business owns a 100% interest in one of the biggest platinum prospects in Australia but was forced to move its interests to South Africa in an attempt to relocate to a region where the metal was better appreciated. Australia has historically focussed on gold and diamond exploration and therefore ignored Panton Sill, a 10 million tonnes resource at 6.13 grams per tonne of PGMs. The company announced exploration was not feasible because the grades were not high enough. Technically, the experts rated the ore as low grade and highly refractory. At this point, Lonmin, one of the larger PGM players had invested a 44.5% stake in the business in an attempt to diversify its risk across countries. When the decision was announced, Lonmin gave up on the project and requested an exit.

PA was left with two options - either to switch focus to a different metal, or use its PGM talents in a different country. The latter was chosen and Platinum Australia placed Lonmin's shares with Anglo Pacific, an investment house and the second largest shareholder and New Smith Partner's, a highly respected resource division of Merrill Lynch. It is not surprising, that the business has chosen to list on the London markets this year, as it believes that the UK appreciates platinum exploration businesses. The shares are expected to start trading in September and Platinum is looking to raise AUS$3 million in a pre-IPO placing valuing the stock at £7 million. Over the last three years, the stock has not performed brilliantly on the ASX: the shares listed at 20 cents, drifted to 10 cents and are now back at 14 cents. Perhaps, news of its three new projects will change this.

Operations: The South African Platinum mining industry is dominated by three majors who produce nearly 90% of all the platinum mined - Anglo Platinum, Lonmin and Impala. Second tier, mid cap players include companies like Northam, ARMPlatinum (one of the largest BEE partners) and Aquarius Platinum. Because of the historic nature of African legislation, most of the acreage has been held by the larger companies and juniors have had a hard time acquiring platinum prospects. With the implementation of the 'Use it or Lose it' law, the majors are being forced concede prospects to the government, allowing the juniors to explore on acreage where considerably lower but commercially viable PGM's can be extracted. The Black Economic Empowerment and the weakening of the rand imposes restrictions on some of these juniors, but the low cost of labour and the quality of resource has encouraged companies like Platinum Australia to enter the South African markets.

Platinum Australia's first project, in early stage exploration, is located in the northern limb of the Bushveld complex, and it can earn up to 74% by spending AUS$1 million. The second project is on the Smokey Hills. The formation is part of the bushveld complex which is be rich in PGMs and is adjacent to a producing mine owned by ARM/Anglo Plats. The Smokey Hills permit is held by Smokey Hill Pvt Ltd which owns rights to 80% of the acreage, 15% is held by a BEE partner, Corridor Mining and 5% is held by the Local Community. PLA is looking to acquire the private business and has agreed to pay AUS$3.4 million for 74% and 15 million shares for the rest. Platinum Oz is expecting to spend over $5 million and is targeting a 1 million ounce PGM resource. Initial drilling has suggested an average grade of 8.75 grams per tonne and a bankable feasibility study is expected to commence in June 2006 with the mine in full production by July 2007. Platinum Australia is one of the rare explorers aiming to build a producing mine. Instead of stating optimistic and probably inaccurate NPV numbers, the business is valuing itself on a cash flow basis, which is expected to touch US$20 million in its first year. As the group builds and develops the project, it is plans to encourage early cash generation through the sale of ore to the nearby mines.

The third and more exciting project is the Kalahari Platinum Mines which, the management believe could contain up to a 10 million ounce resource. Harmony, now ARMPlat, owned the resource and came up with a rather inefficient way of mining the reef. With the intention of mining deep underground in only one section of the prospect, the group came to the conclusion that the acreage was commercially unviable. Platinum Australia on the other hand, went ahead and completed airborne geomagnetic surveys and came up with an open cut mining plan which could throw up 2 million ounces at 3.5 grams per tonne at a production rate of 200,000 ounces. The mine could produce PGMs for over 8 years and this could double if company followed a similar sized underground operation. An inferred and indicated resource of 3.4 million ounces has already been confirmed. Platinum expects to spend AUS$2.5 million on a pre-feasibility study and AUS$5 million on a bankable feasibility study.

Business Development: The business has existing cash resources of AUS$2 million and is planning to raise an additional AUS$3 million prior to listing. John Lewins, Managing Director has confirmed that the business is looking to return to the market in September to raise funds, as it expects to spend over $8 million over the next year on exploration. By July 2007, it is expected that both mines will be in production, At Smokey Hills, PLA is looking to dilute some of its interest by welcoming another BEE to reach the 26% criteria of the African government. And the business plans to return to its Panton Platinum prospect in Australia and is rumoured that feelers are being sent out to Chinese operators.

Management: The management is led by Peter Allchurch, with 40 years of experience in the industry, Allchurch is a member of the Selection Trust and has been responsible for the development of various oil and gas and mineral companies. He is founder of Amity Oil and Gas and is also founder of Platinum Australia. John Lewins, Managing Director brings on board his expertise in building mining projects. A strong believer of the exploration to production passage, he believes that Platinum will be one of the few junior exploration companies to run a producing mine in the next two years. Lewins has helped establish three gold mines in Australia, a gold project in Armenia and has spent nine years in South Africa. Non-executive director Eric Hughes is currently a senior accountant with BHP Billiton.

Investment Conclusion: Platinum Australia is not a hard one to call. The management has goofed in Oz now it is trying its hand in South Africa. The strength of the Rand has made a lot of marginal mines like the ones PA is trying to develop even more marginal. The hat will no doubt be passed around several times more. PA says that Australian investors did not understand its story - we suspect they understood it too well. If you want to play South African platinum look at Aquarius which is a cash cow with proven projects. Platinum Australia is taking advantage of AIM's love-in with mining stocks. This is an opportunistic float of some low grade assets operated by a management team with a (recent) record of failure. Avoid.