South China Resources Share Discussion Threads

[nobull] 15/6/2007 09:05

Still holding. But what about Kimboy's point that they are in a binding agreement to come up with $8m to pay for Zhunuo? Or is it like a house purchase, where if you fail to complete the transaction after exchanging contracts you lose the deposit (and nothing more?). Thanks for that Wols.

[wolstencroft] 15/6/2007 08:25

I reckon this is the time to buy. Cannot get much worse.

The downside is probably -50% the upside several hundred percent.

But this is not about mining anymore. It just betting that something good will happen after all the bad.

[strow] 15/6/2007 08:19

Dont panic mr manwaring

[redm1re] 14/6/2007 20:44

Strow, your enthusiasm is err, err, admirable, however I cannot share it, their credibility is shot, despite the departures.

Mining exploration is very high risk, however this one is now off the risk scale for too many people.

I wish you well but I can't really see a future, at least in the present guise of SCR

[strow] 14/6/2007 18:23

Come on scr!.......... :-)

[nobull] 14/6/2007 13:41

Simon, point accepted about JV having no residual value to SCR. Thanks.

[strow] 14/6/2007 12:58

Yes i was referring to further drilling at zhunuo,which currently if it is being progressed,and i dont see any reason why it might not be,is being done by brigade 2 ,i think it is,so no need for scr to announce as it is not their project yet
The other point here is if good results were coming in from zhunuo,then would scr really want anyone to know?i would suggest not,for several reasons which may or may not be obvious
Zhunuo is in my view a project that needs to be treated with sensitivity and patience-it may or may not be rewarded,but from a resource base per se i think it would be

[wolstencroft] 14/6/2007 12:42

Yes Danfeng has gone. When I said that I think that it will still be mined I meant by someone else!
Lets face it, this is currently effectively a shell company with 1-2m cash and some offices in China and some decent tax losses (could be 8-10m which is worth 1-2m at least). A lot of work of course (but loads of companies do load of work and it comes to nothing).

3p is fairsh value, I think, bu tthen so is 2p and so is 4p!

[simon54] 14/6/2007 12:21

I presume Strow was referring to further Chinese drilling at Z. I asked AC this back in February:

The 9th Jan RNS indicated that assays from a further three holes at Zhunuo were pending, with drilling in progress at a fourth. Do you anticipate releasing details of these results when available?

AC: WE ARE AWAITING SNOWDENS ENGINEERS (AUSTRALIA) REPORT.

Still awaiting, it seems.

nobull - I can't see how Danfeng can have any value at all to SCR now, given that they've withdrawn from the JV.

[nobull] 14/6/2007 11:58

Can't really understand why they should need to look at other projects when you would think they would have enough on their hands with Lingkou and Zhunuo.

Would like to know if I was the only one who mistook Danfeng for a "definition drilling" type of project when in reality it was perhaps more of an "blue sky exploration" type, or do people feel the company correctly portrayed Danfeng's risks in the prospectus/Copper Developments Acquisition document? Thanks in advance for any thoughts on that.

Seems normal to me that AC should continue as a non-exec to facilitate an orderly hand over of the job to NM.

[strow] 14/6/2007 11:24

kimboy-$8m is £4m-they currently have half that,so would need a further £2m to come up with the payments
We dont know how the ongoing drilling is going -the grades for open pit are v.good i think-it will also be low cost due to this
If the resource is as big as they hope,i.e many times bigger than the current figures,based on drilling to date,then it will be massive
Obviously they will need to get a move on with it,if the deal is closed-there is no denying it would be an excellent project IF they can get it and therein lies the gamble,but they still have lingkou down south and are still looking for other projects,which will be ongoing
Clearly they will also need further funds for working capital,but as i said before,i think IF they can get the right projects,then they will be able to get the funding for them
As for copper at $1.20,well i cant really comment on that-always a risk,but long term im not sure people are forecasting it back there-last time i looked 27 month futures were at $2.62/lb

[kimboy2] 14/6/2007 11:11

FWIW my view is that it is impossible to judge the merits of individuals unless you know the inside story of what has happened here, which we don't.

I have no doubt that A.C. expected Danfeng to proceed on a small start up basis and expand.

I still believe that the drilling campaign is the root of the problem. I think it was so incompetent that they don't really know what they have got or where they have got it.

If this were correct they would then have been faced with more or less starting again or moving on. It looks as though they decided that Zhunuo was a better use of whatever resources they can muster.

As for Zhunuo there are a number of problems from my point of view.

Firstly they don't have the $8m to buy it or the money to explore it.

Secondly they are committed to a binding arrangement to come up with the dosh. If they don't they are bust. Any potential source of funds will know that they have SCR over a barrel.

Thirdly any potential production at Zhunuo is at least 5 years away. The grades are OK but not exceptional. There may well be operational problems at that height and the price of CU may be back to $1.20/lb when they start production.


IMV SCR fell over the investment/gamble cusp some time ago.

[strow] 14/6/2007 10:38

Wols-how can they get rid of a/c??-that would have to be a united board decision and why anyway!! despite what has happened,he is still a very talented guy

[wolstencroft] 14/6/2007 10:28

Well maybe I am sticking my nect out but if I were an institution I would do the following

1. Get ride of AC (and SL but hes gone already)

2. Tell SCR NOT to even dream of liquidating the company. Despite danfeng it has true value in China

3. Phone around contacts and try and get something private in China reversed into it, with a huge dilution ox existing shareholder not because that is necessary per se but to dilute AC SH and Natan out of existing (say taking their holding down to 5-/10%). Of course as an institution I would take part in the financing / placing, probably at around 2p per share

4. Get a good experienced guy in charge as CEO

just guessing

No inst can sell much because there is no one to buy.

[strow] 14/6/2007 10:13

nobull-no worries,you have to do whats right for you
Another point,is when did we last see any notice of institutional selling??ages and ages ago-all the selling for the past 3-6 months has been cumulative small p/i selling,thats very obvious and we have had a/several bigger buyers,although this has not been evident for a few weeks now-it is not the whole world that has a downer on scr,just those that have been badly burned,or are not prepared to take the risks
We do now very certainly have a fresh start-lets see what happens

[hiram abiff] 14/6/2007 10:08

Valentine - another view to your -

"A married man's glass is always only half full because the 'other half' has the rest!"

A married man's glass is always only half EMPTY and the 'other half' WANT the rest"

I Must admit - I did retain my shirt though - so I cannot complain too much!!

HAb

[nobull] 14/6/2007 10:07

Strow "two young guys who i dont believe will give up easily". Perhaps not, but they are not exactly risking the shirts on their backs (£207,500 in total according to my calculations for AC and Nathan). If they fail they are mostly just giving up the upside. Anyway I'll give it a rest for now and quit grumbling.

[strow] 14/6/2007 09:50

Nathan according to the website appears to have 13 years experience in mining as opposed to a/cs 11,and also as you i think stated yesterday has been ceo of a company before-two young guys who i dont believe will give up easily-as far as i am aware there is no problem as such with zhunuo-things just take a lot of time and tact

[nobull] 14/6/2007 09:49

Strow agreed about "thats a big assumption re raising money". I have edited the offending phrase to end with a question mark. If it is true that it was a shock to AC that Danfeng was not viable, then he probably had inadequate experience for the job. At the AGM I recall only "business" or "commercial" risk being mentioned. Nothing about Danfeng being subject to "exploration risk" was said (although many experienced investors would have known that, but not myself). I presume the attractive sounding Chinese calculated inferred resources were in fact excised out of the Danfeng exploration licence area (the reason that area wasn't drilled?).

[strow] 14/6/2007 09:33

nobull-thats a big assumption re raising money-if the project ever is in the bag,im sure there will ne institutions all over them wanting a piece
as for the next phase,i truely believe a/c thought it could be possible to mine danfeng,hence the next phase-it obviously was a shock to him as well

[nobull] 14/6/2007 09:29

Strow, very brave of you. I haven't made up my mind what to do, but I just can't for the life of me see what a 35 year old university contemporary of AC can do to turn this thing round other than slap on us the additional cost of a voluntary liquidation to return the remaining funds? Dr T was called in out of retirement. And worse we've lost some geological expertise in the resignation of AC (but I still agree it was the right thing of the insti's to do on the grounds of wealth destruction and lack of openness, even if a lot of the wealth destruction has been due to exploration risk going bad, and that in turn causing dilution risk to go bad i.e. not all AC's fault).

The "We shall continue to review mining opportunities with the
intention of obtaining benefit for South China Resources Plc and maximising
shareholder returns" at least means they are not contemplating voluntary liquidation today, but who knows next week - it could be a completely different story. Recall the statement at the time of SL's resignation: "Steve has committed himself fully to establishing the company in China and now leaves the company as it seeks to transition to its next stage of growth" just a few months ago. All b*ll*cks. I agree with Simon the lack of any mention of Zhunuo is simply awful (they can't raise the money to pay for it, at least not with the present Board composition?). For now continuing to hold. (Will be commiting myself to a looney bin shortly for continuing to hold).