Uruguay Mineral (SEE LSE:OMI) Share Discussion Threads

[bluelynx] 09/10/2009 10:19

ttm

I tend to agree with you in regard to the management, surely the only thing they have done 'wrong' is not to be successful with the exploration and therefore not increasing reserves, which is just bad luck. If new resources had been found then we would all be much happier.

Let hope they can prove themselves with the current take over, but at this price the risk reward is good in my opinion, just don't risk too much on it.

[3mahal] 09/10/2009 10:17

I think we will remain static here with the share price until we hear of news on extra funding either in the form of loanfacility or another placing.If the co opt for a placing expect it discounted to the current price.AIMHO.

[themoneymonster2] 09/10/2009 10:09

What makes me laugh is that everyone here was saying that UGY's share price was hovering at all time lows because they didn't have the resource to keep the company going past Arenal Deeps has been depleted.
Then they announce a stonking deal where they buy 2 million of potential resource for paper at the current share price equivelent to around $4 an ounce when gold is at $1045.
Seems they can't win.

[themoneymonster2] 09/10/2009 10:05

[e-mail] if you want to tell them.

[skidaddle] 09/10/2009 10:03

Well the management have killed this one stone dead until next week.

Great timing.

[hampton_caught] 08/10/2009 22:08

Thanks for the answer, and the added sarcasm!

I was just after the broker you were using.


On the news of the "Merger", FVX doubled iirc. Now the price has hit a peak, a lot of short termers will be jumping out with their profits which may cause a short term drop - that is the time i'll be buying FVX.

[robson1974] 08/10/2009 22:01

i) via my TD Waterhouse brokerage account, using a computer operated by my fingers which are fed signals by my brain

ii) badly

[hampton_caught] 08/10/2009 21:52

How are you buying your FVX?

[robson1974] 08/10/2009 15:28

FVX bid/ask 0.17/0.18
UME bid ask 0.55/0.60

(i.e. @ 0.18 you are buying = 0.2508 worth of UME (0.456*0.55))

ceteris paribus if the deal goes thru one can buy FVX @ 0.18 and assuming conversion happens make 40% when the deal goes thru

just a small hedge for me

if deal goes thru i reckon upside to both FVX and UME
if deal fails, FVX may halve? but UME will probably get marked up 25%?

[themoneymonster2] 08/10/2009 15:17

Bit of interest today. 35k already bought in Canada. Paying 36p there now also at c$60

[robson1974] 08/10/2009 14:57

UME in Canada is 0.55/0.60

I'm buying FVX at 0.18

[themoneymonster2] 08/10/2009 14:25

With gold at $1050 and production costs at $700 then assuming $350 profit per ounce on 60,000 ounces = $21 million or £14 million. 65 million shares fully diluted after/if this deal goes through so 314 million divided by the 65 million shares = 21.5pps earnings. Cash on top puts us on a p/e of 1 with cash or 1.5 with cash on top. I think we should be on a p/e of at least (absolute worst case) of 3 plus cash so 21.5 x 3 = 64.5p and shall we say 5.5p for cash = 70p is where we should be right now in my mind. With massive upside potential as UGY reckon they can get costs down per oz to $550 at Arenal Deeps. So $500 oz profit then. Just to cheer everyone up, here is the maths for that: 60,000 x $1000 gold, $550 costs = $450 profit x 60k = $27 million or £18 million. £18 million divided by 65 million fully diluted shares = 27.7pps earnings. You can start to times these figures by ten if gold stays above $1000 and UGY deliver. You see the upside.

No doubt share price and a couple of others will try and rubbish those maths but I don't see any of them giving any fundamental arguement against them.

All the best

[sharpshare] 08/10/2009 14:09

With gold over USD1,050 per ounce and gross profit about USD350 per ounce then gross profit could be around USD21m assuming 60,000 ounces mined. Mkt cap around GBP16m now.

[robson1974] 08/10/2009 11:06

Of gold coin craziness and conspiracy

Posted by Tracy Alloway on Oct 08 09:10. 3 comments.

In another instance of economics in reverse, the US Mint has suspended production of certain gold and silver coins because of "unprecedented demand."

[themoneymonster2] 08/10/2009 10:59

EK quiet. Wonder if he will be attending the AGM on Tuesday. Should get an update then so only 3 trading days left to top up : )

[skidaddle] 08/10/2009 09:07

I'll stick to UGY which I think will go up either way. Though I know which outcome I prefer. I think FVX on the other hand can go up or down depending on the deal being done or not.

I appreciate your argument though, but it comes with extra risk.

[robson1974] 08/10/2009 09:02

I appreciate the deal break risk but even with that taken into account given Matrix's opinion that it is highly likely to go through and if it doesn't then UGY mngt probably would lose their jobs so UGY would then become prey as a UGY shareholder I can win either way if i hedge by buying some FVX

[skidaddle] 08/10/2009 08:51

The deals not done and may not be.

If the deal does not go through, UGY shares are going to fly. And FVX shares will probably go in the other direction.

I think that the shares are being held back until the 13th. If the shares of UGY were to rise before then it would make the deal look too expensive to UGY and even have less of a chance to succeed.

With that in mind I have bought another 20,000 this morning. I think gold is going to at least $1250 perhaps a lot more so either way I think these shares are going to rise.

No sign of dogberry these days.

[robson1974] 08/10/2009 08:44

the bid/offer on FVX is 0.16/0.17

FVX shareholders are to get 0.457 UGY for each FVX so that implies that FVX is trading at a huge discount to the acquisition price, even accounting for deal break risk

surely it is a no brainer to arb the difference or at least hedge ones UGY exposure by buying some FVX? has anyone here done it?

[sporazene2] 08/10/2009 08:42

QP, give where the gold price is the ONLY thing I want is an appreciating share price. Is this too much to ask...?

[qpwoei102938] 08/10/2009 08:38

I think you need to stop looking at the past.

The world has changed. UGY are in a stable area producing Gold. What more would you want! (apart from an escalating share price, of course!)

[corrientes] 08/10/2009 08:29

and down massively for any other time frame you might care to mention.

[sporazene2] 08/10/2009 08:28

QP, fair point and you're entitled to your view and take your position. I agree we have belatedly risen but if you take the previous 12 months here I suspect we are the bottom end of the sector performance, happy of course to be proved wrong on review of the data.

[qpwoei102938] 08/10/2009 08:20

I won't be exiting these short term.

There will be dilution, but the company importantly will stay debt free. They are undertaking their strategy of buying property within the region.

And, even more importantly, the price of Gold goes ever higher. These will jump on the ride soon enough. Remember, we are up over 100% since August!