Van Dieman Mines Share Discussion Threads

[jm barrie100] 08/8/2007 15:34

From the company's advisers:

The tin production mentioned in yesterday's RNS announcement relates to one mine, Scotia; the tin production mentioned in June 2006 RNS announcement refers to both Scotia and Endurance, the latter is due on stream next.

[bo doodak] 08/8/2007 08:22

Jonwig,
Could be that no doubt,
I wonder just how much effort is put in though as all these brokers benefit from the constant to an froing between themselves

[jonwig] 07/8/2007 17:34

KL - the mining team have been twiddling their thumbs for years waiting for bits of paper to progress the project, so whilst you may be right, you'd think they were ready to hit the ground running!

BD - yes, that's one question on my list. The first placing was on 18 July, they changed broker on the 20th. Maybe that was the best they could manage, hence the sacking?

[bo doodak] 07/8/2007 17:16

Jonwig,
At the AGM, if you feel able, perhaps you could ask them why these two tranches were not combined, as to my mind they must have known what sum they required at the time of the 1st tranche, less than a month ago, even if to accelerate the schedule as KL suggests.
Dilution is the norm but there is a most unsavioury aspect to this

[katylied] 07/8/2007 16:28

The AIM admission placing was at 30p/share. The shares currently trades close to the recent all time low, so I would imagine RAB are basically averaging down. Hard to imagine they can have accumulated so many shares and not be carrying a substantial loss. Anyway, I suspect what this is about, is accelerating the production schedule. Raising debt probably takes time, while given the current tin-price, it is to everyone's benefit to get the mine up and running ASAP...

[jonwig] 07/8/2007 15:42

KL - not quite.
According to the admission document [page 100] RAB SS held 7,250,000 immediately following admission.

The fact that they don't appear on any holdings lists since then suggests they are behind some of the nominee holdings, but what they've been up to between times isn't all that clear, is it?

At least RAB SS is pretty dedicated to making money, so something must be going right!

[katylied] 07/8/2007 15:29

Substantial Shareholders (3%+) as of 12 June 2007
-------------------------------------------
BankOfNewYork(Nominees)Limited................4,826,667.......5.26%
ChaseNomineesLimited..........................6,240,536.......6.81%
CreditSuisseClientNominees(UK)Limited........13,085,000......14.27%
HSBCGlobalCustodyNominee(UK)Limited..........13,829,417......15.08%
MarkswiftLimited.............................37,350,000......40.73%
VidacosNomineesLimited........................3,772,832.......4.12%
ZNomineesLimited..............................3,430,000.......3.74%

-------------------------------------------

Prior to this placing RAB evidently held.....14,890,000
Assume RAB also took the previous 2m.........12,890,000

So.... in the absence of any other RNS notification,
can one conclude that previously RAB were hiding
behind either CreditSuisse or HSBC?

Otherwise, they would appear to have
just landed from outer space...

[jonwig] 07/8/2007 15:28

I find this quite a disappointment - two tranches in a couple of weeks.
Why so?
The post-tax NPV of A$62m is now worth 25p/sh on the basis of 98.5m shares in issue.

[nickcduk] 07/8/2007 14:40

Not surprised we had another placing today. The positives are RAB have upped their stake. The negatives were the terms of the placing. Market conditions aren't particularly great and I wouldn't be surprised if RAB were shorting the stock in the market to get in at a lower level. That probably explains why it was done at 10.5p. Hopefully that should be the end of equity issues and any further funding will be done via debt.

[mammon] 07/8/2007 11:00

I guess what I should have asked is how are they going to fund the expansion. I was under the impression that they had enough for both, now I'm not so sure.

[jonwig] 07/8/2007 10:37

Mammon, depends on the tin price how much annual cash flow there will be.

At $15,000/t: 700 × (15000 - 7500) × 0.8 × 0.5 - 1,000,000 = £1,100,000

At $11,000/t: 700 × (11000 - 7500) × 0.8 × 0.5 - 1,000,000 = £(20,000)

[0.8 = assume 80% of contained tin at spot; 0.5 = £/$ rate; 7,500 mining cost per tonne; £1m = probable admin costs.]

The strong suggestion is that speculative funds are responsible for the recent price spike in tin. If so, how will leveraged positions cope with credit squeezes such as they're probably facing?

VDM's projections (NPV etc.) are based on tin prices between $8,500 and $10,000/t.
So over the next six years it would be safest not to assume too much in the way of tin prices at current levels.

By the way, they're re-opening South Crofty, which should be viable on a tin price of $4,000/t:

[wassapper] 07/8/2007 10:11

Daz - thanks for the info.

[mammon] 07/8/2007 09:58

Are they planning on using the cash flow from the Scotia mine to build the second?

[katylied] 07/8/2007 09:57

...During the second half of 2007 the Company plans, through its environmental and engineering consultants SEMF, to prepare and lodge a Development Proposal and Environmental Management Plan for its Endurance project. This will enable the Company, subject to the granting of the necessary government permits, to commence pre-mining works at the Endurance site during the first quarter of 2008 with full production expected by the middle of the year...

More output to add to the Scotia 700 tons/year...

[daz] 07/8/2007 09:30

AGM details

Thu 23rd Aug 11:00 - Lawrence Graham LLP, 4 More London Riverside, London SE1 2AU

[wassapper] 07/8/2007 09:27

jonwig - when and where is the AGM please? I can't seem to find details. Thanks.

[jonwig] 07/8/2007 09:21

KL - I'll ask at the AGM.

The other query I have about the six year offtake agreement is whether the deal started on the signing date or with the first shipment.
There's a two year plus gap!

If the latter, from Thaisarco's POV, they are committing themselves to eight years' terms, when their costs will be rising quickly.

Communication, eh?

[katylied] 07/8/2007 09:09

jonwig... Looking back over the various statements about production, there is a degree of ambiguity, but on the whole may be consistent. The deal with 'Thaisarco' (that has consistently stated up to 1500 tons tin per year) was for VMD's 'entire projected output'. The 700 tons per year figure stated today is specifically for the scotia mine. You know this company better than I, but perhaps that is the explanation. Note that the 2006 annual report, which came out only recently, still quotes the 1500 figure...

[jonwig] 07/8/2007 08:54

jonfa - the RNS of 21 July 2005 is unclear on that point you make. You could well be right.
Communication, eh?

[daz] 07/8/2007 08:51

Jonwig, yes the mine cost is certainly going up, I had already thought that costs would be around $10,000/t just because of the delay and the increased prices of the equipment they will be leasing, which like all mining equipment is in short supply. The reduction in annual output can only add to the unit cost.

[jonwig] 07/8/2007 08:50

What was walked down Wiganer?
Someone dumped 1.8m shares @ 6p after the placing. Then some more.

I sold for 11p the 20,000 bought a week ago @10p. They shouldn't change their turnover expectations without proper explanation - this was just slipped in.

[jonfa] 07/8/2007 08:48

presumably the 1350-1500 tonnes is assuming full production from scotia plus also endurance etc

[wiganer] 07/8/2007 08:47

Looks like it was walked down to get the placing away and will now be walked back up. In for a few.

[jonwig] 07/8/2007 08:46

Daz.

The halving wouldn't really matter if the mine life is doubled - except that 'admin expenses' came in at £928,000 last year. If that's a typical figure, the breakeven level is that much higher. (I reckon around $11,000/t.)

[daz] 07/8/2007 08:36

Jonwig, was wondering the same, to lose 700 tons of tin is careless to say the least.

I think though the Sapphire production is more than expected