Van Dieman Mines Share Discussion Threads

[pugugly] 03/6/2008 09:44

Das;> Could be or could be that 70 years ago they only sampled "hot spots" We just do not know - A gamble either way at the moment (imo)

[daz] 03/6/2008 08:30

Pug

There's no doubt the company have been forced into re-confirming the resource, they wouldn't want to spend 0.5m A$ in their precarious financial position. Could be the banks or even the institutions themselves, who forced them.

There is a chance that if they found tin 70 years ago using methods available at the time, that with more modern techniques, the resource might be shown to be even bigger.

[resourcetrader] 03/6/2008 08:20

Maybe today the stock makes it's recovery.

[resourcetrader] 02/6/2008 23:38

Not attracting any sellers at this price may be an indication that the bottom has been reached.

[maddox] 02/6/2008 09:52

wassapper,

I think you can be too critical of a non-exec, its more of a questioning, advisory role - they are not there to run the business - that's the management's role, and that's the way it has to be. On the otherhand, if the management ignores their advice and makes the wrong decision - then they have to go.

I hope that this is what's happened here, and we have the right people in place to see VDM through to production.

Regards, Maddox

[daz] 31/5/2008 23:10

There might be room for hope there, Ron Goodman was appointed in Aug 2007 before coming OPS director in April.

I'm reasonably sure he was brought in at the behest of the institutions who at the AGM made their misgivings very clearly known to management.

[wassapper] 30/5/2008 22:57

Rt - wait. You wil miss nothing. The "new" ops director has always been a non-exec. Was he asleep when they discussed their mining plans?

[resourcetrader] 29/5/2008 20:24

Tempted to purchase more whilst the price is at this level as am sure a recovery will see this trading back into the teens. The potential, reading the minesite article, is extremly good and a positive RNS is all that will be required to boost the price significantly.

[daz] 29/5/2008 19:18

Agree that some caution is warranted, they have changed the whole mining approach and new one needs to be proven: theory put into practice.

You do wonder what the old guard were up to, they had so much time while the permits were delayed to both think about and trial their mining methods and still seem to have missed that de-watering is an issue in the wettest part of Australia.

Could come good if all goes to plan but there is definitely room for further delays, which would make the funding position worse.

[katylied] 29/5/2008 18:31

I would still advocate keeping your powder dry. First a downbeat RNS, now just days later, an upbeat press release. They need to get their story straight...

[resourcetrader] 29/5/2008 14:20

Hopefully they are far closer and this dip will make the last buying opportunity prior to reaching more realistic levels.

[nigthepig] 28/5/2008 19:21

Thanks for that Cestnous

[maddox] 28/5/2008 17:00

Nice one Cestnous,

I quote 'At a cost of A$500,000 it's probably the last thing the company needs right now'. Absolutely right. Cannot this be postponed until production is underway and some cashflow in view.

Regards, Maddox

[cestnous] 28/5/2008 15:51

From Minesite today.

May 28, 2008

Van Dieman Mines Tries To Steer A Path To Production, Years Behind Schedule


By Rob Davies



Despite the defenestration of most of the previous board in an acrimonious annual general meeting last year, Van Dieman's road to production looks, if anything, to be bumpier than it was before. Trial mining has revealed that the dry mining technique that the Van Dieman was planning to use is actually inappropriate for the conditions at the company's alluvial tin mine in northern Tasmania.
Managing Director Ken Frey explained to Minews that the original plan to use conventional truck and shovel mining to feed a conveyor belt that would load more trucks to take the ore to the processing plant would not be effective because of the water in the mine. The good news though, is that a gravel pump can be used instead, as is the custom in the tin mines of Malaysia and Indonesia. This has the double virtue of being cheaper to operate and requires less equipment.

Recently appointed operations director Ron Goodman has thoroughly reviewed the situation and has devised a revised mining plan around this technique. His new scheme makes a lot more sense. Mr Frey explained that some of the "yellow metal", as he describes the plant that's now surplus to requirements, can be returned to the leaseholders and the rest can be sold. Indeed, because of the current state of tight supply for mining machinery some plant is being sold for more than it was bought for.

In all Mr Goodman thinks the capital cost of development at the two sites at Scotia and Endurance can be reduced by about A$4 million to A$6 million, which is a pretty substantial saving. The biggest element in that is the conveyor belt at Scotia that cost $3.5 million, and where mine construction was 85 per cent complete. The conveyor belt is in the process of being disassembled prior to disposal, and is the reason for the delayed commissioning. The aim now is to get the Scotia Mine into production by July with full output by the end of the year. Endurance was less advanced and the changes there can be made more easily. So far, there's been no change to the timetable for Endurance, and the plan is for production to start in early 2009.

With tin prices at $24,000 a tonne the opportunity cost of these delays is significant. It's surprising that this problem was not identified earlier but Mr Frey said the issue only came to light when trial mining started six weeks ago. At least now that problem has been identified and resolved.

Alluvial deposits are notoriously hard to define by drilling because of their irregular nature. However, Mr Frey says there has not been any issue with grade control in the mine so far. Nevertheless, Van Dieman now says the previously published JORC reserve and resource is not consistent with current best practice. In part this is because it relied on drill data that was 70 or 100 years old. Consequently, the company has decided to start a limited drill programme of 5,000 metres to confirm the reserve base that the mine plan is based on. At a cost of A$500,000 it's probably the last thing the company needs right now, but Mr Frey says that the two fence lines of ten holes each will be in-line with conventional mining practice and will provide valuable information to assist the mine planning.

These delays means that Van Dieman's working capital position is being stretched and the company has been obliged to make the standard statement that it is examining various financing options. Mr Frey is keenly aware that tin prices have more than tripled since the project started and these delays mean the company risks losing out on the high prices. One option the company is examining is some forward sales to lock these prices in and secure more cash flow. All in all he and his team are busy men but it does look now as if there is clearer path ahead, albeit a different one from that envisaged last year.

[varies] 23/5/2008 09:58

What a dog we have here but when everyone hates a company most is probably the best time to buy.
If working on this principle, however, one certainly needs to spread one's bets over a whole pack.
I agree, however, that VDM does seem to be worth a punt.

[chipperfrd] 23/5/2008 09:46

You might come to that conclusion!

Mkt Cap of £9.8m, yet if they actually get into production I calculate an EBITDA of c £20m for 2009 at current tin and emerald prices.

Yes, probably worth a punt!

[m5artin] 23/5/2008 09:31

I hope I am not wrong but I think 6p is worth a flutter.

[pugugly] 20/5/2008 13:50

Not sure:- Only recently picked it up in the rns of 16th May
"The Board has accepted the conclusion from the Project Review that the basis upon which the previous management team determined the JORC reserves and resources was not consistent with current best practice. This is largely because
of the almost total reliance on drilling data that is 70 to 100 years old."



- Cannot find it in a quick search the prospectus but it may be there by implication. Anyone remember who the Nomad was?



but ot may well be there.

[maddox] 20/5/2008 12:59

Hi Guys,

The JORC figures were a key factor giving me assurance on my investment in VDM. This week is the first time I've heard that the data used is 70 to 100 years old! Did I miss something or did they just fail to mention it?

Regards, Maddox

[varies] 20/5/2008 11:04

Thanks, Innovation, for your encouragement.
I have never yet bought on margin. It would obviously have proved a blessing here as I would have been forced to take my loss earlier.
I am an old-fashioned investor with boxes full of dud shares but with an occasional big winner. So I am not too bothered about VDM.
Thank you,also, Pugugly and bushtuckaman, for your observations. There is indeed plenty to worry about and I am glad to have only put a modest stake on the table having already lost half of it !

[bushtuckaman] 20/5/2008 09:27

Similar views to you Pug, i've been looking at these for a while. The jorc is the main concernt of mine and could be 6 months from a result. I would maybe willing to take a punt on that, but will wait to see if their is a capital raising as this should offer a firm support to the share price Could be a great recovery play if they get their act together.

[pugugly] 20/5/2008 09:12

I have been looking at this over the last few days - Like innovation I also have held Kenmere SINCE 2001 - What worries me here is not only the incompetence of the previous mangment, the problems of original mining method, full production not expected until the end of the year (imo still plenty of time for this taget date to slip) and the fact that there may be a small equity issue as part more financing.

In addion the JORC data is based on 70 - 100 year old drilling data - Implications - Do the board really know what is there ?- Could be more or less !!

PLUS Advfn fundamental are wrong Fully diluted number of shares including Warrants & options 157,500,000. @ say 7.5p gives a market value of £11.8 million.

I am still trying to reseach the conditions and implications of the last finance package.

Any further views??

[innovation99] 20/5/2008 00:15

Don't feel foolish varies - even the financial institutions did not forsee the management incomptence. The commidity fundementals, however, are still in place and the new management team (vetted by the financial institutions)have clearly demonstrated a more rigorous approach than previous management, and the assests are still impressive, not just for the 1.5 million carats of quality sapphire any more given tin prices of which VDM can produce 700 tonnes per annum.

I invested in Kenmare Resources some 4 years ago at 10p and the first two years there were more downs than ups but they came through (eventually) and their commidity (ilmenite and zinc) as are most commidities in the global market very much sought after at premium prices. The share now stand at 57p and still there are investors on the BB complaining because they are all waiting for the quick buck rather than looking at the investment long term.

What is my point? VDM is high risk, but not an outright gamble. It is no worse than a poor keep house it just needs refurbishment - once the house is in order the true value will reappear. So as your stop loss is shattered keep your nerve and hold, do not sell on the fear factor.

Yours a new investor with a two year hold programme.