Vane Minerals Share Discussion Threads

[combo83] 12/9/2012 08:55

Opal fair play, the lack of newsflow will see this retrace some imho. A quarter of cash conservation with the higher gold/silver prices should set us up well for 2013.

[opaldouglas] 12/9/2012 08:43

Thanks for the post Combo, must say I'm disappointed that Copper exploration is on the backburner until the new year. On the plus point its good to see Vane are conserving cash and playing the long game. I've taken some profits this morning.

[combo83] 12/9/2012 07:40

Source:

September 11, 2012
Shares In VANE Minerals Soar As Sales Nearly Triple And Losses Turn To Profits
By Alastair Ford

Shares in VANE Minerals soared by more than 60 per cent to 1.175p after the company put out interim results on 7th September. Subsequent profit-taking pared the price back to 1.075p, but all told it was a good week for VANE, especially since volumes were strong.

"We traded 10 million shares on Friday alone", says David Newton, the company's chief executive. "That's 2.5 per cent of the company." But given the strength of the numbers, the level of interest was hardly surprising.

For the six months to June VANE delivered sales of £3.4 million, up 174 per cent on the corresponding period a year ago, and profits of £174,000, which compares very well to last year's re-stated loss of just over £1 million.

"We're primarily an exploration company, but somehow we came up with a profit", says David. "We're overjoyed. It's a fantastic set of results."

And well-timed too. Never was there a better moment for an explorer to demonstrate the viability of a cash-producing operation, however small. "All those companies that listed in 2004 and 2005 - there are very few left", says David.

But VANE is one of them, and thanks largely to a gold and silver operation in Mexico that's usually referred to as the Ruiz joint venture.

This project has in large part now superseded the company's Diablito operation, also in Mexico, which for a long time was billed as a cash generator, but which actually tended to end up absorbing more management attention and company capital than it was worth.

"A year ago there were a lot of things behind the scenes which needed sorting", says David, "and it's been a cracking effort. We've demonstrated that we do know what we're doing, and that we are serious." VANE is now processing an average of 100 tonnes of ore per day from the La Colorada vein system on the Ruiz joint venture, even as it plans the final closure of Diablito.

In the first half of the year that added up to just over 16,000 tonnes, and at that sort of production rate the company's future looks assured, at least for the short term.

Broker Northland Capital forecasts that sales for the full year will amount to a handsome £5.8 million, and that profits will come in at an equally useful £300,000.

But David is in a cautious frame of mind at the moment, as he sees equity markets in turmoil all around him, and only the rising gold price offering any prospect of relief. He takes nothing for granted.

"The third quarter will probably be down a bit, as we put ore from Diablito through", he cautions. "The fourth quarter will be more reflective of the norm."

Even so, that's allowing for a fair wind on several variables, some of which are beyond the company's ability to control – like grade, recovery, and the gold price. "If all of those remain consistent and we've got security of supply, then everything will be fine", says David.

"But the joint venture is 50 kilometres along a dirt track. Production could get interrupted. And that's why we've built up an inventory."

More to the point, any significant spending on the company's portfolio of copper porphyry targets in the south-west of the USA has now been deferred, until the beginning of next year at the very earliest. "We're into cash conservation territory at the moment", says David.

"We had £1.1 million as at June 30th. If we keep on getting production in Mexico then everything will be fine, but there's little margin for error. We remain committed to the copper. However, survival comes first."

Still, long-term investors in VANE will know that it's the copper targets that hold the real upside for the company. VANE's impressive team of experienced geologists, culled from the ranks of Freeport McMoRan, are experienced minefinders with several successes to their names.

But at US$250,000 per target, the drilling work required to investigate each target thoroughly doesn't exactly come cheap, especially when the ratio of failure to success can be so high.

VANE's already had a couple of misses on the copper, much to the chagrin of short-term investors looking to turn a quick buck ahead of press releases about drill results. But exploring for copper porphyries is a long-term game, and one David is very keen to get on with just as soon as he's built up enough of a cash cushion from the Ruiz joint venture to pay for it.

"As soon as I've got the cash I will get back on the ground", he says. "Our shareholders have been very patient and we want to look after them. We are very focussed on trying to generate value and trying to take this company forward. If production continues as is, then drilling could start at the beginning of next year."

On that score, it's worth noting that the copper price is holding up pretty well, and looks comfortable at around US$8,000 a tonne. Many industry watchers put Chinese demand growth at around three to four per cent a year, even allowing for slowing growth in the overall Chinese economy. And there are plenty out there too, who see gold at over US$1,800 by the end of the year.

So, in spite of the surrounding storm clouds, the commodity outlook for VANE actually looks favourable. Margins from the Mexican operations should continue to rise, the cash will come rolling in, and build up into a strong enough war chest to attack a couple of copper porphyry targets next year.

David's cautious approach looks prudent, but the markets have already delivered their verdict, with that stunning share price rise.

[combo83] 11/9/2012 07:12

UBS Sees Gold Leaping to $1,850 Within a Month --

If accurate, that's 35% more profit for Vane than Northland used for its 1.5p target (at $1530 / oz).

[scientologyweirdo] 10/9/2012 23:23

fingers chart seems to be pointing down

back below 1p

[opaldouglas] 10/9/2012 20:59

Hi Barnsey, it looks like it.

Interesting to see the risk/reward ratio played its role in your decision to invest. This is why Mexican operation are so important in my opinion (yes i sound like a broken record!)

Also given the share price has nosedived so spectacularly in recent years i'm hopeful the bottom is now behind us as a corner have certainly been turned in the last 9 months or so.

[martin c-j] 10/9/2012 19:47

Cerrito - thanks for your post no. 263. Good to see someone looking at the line items in the results and pointing out areas for caution. It's been a while since you and I sat through that AGM. Must be at least four years ago. It does look like VML are finally turning the corner. Let's hope the cash levels continue to improve and they get some good fortune with the drill bit. Would be nice to hear more detail on the Bouse drilling results, and maybe an explanation for the delays with McGhee Peak.

Chartwise, we are pulling back into support before the next move up.

[barnsey] 10/9/2012 18:18

That would seem to be a 900,000 buy at the end someone confident.

opaldouglas,

Hi, Bought in last week after watching a long time and was impressed by the
progress and self financing situation Vane are now in.
This is a long term hold and for me there is every chance of a great return
and of all the AIM this is for me the best risk reward of them all.
Mexico will grow and so will profit but the risk is the copper but if they
pull it off we will all be rich,fairly quiet normally in the background but
have found you guy's and your posts very helpful and nice to see you have
hung in there in the grey days and i know there have been many.
Onward and upward from here, good luck.

[opaldouglas] 10/9/2012 13:12

Combo, thanks for info.

It's a tough one to call, I think share price progress will really depend on volume in the short term. Either way In my opinion Vane is still greatly undervalued at a market cap of 5m the downside is relatively small compared with the huge upside potential, interims really confirm this.

With so much progress over the last year I'm really optermistic about the future. Full year results are guarenteed to be the best since Vane listed on AIM (by a very long way) and the company is certainly in its best shape of its relativly short life.

Of course that will all be academic should Copper find be confirmed ;)

Be great to hear if anyone else bought in on the back of last weeks interims and how they see things panning out?

[combo83] 10/9/2012 11:51

Asked (brilliant chartist) to take a look. Here it is: -

[yesyesno] 10/9/2012 10:37

As I said a few weeks ago, this will make us very happy by year end, more good news to come yet. Don't get too concerned about copper just yet.

[combo83] 10/9/2012 10:08

Viktor's opinion evokes the same response across advfn: -

[scientologyweirdo] 10/9/2012 09:56

Chart suggests collapse back below 1p

[combo83] 10/9/2012 09:52

Expecting some consolidation here before the next leg up. Any eventual break above the 1.3p level could be swift, though it may take some time to gather strength for that big move imho.

[lucky_punter] 10/9/2012 07:28

VANE Minerals (LON:VML) will stand out from the crowd of small-cap miners and explorers this results season after delivering a maiden first-half profit.
Its revenues rose 174 per cent to £3.4 million in the six months to June 30, giving a profit of £177,470.

[thinking] 10/9/2012 06:30

Some interesting views, basically all positive and realistic, lets see what the price does this week now people have had time to absorb the results and new comers understand the comapany.

[combo83] 10/9/2012 01:52

viktor, oh dear. In case you missed it, on the balance sheet the 'missing cash' is still there in the form of inventories (stockpiled ore as announced in August) and 'trade and other receivables' (money owed to Vane by Ruiz). You'll note at year end 2011, Vane owed net -£406,731 in trade and receivables, which has now not only been cleared but the situation reversed, with Vane now owed net +£217,380. That's an improvement of +£624,111 relative to 6 months ago. Together with the +£325,270 increase in inventories that's an increase of +£949,381 in these liquid assets relative to end 2011.

As you also noted, -£500,000 of a loan note was repaid during the period. The next payment is not due until May 2017.

Together these amount to +£1,449,381 which would otherwise have added to the cash position for this financial period. There's a reason the stock rallied and a new broker initiated coverage with a BUY recommendation. The balance sheet has actually strengthened up: total assets are up, total liabilities are down, and net assets are up +14.4%.

Nice try.

You can access the results here if you haven't read them yet (presumably you haven't): .

[phsycho] 09/9/2012 20:01

Viktor you just cant stay away, your short hurting is it?

[scientologyweirdo] 09/9/2012 18:44

Oh of course the rampers will try to ramp and use sophistry to cover up the CASH LOSSES but Professional Analysts don't get the wool pulled over their eyes so easily.





Interim results to end June 2012 for the US copper and uranium explorer are pretty academic, although they did report an overall modest profit, which was generated from their silver/gold mine in Mexico.

In spite of the profit, cash flow from operations was insufficient to
cover administration and exploration expenditure. In addition, £0.5m of convertible loan stock was repaid, thus reducing group cash to around £1.1m at period end. At end December 2011 this was almost £2.3m.

[scientologyweirdo] 09/9/2012 18:41

Looks like lots of small time muppet traders got sucked into this rubbish on Friday.

My reading of the results was that they consumed £1m of cash in the last six months.

Wonder when the next cash call will be ?

[opaldouglas] 09/9/2012 18:26

Thanks for link, i'll have a browse this evening.

[opaldouglas] 09/9/2012 18:24

Combo, i personally would like to see Vane bring out the big boy 200Tpd mill and increase production as it seems clear to me this is achievable given news released so far... Although the sensible parrot on my right shoulder says things are going rather well lets stick with the softly softly approach.