Zambezi Nickel Share Discussion Threads

[tippingpoint] 23/5/2007 21:23

relishing - well ZNI have Oryx which has some interesting exploration grades, the best though being the rockchip 6.4% davidite so not entirely representative, and a clutch of licences. I think a comparison with URA six months ago not too far away. URA has done a great job thus far though dont you think. I bought them at under 2p in Oct and sold at 3p though :-(

Bowlhead, but at any point in time EV is mkt cap less cash. In the ideal world for an explorer cash goes down but EV increases to reflect the success of exploration. You are punting on that equation working in your favour which of course, as you rightly suggest it may not.

And as for buying when nobody else is here - well I'm a contrarian, so that is what I try to do, buy stocks off radar that have more inherent value than the inefficient market gives them credit for. Dont always get it right though of course.

IMHO

[flojo] 23/5/2007 14:58

Hello groats told you to watch this one!!!

[malkie] 23/5/2007 14:35

relishing - excellent timing then.
I think the uranium story has progressed a bit from then.

Nice tick up, real spread is 4.68 - 5.5 not great, but this is still quite illiquid.

[hattori_hanzo] 23/5/2007 14:27

Coming to life again, but the spread is still a tad on the large side!

[relishing] 23/5/2007 14:11

I bought at 2p shortly after they (in fact JV partner ASX:WMT) announced the first very good grades in Tanzania, last Oct/Nov. So it was more than just licences. That's when it started moving up.

I see the spread's just improved here.

[malkie] 23/5/2007 14:09

how similar was URA @2p to ZNI now??

URA was just a bunch of licences then....as is ZNI today...

[relishing] 23/5/2007 11:21

"would you have bought URA when it was at 2p???"

Yes, and I did. Unfortunately I then sold at 3p.

Now they are listing on the ASX at a minimum of 8.5p/share equivalent.

[groats118] 23/5/2007 11:18

''Mr Lunt does not hold any shares in the Company but under the terms of his
service contract he is entitled to the grant of options over 350,000 ordinary
shares of 1p each in the Company, at a price of 10p per share. The options will
not be granted to Mr Lunt until the date being 6 months from the date of his
appointment at which point they can be exercisable at any time in the next three
years. A further announcement will be made at the time of granting of the
options.''

Options granted @ 10p, current price 4-5p. As a PI it's not something to get overly excited about, but it tells me the board are confident about a future return on that option price.

Quite like the look of this one, stick a few in the bottom drawer I think.

[malkie] 23/5/2007 11:17

News is interesting - a good qualified non exec should not cost much, but adds to credibility and skill set.

The thing about Uranium is that its red hot on ASX/TSX, yet only simmering on AIM.

Right the way across the spectrum everyone with Uranium assets is trying to maximise their value.

URA with a possible listing on ASX
VML with the same on TSX
RRR by reversing into ASX Retail Star

Just to mention a few on AIM

With Uranium right now its about realising some value going forward..

ZRL have hived off their Uranium assets to ZNI with exactly the same rational.

At these levels you have to ask what the next move will be.
Beefing up the board with a qualified individual is certainly a move in the right direction. May be they will also look for a dual listing??

BTW - would you have bought URA when it was at 2p???

[relishing] 23/5/2007 11:00

Interesting news. I guessed that risk just reduced.

[relishing] 23/5/2007 10:50

Sorry to hear that malkie - I hope you made a good profit.

I am only in from 6p so will be holding for some time yet!

Ok, this is probably worth a punt, but I suppose what I was saying was that it looks like there might be a few (major?) issues that could cause problems, so I would see it as higher risk for the time being, to high to bet the house on as you say. Whereas I might consider betting the house on URA (if I had one :)

[malkie] 23/5/2007 10:39

relishing - other than underlying commodity I cant see any direct comparison between this & URA. Not even implied.
Why would one need to choose between this & URA??

Certainly not going to get into a debate on such a situation, but at current market cap I feel its got a lot factored in for very little - in fact next to nothing.

And its quite an interesting story. they have raised £2m (£1m externally) at above current SP, which is not insignificant given their current status.

Yes of course they will need to raise further funds, its not unusual for prospectors, but its some way off an will no doubt be on the back of a positive business case - or it wont happen.

It may need some news flow to get it going at this point, but that's all.

Not bet the farm on it, but then I don't have a farm - just a nice little tickle to make it interesting & spread it around a bit.

FWIW - I sold my URA!

[tippingpoint] 23/5/2007 07:11

Only joking about the geology degree though

[bowlhead] 23/5/2007 07:10

You say that 2/3 is cash so the rest is basically thrown in for free.

But with a company at this early stage, all the cash is committed into these projects (or else will just drip away through expenses).

If you have a company valued at 3m, post placing, it's not like you can just take the cash out and the projects only cost you a million. Instead, you are buying a bunch of projects that are 3m funded.

Later on the 3m of projects will either turn out to be: a) worth nothing, or b) worth something if a massive amount of cash that the company doesn't have is invested. So, a number of placings that will dilute your ownership.

Probably not quite as simple as 'invest now while no-one else is here'.

[tippingpoint] 23/5/2007 06:41

I will shortly be starting my geology degree guys and will have detailed answers for you all shortly...

Actually I am reading into this a bit more to see whether to take a deeper stake here. For now lets not forget its not so much about the ifs and buts of the geology. If you had any value in for the geology, such as if the company were valued at £10mn, then maybe it would be more justified.

At the moment its about the tiny market cap, two thirds of which is cash together with a bundle of projects on uranium and nickel thrown in for free.

Ho hum.... IMHO

Have a great day

[relishing] 22/5/2007 23:13

Doesn't sound too promising, too many ifs and buts. Think i'll stick with URA as my premier small-cap uranium play for now.

[robin_of_loxley] 22/5/2007 23:01

tp,

does this mean, they may have it in the samples, but in that form they have no idea how to extract it?

"Physical separation testwork on a bulk 50 kg low grade sample suggested that
gravity separation alone is unable to effectively upgrade the uranium content of
the concentrate, due to the presence of significant quantities of magnetite and
haematite. Low intensity magnetic separation upgraded the concentrate slightly
by removal of iron-rich material to the magnetic fraction. Further work revealed
that quartz, haematite and magnetite comprise approximately 50% by volume of the
samples, and do not contain uranium. Methods of separating these minerals from
the uranium-bearing iron-titanium oxide phases, including heavy media separation
and radiometric sorting, are being investigated."

when they say investigate, are there already tried and tested production / separation techniques for uranium in this sort of ore, or this a problem that has not yet been solved by science?

regards,

RoL
>>>>>-------------------->

[robin_of_loxley] 22/5/2007 22:57

cheers hattori

[robin_of_loxley] 22/5/2007 22:57

lol tippingpoint, done ;-)

>>>>>>>>>---------------------------->

[hattori_hanzo] 22/5/2007 22:55

I bought a few ZNI today, but just a small punt to compliment my larger ZRL holding, ZNI has been under the radar and may now attract some hot money in the near term, but ZRL has probably got the better longer term prospects and is itself very undervalued, imho...and, of course, it owns a big chunk of ZNI.

[tippingpoint] 22/5/2007 22:32

Here is the very latest exploration news posted a couple of weeks ago by ZRL:

[malkie] 22/5/2007 22:14

Robin, Simple answer, very early stage and micro market cap, & placing of £2m above current share price - so its all is relative.

U. grades up to 6.4%???

To be honest I havent even looked at the Nickel properly yet.

As I said, toe in the water and watch the story unfold

[tippingpoint] 22/5/2007 22:12

RoL could you put the arrow there please on 7of 8, not sure I'm comfortable with it missing.

[tippingpoint] 22/5/2007 22:10

They need to spend $5mn over 2.5 years to get the 51% holding and can increase to 75% or above subject to additional conditions. They will need to raise additional cash I would guess around the end of 2008 (like the vast majority of explorers out there).

If this was valued at Enterprise Value £10mn, it would not have the same kind of investment advantage). But it's lost, unloved and until yesterday evening struggling to make headway.

The irony is that with the new management they were starting to rebuild nicely, but very short of cash.

In the space of one day they have now become a joint Uranium and Nickel explorer with some decent prospects, fully funded for the medium term and with supportive investors.

I am quite enthused as you can tell, but please DYOR etc it's all IMHO

BTW:

shares in issue 75mn

held by ZRL 37mn
other placing shares 20mn (I assume these have gone to an institutional or other long term holder as above mid price placement)
other inst holdings (as per results and not sold down) 7mn approx

free float estimated at 11mn shares 13% - these could be in short supply going forward