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Share price is starting to head in the right direction. Everything you read about molybedum points to it being the next metal of choice, hence the price should stay up for the medium term. QOL offers exposure to a producing moly mine before the year is out and at this stage will be the only company to be able to offer this. Minor set back in timing but once green light is given there should be a steady stream of positive news to lift the share price higher and higher. Now is the opportunity to gain exposure while the share price has drifted lower, it is a real BUYING OPPORTUNITY especially before the financial year is out. If drilling proves that the system is indeed 3km in strike then resources could definitely be lifted in the 3Mt range which would extend the mine life and provide cash for QOL to expand. http://www.sharescene.com/html/emoticons/biggrin.gif
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Good progress on Mining Leases........unfortunately concerntrate is going to be pushed back into 2008 Q1. Getting the Mining Leases granted in October is the main priority as then at least work can on getting the mine into production. Even will slightly late concentrates, QOL will still me first into production with moly!!!! http://www.sharescene.com/html/emoticons/biggrin.gif
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In reply to: sylar on Monday 25/06/07 12:44pm

hey guys have had this one on my watchlist for a while now and have been buying small chunks here and there, hoping to get a decent position. But judging by the movement today on good volume the market is finally waking up to QOL.

 

It will be Australia's next Molybdenum and Tungsten

producer with mining to commence in the 4th quarter and first sales in the 1st quarter next year.

 

It has the jump on many other of the near term producers such as THR,PDM,VML.

 

 

So a look at QOL and its projects

 

 

Share Structure

 

Shares 138,381,153

Options 34,730,192

 

 

Market Cap

 

$58,857,857

 

 

 

Reasons to buy into QOL

 

- Exposure to hot commodities in Molybdenum/Tungsten

- 2 mining operations by early 2009

- Wolfram Camp mine already fully funded and due for production 4th Quarter 2007

- Mt Cannindah (copper/gold/silver) due to come online early 2009

- High potential for resource expansion in immediate proximity to producing mines.

- First in new breed of Molybdenum producers

- Will be generating profits in first year of production

- plenty of Shareprice upside due to stock re-rating as mine commencement gets closer.

- undemanding p/e of 1.5 based on current share price.

- top 50 shareholders control 57% of the company (thanks Shaun)

 

Wolfram Camp

 

Production to start late 2007, with first sales early 2008.

 

To produce on a yearly basis

 

- 229,000 lbs of molybdenum

- 41,820 metric tonnes (MTU) of Tungsten

 

Annual sales of $21 million

 

Costs of $9.3 million

 

Profit of $11.7 million

 

 

 

Mount Cannindah

 

Feasibility Study complete early 2008

First Ore 2nd quarter 2009

 

Yearly Production of

 

- 8200 tonnes copper

- 5950 oz gold

- 275,000 oz silver

 

Total sales of $67 million per yer

 

Profit of $27 million per year

 

 

 

With over 3km strike left to explore at Wolfram Camp, QOL believes that they will be able to tripple the current resources.

 

The two main projects above will keep QOL busy over the short term they have several other exciting prospects being Banford Hill and Triple Crown.

 

If you take the potential profit of $38 million from the two projects it leaves QOL with a fully diluted

 

EPS 22 cents

P/E 1.5

 

Shows how much potential upside there is with QOL if you use the standard P/E of 10 it would give you a share price of around

 

$2.26

 

I would like to add that I am not saying that QOL will reach $2.26 but this is used to highlight the potential of the company.

 

Also the commodity price used for the calculations are as follows

 

Molybdenum $25 per lb

Tungsten $250 per MTU

Copper $2.50 per lb

Gold $650 oz

Silver $10 oz

 

All of the above commodities are trading significantly higher than the price assumptions used by QOL, which could add even further upside to the company.

 

Below is part of an article from Far East Capital

 

Prospective Tungsten Producers

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Update Shows Qld Ores is Leading the Pack, Boosted by MolybdenumÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ

The Molybdenum Co-Product is Adding to the Appeal of Some ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦

Molybdenum Price Has Been Stremgthening: The tungsten market has been overshadowed by the

surge in molybdenum prices from US$25/lb in February to US$33.50/lb at the end of May.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ The market has woken up to the fact the non-corrosive qualities of molybdenum make it an

essential element in construction of pipelines for the oil industry and in nuclear power plants.

The problems with leaking oil pipelines, such as we have seen in the Alaskan pipeline, can be

avoided if molybdenum is used in the steel. Currently approximately 66% of the oil pipelines in

use have to be replaced as their steel doesnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t contain molybdenum.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ The desire for molybdenum amongst investors has been highlighted by the commissioning of a

new molybdenum investment fund by Sprott Asset Management in Canada.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ The value of molybdenum is highlighted by the observation that it has now reached the price that

uranium was fetching, two years ago.

Limited Molybdenum Entry Points: There is no direct entry into molybdenum production for

investors on the ASX at present.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ AustraliaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s first molybdenum producer will be Queensland Ores, due to commission its

mine at the end of 2007, or early 2008.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Two prospective tungsten producers have molybdenum as a co-product; Queensland Ores

and Thor Mining. Only Queensland Ores has a fully-funded development project.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Thor Mining is still in the pre-financing stage with no definite timetable for production, but

we do view it as a project of merit.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ There are a number of exploration companies with prospective molybdenum projects.

These will be covered in a report that we are currently working on. However, none of them

will be a producer in the short term ahead of Queensland Ores.

Debt Finance Difficult: Specialty metals projects, tungsten and molybdenum included, are very

difficult to debt finance due to the thin markets. Equity financing is essential. While there is merit

in seeking debt/quasi debt from end users or investment banks, as a means of minimising dilution,

these negotiations can lead to development delays and constrictions.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦ But Tungsten Prices Have Firmed Up As Well

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ The tungsten prices as quoted in the London Metals Bulletin, has remained strong. The price is

based on surveys of producers, consumers and traders. For the month of April, the average low

price was US$257/MTU. We have increased the price from US$220/MTU to US$250/MTU in

our spreadsheet, the lowest level it achieved in May.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ China is the largest consumer in the world. In the past it has subsidised mines, but the subsidy

levels have been diminishing and a number of mines have closed. Stockpiles are being drawn

down to satisfy demand so there is an expectation that prices will remain firm

 

 

Would be interested to hear peoples thoughts on the company.

 

Looks very good going forward likely to be heavily re-rated closer to the start of production

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Good Market Depth at this stage,

 

No. of Buyers at 0.35, with large(ish) order, should support price for awhile (if they stay true).

 

Talbot on board as No.1 holder speaks volumes.

 

(Interesting to note, Talbot onboard JMS ship as well!)

 

DYOR - I hold.

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It's worth taking a look at MOL's feasibility study which was released earlier this week. Granted their prospective project is signigicantly larger than QOL's W/Mo/Bi operation, there are some figures on operating costs and two sets of time-series forecasts for the Molybdenum price.

 

Working on a shorthand valuation model at present, will post when finished.

 

Z

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