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IGO - IGO LIMITED


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IN REPLY TO A POST BY toline, Fri 16/01/04 09:54am   [READ POST]

Hi anyone have info on this one?

Strong recommendation report out by Warwick Grigour at Far East Capital

Worth downloading to read

Basically says it will be trading at a pe of 2 to 3

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IN REPLY TO A POST BY rex, Sat 21/02/04 03:02pm   [READ POST]


Strong recommendation report out by Warwick Grigour at Far East Capital
Worth downloading to read
Basically says it will be trading at a pe of 2 to 3

so ar its on an annualised PE of 6...but that was with a sept quarter without the nickel price hike...if u want nickel exposuere this is the one to be in (and ive been saying that since 30c and i will keep saying it). See my posts on other boards for more info, or download warwicks report at www.fareastcapital.com as per previous post.

 

PS: They are presenting at RIU conference in WA this week, expect some interest after it. When they presented last june, price rose 20% right after.

 

Cdchi1

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IN REPLY TO A POST BY cdchi1, Mon 23/02/04 06:01pm   [READ POST]


so ar its on an annualised PE of 6...but that was with a sept quarter without the nickel price hike...if u want nickel exposuere this is the one to be in (and ive been saying that since 30c and i will keep saying it). See my posts on other boards for more info, or download warwicks report at www.fareastcapital.com as per previous post.

PS: They are presenting at RIU conference in WA this week, expect some interest after it. When they presented last june, price rose 20% right after.

Cdchi1

PResetnation now available on their website. HEre is a quik summary:

 

- My Broker's description: fantastic

- AFTER tax Dec half profit: 9.5 mill

- Cash costs (b4 depn): $3.04AU per lb ni

- Budget exceeded every quarter so far

- only 1 Lost time incident (very important stat and underestimated)

- Excellent summary of the technologies they are using

- note that reserve grade has increased to 4%, so they are raising the bar for themselves

- Reserves at June 03 is 27300t which is more than at start...i note that end of dec qtr, i believe reserves are still around 26000t

- Actual resources is second highest on market, slightly behind MCR (85000 vs 82000)...but people should note the higher grade resource of IGO, hence more profitable per lb.

- Grades at victor south shown...very JBM style, commonly over 10%...this will be HUGELY profitable (reserves 5900t, resources 20800t). Lets not forge tthe recent ann though with ni being hit around 60m from VS...

- Goal ni prod is 9500t (prob 3rd qtr this year will ramp to that amount)

- Tropicana took up 3 pages, so obviously still in the picture....(i estimate around a 50/50 chance of it being a deposit of substance)

- Good coverage of other exploration projects

- 04/05 positive cash flow prediction: 40 million plus (at ni price of 19000AU)

- 6% of shareholders are overseas (quite high)

 

Cdchi1

 

 

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Updated my IGO PE analysis spreadsheet.

 

Conservative view taken...as you'll note when you see the profit result for this year.

 

Expanded to 2010, increased production for next 2 fin years, (As per quarterly), and removed hedging from 2006 onwards. New XR and forecast nickel price as well.

 

If anyone wants it, email at cdchi2@ihug.com.au

 

Cdchi1

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below my post to HC:

 

imo a great buying opportunity (regardless of what nickel price does in short term).

 

A new broker report out today comparing 5 mid caps nickel stocks, 4 producers and a imminent producer.

 

IGO and REM were the clear recommendations of the report. I only hold IGO but will take a look at REM.

 

The other 3 were stated as fair value.

 

And it wasnt one of your run of the mill reports, a great fundamnetal analysis.

 

Happier then ever with my huge holding in this and the one stock i have no reservations about saying GET SOME, even if nickel price was $4USlb. As some of you know my other posts on other stocks (incl others i hold) are quite positive but cautious...not so with IGO which ive held since the 30s and will continue to hold till the 300s(cents that is).

 

Who can argue with a forecasted 40 million profit pre tax) for next fin year (or 36 million AFTER tax as forcast y todays report).

 

I've had a few people email me with concerns about their 11 mill project debt...well they have enough cash to pay it off now if they wanted, and lets not forget the 5 mill or so they will get from exercise of the listed options. The debt is a non-issue and in fact a handy thing giving them a bank willing to extend further debt incase a great opportunity comes along!

 

Cdchi1

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An interesting article on IGO from www.minesite.com. Something a bit new:

 

Date : March 11, 2004

 

 

 

Independence Group Switches On Its Torch.

 

By Our Man in Oz.

 

Spending US$150,000 to find nickel worth close to US$40 million sounds a bit like a geologist’s dream. But, for Chris Bonwick and his team at Independence Group the dream has turned real thanks to a trolley-mounted electromagnetic tool which is enabling them to “see through” the walls of old mine workings in the Kambalda region of Western Australia. Convinced he is on a winner, Bonwick is proposing to rent out the device in exchange for equity in other base metal projects.

 

So far, there are no takers. Perhaps because Bonwick is believed to be asking for a minimum 10 per cent free-carried interest in metal discovered by the use of the device, known as the Torch – but more probably because the mining world is yet to be convinced that Independence really has produced a breakthrough in the use of EM.

 

Whatever the reason, Bonwick is relaxed. He has year’s of work ahead for the Torch in the Long and Victor nickel mines which Independence acquired from WMC in mid-2002 for A$15 million to become one of the early movers on the great Kambalda mine sale which WMC expects to complete in the next few days with the disposal of the Lanfranchi mine.

 

“WMC worked Long and Victor for 20 years,” Bonwick told Minesite. “There are hundreds of tunnels and drives for us to explore, and that’s just what we propose to do, put the Torch down every tunnel and drive in the mine.

 

Understanding how the Torch works, and how Bonwick can claim that it has discovered US$40 million worth of nickel, is not hard. EM is a well-proven science, useful in identifying highly conductive rocks, the stuff which is normally the most heavily mineralised. Airborne EM provides a broad-brush look at the landscape and what lies at depth. Downhole EM, which involves lowering a tool which emits an electromagnetic pulse from inside a drill hole, is more fine-tuned application.

 

What Independence has done, led by WMC’s former chief geophysicist, Peter Williams, is put an EM machine on a trolley (to make it highly portable), designed it to run off 12-volt batteries and written some very fancy computer software to eliminate background “noise” found in a working mine. A lot of the early work on the Torch took place during WMC’s time at Kambalda because it too was looking for a way of better identifying metal-rich targets rather than sometimes digging blind, and without success, as underground miners chased the twisting, pinching and swelling nickel orebodies.

 

The best example so far is in the Long mine where the Torch was able to identify an area of high conductivity a matter of metres to the west of the orebody being worked. Follow-up drilling showed that the second structure, virtually a look-alike of the original orebody, was just metres away from existing workings. It could not be seen from within the mine workings, would never have been picked up by surface EM, and was so close to the known structure that surface drilling would probably have missed it. Bonwick estimates that this single discovery contains more than US$9 million worth of metal.

 

Williams describes the Torch as “a large metal detector” which is living up to its theoretical promise of being able to pinpoint highly conductive material because of the way it responds to pulses of electricity. “The real benefit is that it saves us a fortune in drilling costs,” Williams said. “It enables more accurate mine design, and makes sure that we don’t miss blocks of ore, which can be quite easy to do in a region like Kambalda.”

 

Bonwick, when asked to identify exactly what the Torch has so far found, answers in tonnes. He names three blocks of ore, one containing 750 tonnes of nickel metal, another with 500 tonnes, and a third with 1500 tonnes. At the latest London Metal Exchange nickel price of US$14,735 those 2750 tonnes of nickel are worth US$40.5 million.

 

More importantly, the nickel found by the Torch is “new” metal. It was not included in the purchase price of the mine, a reason why Independence is actually adding to its nickel inventory rather than eating into it at the current annual production rate of 5,300 tonnes. At the re-start of mining at Long/Victor, Independence had a resource of 69,000 tonnes of nickel. By June last year, it had 82,700 tonnes, with 27,300 in the reserve category and an objective of being able to upgrade sufficient resource to claim a minimum of 50,000 tonnes of reserve.

 

That target should not prove to be too difficult, provided the nickel price stays high. Independence has outlined at least 10 exploration target areas, most simply at-depth extensions of the known orebodies, and some following up old drill intersections in the WMC data base inherited with the purchase of the mine.

 

The question for investors with an appetite for nickel is whether the production profile of Independence, its exploration potential and the technical breakthrough claimed for the Torch is already factored into the company’s share price. Over the past 12-months, the stock has risen from a low of A31.5c to a high of A$1.49, but has slipped back to A$1.19 on weakening nickel prices. At its latest price, the company is valued by the market at A$85 million, an untaxing number given a profit forecast for the year to June 30 of around A$20 million, and the same again for at least three years. In PE (price/earnings) terms, Independence is trading on a somewhat lowly ratio of 4.5, a comment on how the market sees both the nickel price and the Long/Victor life-of-mine – views that might have to be adjusted as the company’s EM device continues to trundle around the old WMC workings, and if it finds more nickel.

 

 

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