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I'm not holding IGO but I expect all quality Nickel producers to become traders & brokers favourites again soon.


Nickel prices are looking very cheap currently imho.




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In reply to: LSM on Monday 24/01/05 07:01pm

By mechanised mining and backfilling rather than using air leg they have a good chance of getting more produced ore "outside the reserves" IMHO.

I am just going to put these shares in the bottom draw for 6 months the market will pick up on it with $18 million in the bank, i just hope they dont go out buying into other companys.

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Ferret gave it a mention this morning. A P/E of 3 that is amazing...surely it must climb?.....


The sharemarket boom seems to have done nothing for


A year ago the nickel miner was $1.23.

Yesterday it was $1.14, up 2c on the day, after issuing a

quarterly report.

We thought the report looked pretty good with Independence

achieving record production and record low operating costs.

Profit was also a record with after-tax EPS of 14.5c a share,

or 11.2c fully diluted.

At this rate it's earning better than 40c a shares for the full

year, which would put the stock on a low p/e of less than 3 (the market

average is more than 13).

The company paid an inaugural 5c fully franked dividend in

December 2004.

Directors believe this level is sustainable for the current

life of the mine.

"The board will monitor dividend levels to ensure that other

investment opportunities are able to be pursued which may generate

increased returns to shareholders," they said.






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I remember a few months ago when MGX was 13.5 cents and everyone said "there must be something they are not telling us for it to be so cheap with a PE of 2 now its 44 cents and everyone is saying it is such a great company,.

No one wanted to get on the bandwagon at 13.5 at the bottom of the hill now everyone is on it and it as it gets ready to roll down the other side. Same happened with AVL at 11 cents (now AVM) ZIM @ 1.10 and CSM when it was 57 cents.

Forget your friggen charting guys look at the potential PE balanced by NPV on slumbering companies no one is interested in.

So far it seems this market is very easy to make big money in, the reverse also applies some guys are still doing very well shorting companiies even in this environment taking advantage of irrational exuberance.

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In reply to: hayboys on Tuesday 25/01/05 09:06am

I agree, Hayboys.



IGO must get re-rated soon! I wonder what will be the catalyst.


I have just got off the phone after speaking my my daughter's boyfriend. He has just enrolled in a Securites course and his first subject is on stock valuation. I suggested he use IGO as a test example when he gets into his subject.


The fundamentals are so strong that anyone on the street who knows nothing about shares or business must recognise it's a buy.


From memory, and this is rough, IGO is capitalised at $100m after you remove their cash in the bank. This quarter, they reported $13.5m cashflow - - there is no reason why they can't repeat that for the next four quarters if nickel holds up and the aussie dollar is reasonably stable. That's $54m! You're talking about cashflow reporesenting half the total value of the company now after just 2005's amount of production.


But wait! There's more. The mine is supposed to last until at least 2011

-- and the are exploring for more all the time. The mine closing at 2011 has got to be conservative.


And management is good- - I've seen the guy present, and I've seen lots of other MDS present. Chris Bonwick is special. he's passionate, driven, talented. You should see the other guys!


I read that broker report that CDCHI posted where the broker upped his value to $1.46. Why just $1.46? We're talking about a company, that if, just for this exercise, it hedged its production in australian dollars, could make $350m dollars in operating cashflow in 7 years.


Who wouldn't give someone $100,000 today knowing for sure they'd give you back in dribs and drabs $350,000 over the next seven years? Plus the promise of bonus payments.


I know it's not as simple as I'm presenting, but it just about is!


The best thing about IGO as an investment today is that it's been a bargain for over a year now, gradually increasing in intrinsic value while at the same time seeing its share price track sideways. That is excellent news, as that sideways, going-nowhere chart means that one day some courageous fund or broker will stick their neck out and get the ball rolling and then - -whoosh!!!


IGO has been making a fool out of me for ages now, but I think common sense has got to kick in to the market soon. No evidence of that today though.


I wish these management boards had a better appreciation and respect for their own company's worth. Their $11m spent on MRX would have been better spent soaking up more of their own shares. it would have been a near-zero risk, hugely profitable investment.


And what's wrong with these so-called professional fund managers trained in stock valuation? Why can't they see what we are seeing?


Perhaps we should all put together a list of reasons why IGO is a dog share and that no self-respecting fund or private investor should buy it. Maybe we ARE missing something!


Cheers Anne







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In reply to: anne on Tuesday 25/01/05 09:21pm

Hi Anne

Its a darn good result I am sure your patience with this will be rewarded. The way I look at it and I may be wrong is:

THe company has a cap diluted close to $120 M . But like you said they have around 24 M in receivables and cash at present plus around 15M in JVs and shares in MRX et al. MRX cost IGO around 12 M to get 20% of the company but MRX has a cap of 43 M with 20M in cash something people dont seem to appreciate is the cash!


I have trouble working with cashflow as it can be to optamistic and have been burnt several times using that result from companies covering up an actual loss, however the after tax profit of 7.7 M is the figure I look at and it is very good, the advantage with that as your son will find out is if the company made a loss in a previous year tax credits carried forward can be applied and the dividends if any can be fully franked not the case here I bought to late,


I imagine IGO was looking at MRX from a different perspective from us we want short term gain and they want to prove their new little exploration toy which they have been playing with with good success.

The long south decline they are progressing with which will be about a kilometre long and big enough to drive the trucks in is in a southerly direction at a slight downward slope from the base of the main ore body it will allow for further exploration with holes drilled at abut 80 M centres vertically down so in they should be able to move along at about 50 metres a month. They also have another exploration target called victor south which has potential.

The last quarter showed 20%of the ore mined was outside reserve if they continue like that even without exploration success they add an additional year to the mines life.


The best part of this company is operational costs are very low probably in the lowest quartile of Ni miners so they can continue operating when others go BK its the main reason i exited FXR

Low OPEX makes it easy to sleep

Your son in law should like that valuation course I did forestry/commercial realestate and farm valuations as a major for my bachelors and now use it on the ASX for mines same principles apply except you can be burnt trying to use comparables, for valuing, a npv basis seems best IMHO providing its combined with a sensativity analysis something that is lacking from many broker reports as the prices we are getting now are not going to last for ever.

Good luck



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Hayboys and Anne,


Great posts, makes my job easier http://www.ShareScene.com/html/emoticons/lmaosmiley.gif


Anne I did the Grad Dip in applied finance and investment at Securities course so I assume he is doing the subject 'Industrial equity analysis'. A tough subject for people not involved in the industry...as I found out.


But IGO should be a good company to work with...though if he;s requested to explain non--performance of the co, i think he will have as much luck as I have had http://www.ShareScene.com/html/emoticons/laughingsmiley.gif


Its all good with IGO...it is undercapped on Long alone in my opinion, even if nickel prices did fall.


Ad as Hayboyus said, and as I've said before, MRX may look like a bad purchse, but I'm poretty confident IGO will make the kncokers look like dimwits re MRX in the future.


Remember Long was supposed to be a dead in the water mine, and after IGO took it, noone showed much interest...and the 'experts' knocked the purchase. How wrong they were!!!


The press covereage it got was disappointing, even the press are ignoring it...JBM posts a slip in production and it gets a full article...IGO gets didly squat.





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