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QUOTE (tba42 @ Saturday 26/01/08 10:01pm)

Well I am happy to say that I doubled my position on Tuesday last week @.35.....was I happy and comfortable and did I ever harbour ANY doubt over that decision ......... http://www.sharescene.com/html/emoticons/biggrin.gif


If they wanna sell em to me at that level again I am more than happy to accomodate http://www.sharescene.com/html/emoticons/icon13.gif

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In reply to: woteva on Wednesday 30/01/08 01:38pm

I too have bought some more of these CHEAP CHIPS that will surely turn to GOLD!!!


My avg is now down to 48c...happy to hold long term, or s/term (T/O offer...LOL).


Accumulate now...as you might not get another chance. http://www.sharescene.com/html/emoticons/wink.gif

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I suppose the demise of View Resources can only be a good thing for CBH, as it reinforces the growing strength and potential of the c/o!!!


So many positives to speak of.....mainly going from one mine prod to a multi-mine, has $210 mil in cash, adding Copper to portfolio and soon will come GOLD.


T/O target ?


You bet !!! http://www.sharescene.com/html/emoticons/wink.gif

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In reply to: Zoe_Zelda on Wednesday 20/02/08 01:07pm

Yes ,the once under 40cents...CBH `will show better figures the next half year..as they are working in better grades..new ball mill to be installed and new mine in Broken Hill to be opened..its got growing pains but at present price must be cheap..could also be a T/O by PEM..so I heard...but if they are serious they must strike now as this SP for this producing miner is VERY CHEAP..I wonder

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In reply to: alaita13 on Wednesday 20/02/08 03:26pm

CBH's price has not been down long enough for a takeover to affect people's disposition to sell.


if the price does get cheaper then you will see the vultures eating up the shares that are up for sale. That may happen sooner than you think.



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In reply to: mercury on Wednesday 20/02/08 05:28pm

Here is the news article from the Cobar Age on Wed 20th Feb...


For the second time in less than a month, CBH Resources Ltd, owner and operator of Cobar�s Endeavor zinc, lead and silver mine, has been listed as a �stand out� performer with excellent potential for future growth.

A recent report published in a national business-wealth journal rated nickel miner Mincor and CBH as two mineral resource companies with rising production and expansion profiles well positioned to counter the impact of increasing interest rates.


�Capital expenditure by resources company�s is unlikely to pause, no matter how many times rates are hiked,� the report said.


�China wants our minerals so mine expansion projects are going ahead no matter what.


�Chinese growth may well come in at double-digits again this year with the World Bank predicted 9.6 per cent in 2008.�


According to the report, increasing interest rates will have little impact on mining companies with rising production profiles.


CBH Resources is included in the rising production category, which besides its Cobar operations at Endeavor, is developing the Rasp silver, lead mine at Broken Hill and the Panorama copper zinc project in Western Australia.


High grade gold and base metal mineralisation suitable for expansion include the Hera and Mineral Hill deposits south of Cobar plus several sites in Western Australia�s Panorama region.


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In reply to: Nova Star on Thursday 21/02/08 07:08am

CBH Resources 27 Feb, 2008

Corporate Action Looms

CBH; Buy up to 41 cents


CBH Resources and Perilya have confirmed that they are discussing a possible merger. There are a number of potentially significant synergies between the two zinc-lead-silver producers, particularly in relation to their respective Broken Hill assets.


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“A possible merger between CBH Resources and Perilya would unlock considerable value ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ providing a win-win situation for both groups of shareholders.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ


In an ASX release responding to media speculation, Perilya has noted that 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“Discussions regarding a potential merger between the two parties have taken place. These discussions are incomplete and have been expressed to be confidential. No formal agreement has been reached nor is such an agreement imminent or inevitable. The formal announcement of any binding transaction between Perilya and CBH would only take place once commercial terms are agreed and transaction documentation has been signed.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ


This follows an announcement in early February by Perilya that it had commenced a process of reviewing strategic options for maximizing shareholder value ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ including a review of corporate and operational activities. The objective is to refine the companyÃÆâ€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 growth strategy, to optimise the operational performance of its existing assets and pursue merger and acquisition opportunities that may result in corporate transactions.


Similarly, CBH has made a release stating that it 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“confirms that confidential discussions have been and are ongoing with Perilya Limited regarding a possible corporate transaction which centres on maximising the value of the respective GroupsÃÆâ€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’‚¢ Broken Hill operations. These discussions are incomplete and, if and when any agreement is reached, the market will be advised.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ


The obvious potential synergy between the companies is via combining their Broken Hill assets, where Perilya has excess processing capacity and CBH is developing a new mine, but is yet to commit to construction of its processing facilities.


PerilyaÃÆâ€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 processing plant at Broken Hill has a nominal capacity of around 2.8mtpa. However, its primary ore source is from the Southern Operations which produces 1.6-1.8mtpa of mill feed. Supplementary feed from the North Mine only contributes 0.1-0.2mtpa.


Additional satellite projects, such as Potosi, Flying Doctor, North Mine Deeps and Henry George, are potential future ore sources ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ although they are probably too small to allow the Broken Hill plant to operate at design capacity. Thus the plant is operating at a sub-optimal level, providing the potential for significant savings (as measured in terms of tonnes treated) if an alternative ore source can be accessed.


The Perilya operations surround CBHÃÆâ€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 Central Mining Lease at Broken Hill, where CBH is developing the Rasp underground mine. CBHÃÆâ€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 leases also contain remnant high grade ore positions within the historic workings. In addition there are a number of ore positions that are currently sterilised by boundary constraints.


The Rasp mine is scheduled to come into production in early 2009 at a rate of 0.75mtpa. However, CBH is yet to commence construction of the processing facilities, which would incur a capital cost of say $65m. This can occur once environmental approvals are finalised, which is anticipated in the near term.


The proposed Rasp processing facilities are substantially smaller than PerilyaÃÆâ€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 existing facilities, and would thus have a higher cost structure on a per tonne treated basis. Savings in the order of $10/t treated or $7.5mpa appear possible.


Earnings Update

We have updated the consensus earnings forecasts for CBH (at a share price of 40 cents) following the release of its interim profit results last week as follows:


Year Ending 30 June 2006 2007 2008F 2009F 2010F

Revenue (A$m) 86 269 267 317 424

EBIT ($m) 24 61 70 79 153

Net Profit after Tax ($m) -15 39 40 44 90

Net Debt 7 -22 58 172 150

EPS (cents) -2.8 5.1 5.4 5.3 11.0

P/E Ratio na 7.8 7.4 7.5 3.6

Dividend (cents) 0.5 ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 0.6 1.7 4.1

Dividend Yield 1.3% 0.0% 1.5% 4.3% 10.3%


Source: Bloomberg, Stock Resource


While the interim result was broadly in line with expectations, we note that these expectations were gradually reduced during 2007 due to the combination of lower than expected production at Endeavour, ongoing delays to the development schedule at Panorama and steadily weakening zinc prices. This was partially offset by rising lead prices.


The outlook in 2008 is for an improved production performance at Endeavor from mid year as higher grade stopes are accessed in the central portion of the mine and a new decline is commissioned, flat zinc prices, rising zinc smelter charges and continued strong lead prices.


In addition the company has relatively high capital expenditure requirements, which is being directed at optimising and expanding the Endeavour operations, as well as developing new operations at Panorama and Rasp (Broken Hill). In addition it has advanced assessment projects at Mineral Hill, Hera and Sorby Hills.


Discussion and Recommendation

Perilya and CBH have a number of similarities and synergies:


they are significant producers of lead and zinc concentrates

both currently have market capitalisations in the order of $350-$400m

their flagship operations (Broken Hill and Endeavour) have experienced operational challenges in recent years

both have significant net cash positions, but these will be utilised to fund their respective expansion and development plans

In addition, the combining of their assets in the Broken Hill area would save capital investment in a new processing facility and allow optimisation of the existing facility ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ saving both capital investment and reducing future processing costs (on a per tonne treated basis).


Combining the two companies appears compelling. It would unlock significant value at the Broken Hill operations, create a larger company that would be a stronger force in the mid-tier resource space, and would diversify risk for investors and financiers. However, the attitude of key shareholders is unknown. We note that Toho Zinc is a major shareholder of CBH, but that PerilyaÃÆâ€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 register no longer includes any of the major zinc smelting groups.


Sentiment issues have plagued CBH in recent years due to its failure to meet production targets. However, the company is inexpensive based on consensus earnings forecasts, has an improving operational outlook and has potential for corporate activity which could unlock value (for both CBH and Perilya), as well as possibly delivering a takeover premium. Hence Stock Resource recommends CBH as a Buy up to 41 cents for all Members.



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