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MAK, MINEMAKERS LIMITED
Sidesalad
post Posted: Nov 30 2010, 08:23 PM
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Hi all,

In addition to the Intersuisse valuation of $1.74, in today's Melbourne Herald Sun, John Beveridge discusses Minemakers p30 and backs up the Intersuisse reports, he makes it a spec buy. The premise of his article is that shares like MAK have hidden value, in MAK's case the companies main asset values the share; however, the rest of the company is running for nothing. I tried to get the link...alas I couldn't.

SS

 
triage
post Posted: Nov 11 2010, 08:42 PM
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In Reply To: triage's post @ Nov 11 2010, 04:09 PM

On rereading today's announcement by MAK about the BCD I realise that I misread the bit about one of MAK senior execs resigning. Neville Bergin has resigned from the BCD board, not from MAK as I indicated in my previous post. My mistake, apologies for any confusion caused.

So the way I read it now is that MAK has already lent BCD $8.5m which presumably has allowed BCD to pay back the $8m it had borrowed from Bendigo Mining. Remember that this "opportunity" for MAK came about when Bendigo Mining all of a sudden pulled out of a merger deal with BCD (presumably because its due diligence had uncovered something rotten about BCD). The big question for me remains is whether MAK failed to ask the right questions of BCD about why Bendigo Mining pulled out or is this an act of corporate bastardry by MAK to acquire from BCD shareholders the assets of BCD on the cheap. Either way this BCD thing has been a major distraction imo.

And either way I've about had a gutful of the adventures and travails of Mr Andrew Drummond.

Duster - thanks for the KRB pointer. I see they have some high quality phosphate but have a break even price of $130 per tonne which is better than MAK's NT project but far higher than MAK's Namibian project, and they look to be a couple of years away from production. I'll keep it on my watchlist for the time being. Cheers.





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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
Duster
post Posted: Nov 11 2010, 04:12 PM
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In Reply To: triage's post @ Nov 11 2010, 04:09 PM

Hi triage,

QUOTE
there are so few stocks on the ASX with exposure to fertiliser


KRB may be worth a look. Very tightly held, with only 62 mil shares on issue, having a MC of around $15.5 mil.

http://www.kruciblemetals.com.au/

Duster



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Patience is the key to success.

Said 'Thanks' for this post: triage  
 
triage
post Posted: Nov 11 2010, 04:09 PM
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As Barry Ritholtz might say, my spidey sense is all atingle regarding this crowd.

Today they released their scoping study on the Namibian underwater phosphate project and at face value this project appears to crap all over their project in the Northern Territory: the African operating costs are US$58 per tonne whilst the NT operating costs are A$120 per tonne. Just going on that metric the Namibian project appears to be commercially viable whilst the NT project is at best marginal.

MAK own about 42.5% of the Namibian project and own 14% (?) of the other crowd with a 42.5% holding (I think the local government has the balance) so MAK effectively owns slightly short of half the project. From memory the "other crowd", Union Resources (UCL), fought off an attempt by MAK to take them over but UCL currently appears to be a mess. They recently raised $0.5m for working capital through convertible notes that can be converted to shares at half a cent per share for 100m new shares. They already have 1.8 billion shares on issue and their cash burn of about $300,000 per quarter seems mostly spent on looking after the officer bearers. Before the announcement the UCL shares were trading at about 6 cents a share but they've bounced up to 8 cents on the news. I may be totally wrong here but I suspect that UCL would be one of the worst outfits to be in a jv with that you want to get moving.

Meanwhile what the hell is going on with the Beaconfield (BCD) deal?!? As recently as a month ago they were going to fund BCD to the tune of $15m in convertible notes which effectively had them taking two thirds of the registry. Now after sinking $8m of loans into BCD they say that they have discovered something materially wrong with BCD financials and that BCD has until cob next Monday to make good with the $8m or MAK will call in the accountants. The relevant MAK manager has also resigned. Now I see two possibilities here. Either the board did a $15m deal based on the say-so of one of its managers and now realise why they should have carried out their own due diligence, or, all along they have coveted the assets of BCD and they have found that they can get them for $8m rather than the $15m they initially agreed to. In the second scenario I would think that the relevant MAK manager resigned as he had been working in good faith to do the right thing for BCD shareholders as well as for MAK. If the first scenario is close to reality it would appear that the MAK board could be incompetent, and in the second scenario it would appear that the MAK board could be plain untrustworthy. Given that one of the MAK directors appeared to be the driving force in the BCD deal on balance I suspect that the relevant manager may have walked out on principle.

And in any case what the hell was MAK doing lending $15m to a one-legged dog of a company like BCD when the figures on the Namibian project were looking so good? $15m would have allowed MAK to buy out UCL, or would have allowed MAK to pay a fair chunk of the capital costs for the Namibian project (which unlike the NT phosphate project and BCD's Beaconsfield mine is commercially viable).

Too many unknowns with MAK for me (but there are so few stocks on the ASX with exposure to fertiliser). weirdsmiley.gif



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
mme
post Posted: Oct 14 2010, 01:55 PM
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In Reply To: swandc's post @ Oct 14 2010, 01:48 PM

Yep if they can't make money now they're in trouble. Having said that as pointed out BERGIN has joined the team and appears well credentialed: biggrin.gif

Neville Keith Bergin BSc., ACSM; Dip CSM has been General Manager of Projects Development at Minemakers Ltd. since August 21, 2008. Mr. Bergin has been Vice President and Head of Australian operations of Gold Fields Ltd since July 13, 2006. He served as Divisional General Manager of Operations and Projects at Xstrata Nickel Australasia Pty. Ltd. and its General Manager of Projects Division since February 2003. Mr. Bergin joined Jubilee as Resident Manager at the Cosmos ... Nickel Project in July 2000. He has over 25 years experience in the mining industry with the last 16 years in senior operational, and more recently, corporate roles. He served as a Non-Executive Director of Northern Star Resources Ltd. from April 14, 2004 to June 16, 2006. Mr. Bergin is a Member of the Australasian Institute of Mining and Metallurgy (Al/S/MM).

 
swandc
post Posted: Oct 14 2010, 01:48 PM
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In Reply To: triage's post @ Oct 14 2010, 10:54 AM

Had a quick glance over BCD's last activities report .... terribly run company!!! they've been mining 4.5g tonne and saying they're going backwards because they're not in the high grade yet (ie saying 4.5 g/t is low grade!!) and justifying the $1600 odd / ounce cost due to this low grade. There are gold mines in Aus that would kill to be mining 4.5g/t, if they can't make money out of 4.5 g/t then the first thing that should be done is management should be replaced and a major look at costs undertaken, just my opinion.



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Do your own research, nothing posted here is financial advice either given or implied but merely a personal opinion and more often than not wishful thinking :)
 

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mme
post Posted: Oct 14 2010, 01:48 PM
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In Reply To: triage's post @ Oct 14 2010, 10:54 AM

I actually think they did well. Really never followed BCD but just had a look at the most recent quarterly. Cash costs are high but anticipated as they did from the previous quarter that they will come down with their lower cost mining method. 2 cents a share is pretty impressive in my way of thinking.

If gold prices maintain their current levels or go higher it looks like BCD and MAK could turn at to be alright in 2011. biggrin.gif

 
triage
post Posted: Oct 14 2010, 10:54 AM
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Not sure which was the more miraculous rescue: the one of the miners in Chile or the one by Minemakers of the company that extracted a couple of miners from a similar predicament a while back...

MAK has fronted up with $15m to keep the wolves away from the door of Beaconsfield (BCD). Iniitally the dough will be in the form of a loan but MAK has the option of converting this into equity at 2 cents a share for about two thirds ownership of the gold miner. Seeing that BCD was last trading at 18 cents a share this appears at first blush to be a screaming bargain for MAK shareholders and a massive dilution for BCD shareholders. The big question of course is whether MAK is simply throwing good money after bad: if BCD is a dog then all MAK has done is jumped ahead of the existing shareholders in being able to claim any returns from a liquidation process. But if BCD is a dog then this action by MAK may end up being no more than a unwanted diversion of funds and management time.

MAK has justified the action as a sort of backdoor listing vehicle for its non-phosphate assets, from memory they have tin and tungsten prospects in Tasmania. I dunno what to think here. It could be a smart opportunistic play by MAK's management. But there seems to be a pattern of them getting easily distracted by the next screaming deal. It is almost as if Andrew Drummond sees MAK as a vehicle to go out chasing stray dogs.

One positive facet to the deal is that apparently one of the MAK directors has some good form on the board at running gold companies and he is the one that has been tasked with getting in and sorting out BCD (it may be that he is the one that realised that the break-up between BCD and its previous suitor (BGD?) was a opportunity too good to pass up on (?)).



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

Said 'Thanks' for this post: walbrook  
 
arty
post Posted: Aug 30 2010, 11:29 AM
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MAK has had a great run since the beginning of this FY;
after a decent retracement to Fib 61.8%, it seems to be rebouncing for another go at 36c resistance.
If it stalls there, I'll be up about 15%; if it suceeds to break higher, the more the better smile.gif
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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
Commander C
post Posted: Jun 3 2010, 08:02 PM
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In Reply To: denpal's post @ Jun 2 2010, 03:32 PM

I wish they would hurry up and start drilling again --- finding more high grade resources and converting Inferred into Indicated, has got to be the value driver this half year.

Am more than peeved they haven't ramped up drilling with multiple rigs last year, and we wouldn't be in the situation we are in now, instead we could have been in the situation of "10 year base case, upside to 30 years"

 
 


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