VML - Vital Metals

[CanOz]

Searched for this but could not find a thread. Nice uptrend and it may be a good time to take a position depending on Mondays action. Any other comments on this one?

Cheers,

 

[danc]

Nice up trend back then, bdy nice up trend now. Day week an mth charts, close day line charts, point and figure charts all tell the same story and plenty of vol up its tail.

 

[jman2007]

Lol, not much action on this thread lately!

This companies presentation was one that impressed me at the RIU 2008 Explorers Conference in Fremantle WA recently.

Flagship Project: Watershed tungsten project
12 month high: approx 98c
current price: 53.5c

VML have been aggressively drilling out their Watershed project in QLD, and announced a maiden JORC resource in June 07 21.8Mt at 0.26% WO3 for 56,000t (indicated and inferred) of contained WO3. While modest in grade, if Watershed goes ahead it will be a significant global producer and will account for 6% of global production. VML are confident that mine life will be in excess of 10 yrs. Significant exploration has been continuing in the meantime, with a new resource due in April 08.

Labour supply should not be a major issue, with the proposed mine located less than 100km from Mareeba. 132kV power supply from main road, 23km away. Feasibilty study due to be completed Aug 08, with production scheduled for late 2009/2010. The capital structure is quite tight, with 106M shares on issue and the company is reasonably well funded with $7.5M cash on hand. VML also have two other prospective, if less advanced, projects prospective for tungsten and moly in WA, Mt Alexander and Mt Mulgine.

Strengths:
- Targeting a relatively straight forward open pit design.
- Reasonably straight forward geology, ore hosted in a series of steeply plunging vein 'swarms'.
- Market reserach carried out by VML indicate tungsten supply will continue to remain tight, due to curtailing supply from China.
- Recent forecasts indicate tungsten prices set to exceed US $300/MTU.
- Metallurgical and optimisation studies well advanced.
- Native Title negotiations well advanced.

Weaknesses:
- Modest grade.
- Thin international market for their product.
- Extreme difficulty in obtaining finance for specialty metals projects, for the abovementioned reason.
- Debt financing from end-users such as banks while creating less dilution for shareholders, can lead to construction delays and restrictions.
- Commodity risk if tungsten price falls.

Verdict:
Have we found the floor at approx 53c?...not being a t/a myself, would require some input from other members. If debt financing proves difficult, VML may look for a JV partner to help fund offtake. In all cases, moly and tunsten projects in Australia have been hit by delays across the board, although VML are advancing their project at a decent rate, and imo the outlook appears promising, I think I'll place them on my watchlist!

Additional feedback very welcome.

Cheers
jman

 

[4fundamentals]

Hi!,

I just took a position in this stock based on purely fundamentals.

I have been watching this stock quite closely and kicking myself every day it went up.

I have a short term target price of $0.16. I bought in at $0.082

Just wondering if there is any Techie's out there that could give me there thoughts?

Cheers.

 

[Golf 16]

Hi!,

I just took a position in this stock based on purely fundamentals.

I have been watching this stock quite closely and kicking myself every day it went up.

I have a short term target price of $0.16. I bought in at $0.082

Just wondering if there is any Techie's out there that could give me there thoughts?

Cheers.

Not really a techie but I am happy to post a chart and ask for comments and contributions.
Very little has happened to the SP following the flurry of activity when VML recommenced trading on 1 May. It was suspended for nearly 2 1/2 months!! After it settled down the SP has been pretty flat and very little volume. There has been plenty of activity in the last 5 days. You can see, volume is at or above the SMA (50) and a significant upturn in the MACD and the RSI has occured. MACD has broken through 0.0 and the divergence is positive. The RSI after many weeks of <50 is now >50 but not yet in overbought territory. Both of these seem favourable for an upturn in the SP, however I have no evidence or information upon which to base a 'target price'. I wonder if you could share your insight behind stating 16 c as a short term target price?
I do hold this stock but it has performed well 'under par'.
Cheers
Golf.

 

[4fundamentals]

Wow, Alot of fantastic info there. Thank you very much for your insight.

As of the 30 June 2009 VML has approximately on issue 133,819,777 shares.

Based on 2008 Financial Statements Net Total Assets: $24.7 Million.

This gives NTA/Share: $0.1829

This is probably my favorite indicator for "value".

I am a value based fundamental investor. Naturally I am not a day trader. I will hold a stock for a period of 3-8 months and perhaps longer.

Essentially, my other indication of Share Price movements is my expectation of Tungsten prices within the next 6-12 months.

Here is a Tungsten Price Chart which displays tungsten prices well below the required US$200/mtu.

http://www.asianmetal.com/metal_pri...OB▲China&PriceUnit=USD/mtu&startdate=2008-8-5

I believe for the Watershed Project to be viable Tungsten prices must rise above US$200/mtu.

Here is a report on Tungsten:-

http://www.asianmetal.com/report/en/2008wu_en.pdf
(read page 13 of 14).

In addition during 2007 and 2008 China has begun to impose export duties on Tungsten products. I believe that China values Tungsten and wants to protect this resource.

Anyway, these are some of my thoughts.

Cheers,

Boh

 

[lazyfish]

Wow, Alot of fantastic info there. Thank you very much for your insight.

As of the 30 June 2009 VML has approximately on issue 133,819,777 shares.

Based on 2008 Financial Statements Net Total Assets: $24.7 Million.

This gives NTA/Share: $0.1829

This is probably my favorite indicator for "value".

I am a value based fundamental investor. Naturally I am not a day trader. I will hold a stock for a period of 3-8 months and perhaps longer.

Essentially, my other indication of Share Price movements is my expectation of Tungsten prices within the next 6-12 months.

Here is a Tungsten Price Chart which displays tungsten prices well below the required US$200/mtu.

http://www.asianmetal.com/metal_pri...OB▲China&PriceUnit=USD/mtu&startdate=2008-8-5

I believe for the Watershed Project to be viable Tungsten prices must rise above US$200/mtu.

Here is a report on Tungsten:-

http://www.asianmetal.com/report/en/2008wu_en.pdf
(read page 13 of 14).

In addition during 2007 and 2008 China has begun to impose export duties on Tungsten products. I believe that China values Tungsten and wants to protect this resource.

Anyway, these are some of my thoughts.

Cheers,

Boh

I noticed that you mentioned 'value' a few times on several threads. Like you I go by fundamentals and do not day trade, so to speak. But I am not comfortable using net assets for mining companies because exploration and development costs are often capitalised, i.e. included as (intangible) asset, and it is often a very large sum. Whether these costs are justified can be very subjective. These costs are tested against impairment, which again, is very subjective. In the case of VML, $15.8 was recorded as impairment from exploration and evaluation in the half year financial report, bringing the net asset down from 24.9M in June 2008 to 8.3M in Dec 2008 (See half year report on 01 May 2009, note 3)

The second problem is that during fire sale, assets such as plants go for next to nothing. For example, the Hellyer mill was sold at under 2M when the owner went bust, while it has an estimated replacement cost of 100M (not sure how much was carried on book).

 

[4fundamentals]

LuckyFish,

You are probably right, you may have a much better valuation method then I do.

I didn't say that I was a pro or anything like that I just thought there was some value within Vita Metals at the time, which, at the time was trading at $0.08 or something like that.

I was an idiot and sold out at $0.09 making a very small and meaningless profit. VML is now at $.11, it just goes to show I should stick by my valuation.

Thanks for your insight.

 

[springhill]

MC - $8.5m
SP - 3.5c
Shares - 241m
Options - NQ
Cash - $440k (+$3m funding facility)

JUNE QUARTER HIGHLIGHTS
Watershed Tungsten Project, Queensland
● Confidence in Watershed mineral resource estimate increased following completion of updated Independent resource estimate which has been classified and reported using JORC Code and Guidelines.
● Measured, Indicated and Inferred Resources now total 20.6Mt at 0.25% WO3 for 50,700 tonnes WO3 at a 0.10% WO3 cut off.
● Metallurgical test work progressing towards completion by end of Q3 2012.
● Project Environmental Management Plan submitted to the Department of Environment and Heritage Protection and undergoing assessment.

The following provides a summary of achievements and progress during the quarter:
 The Environmental Management Plan was submitted to the Department of
Environment and Heritage Protection (DEHP) towards the end of June. The
Department has acknowledged receipt of the document and advised that the
first comments will likely be received towards the end of July;
 Optimisation of the gravity program (G+F) which involves the last stages of sulphide flotation and magnetic separation is almost complete. The program has been delayed by slow laboratory turn-around and an extended program of optimisation based on continual up-date of results. It is anticipated that the program will be completed by September;
 WOO flotation work underway at GZRINM in China is progressing well with the work moving beyond the rougher stages into optimising the cleaner stages to produce a clean 65% WO3 concentrate. The program remains on budget and on track for completion in September;
 CONSULMET, a specialised technology company serving the mining industry in Europe, Africa and Australia has been commissioned to undertake the design and cost assessment of the two process options (G+F and WOO). Preliminary front-end design has commenced on the G+F processing option with indicative process plant design layout, process flow diagrams, process & instrumentation drawings and inclusive of equipment and power requirements, costs and overall design criteria. Completion of this work is on track for the end of September and the results will be used for pit optimisation studies;
 The Indigenous Land Use Agreement (ILUA) has been lodged for registration with the National Native Title Tribunal.



Doulnia Gold Project, Burkina Faso
● Four new gold prospects have been identified from geochemical soil sampling.
● A program of trench sampling at Boungou South on the Zeko tenement has returned some good widths of gold mineralisation with a best result of 12m @ 2.2 g/t Au from trench BT01.

Further work is recommended on the Kollo gold project before a JORC Code resource can be estimated. Drilling is being planned to follow up gold mineralised structures which have reported gold intercepts such a project best gold intercept of 5m @ 60.36 g/t gold from 75m (including 2m @ 128.50 g/t gold from 76m) for hole KRC260, 18m @ 2.95 g/t gold from 37m (KRC001), 31m @ 3.19 g/t gold from 34m (KRC019)2 and 44m @ 6.39 g/t gold from 8m which included 4m @ 58 g/t gold from 24m (KRC210)

Four new gold prospects have been added to the portfolio and Kollo and Boungou South gold prospects remain attractive targets requiring further exploration. Drilling, auger sampling and field mapping are being planned to commence once the wet season has ended.

 

[shyguy]

just interested to know if anyone has any insight into the recent price drop around november?

 

[Miner]

3 years almost since last posting. AIs any one keeping interest on VML? At 1.0 to 1.1 cent what is the worth going?

 

[barney]

As mentioned in the Top Risers thread, I have placed an order for the Open in the morning on VML.

Logic behind the trade

1) Current Market Cap --- $16 million

2) Current Cash position approx. $4 million (includes recent Cap Raise at 0.009 cps)

3) Company has an agreement with TGN for the Sale of their North QLD Tungsten "Watershed" Project for $15 million Cash

4) They have an earn in to spend $5 million over 2 years on the Bouli Gold Project in West Africa

Recent drilling included very good strikes below with further results soon ---

8m at 7.26 g/t Au from 195m, including 2m @ 26.7 g/t Au and

20m @ 5.79 g/t Au


In my view the Chart is in a good position to accumulate around the Cap Raising price as Traders opt out at break even …. If The $15 million sale goes through, the Company will be sitting at Cash value with around $18 million in the bank and a high potential Gold Project in the pipeline.

Only obvious downside is the high number of shares on issue (1.7 billion) which could make for extended periods of churning.

If the Sale to TGN is delayed or falls through there may be some short term price retreat.

Because it is a phase 1 accumulation trade any stop loss at this point is totally discretionary. If there is no negative news but the SP retraces further I will likely take a second position depending on the price action.

​

 

[barney]

Order filled on Open …..

The deal breaker for taking a trade this early with the Chart still in what I am hoping is accumulation phase, was the $15 million dollar deal with TGN.

Any Spec with a Market Cap to Cash ratio of 1:1 with over $15 mill in the bank should be a low risk trade in the medium term.

The deal is supposed to be finalised this Friday … If it goes ahead I think the trade will be positive … if the deal breaks, then the SP will drop …. that is the risk.

 

[barney]

Deal with TGN finally signed so VML will receive $15 million in cash early August ….. Current Market Cap of around $15 million with cash in the bank of around $17 million … Enviable position for a Spec

There are a lot of shares on issue so the 0.01 resistance area will take a bit of cracking before any move higher and the day traders will need to be involved. Happy to hold given the Cash position

 

[barney]

Been sitting on this one for a while ….

Took a small position at 0.009 as an "early entry" to show how clever I was …. So that didn't work out great

The Company announced their gold project was possibly not quite as good as first thought so plan B came into action

My analysis for taking an early entry had changed slightly but the basis of it was the Company's high cash to market cap position, so I took a much larger position at 0.008 …

Anyway a Spec with a market cap smaller than their cash position is a rare commodity in this day and age so when the opportunity arose I took another medium position at 0.007 … yes they call it averaging down … frowned upon by the purists but no guts no glory right

Anyway when Phil Coulson took a huge position recently with Troca enterprises and the price action showed some serious accumulation going on at 0.007 I figured there is likely something going to happen at some point not too far down the track

Today 0.008 almost got line wiped as I had been expecting after all the accumulation at 0.007 so the boys have their positions ….. My gut feel is the Company will either be taken over/wound up for its cash value or they will engage a partner in a "good deal" …. either way it should still be a low risk punt so I still hold and hope for that good news spike above 0.01 and beyond

We shall see whet eventuates in good time!

 

[barney]

Been sitting on this one for a while ….

We shall see whet eventuates in good time!

5 months later and still sitting patiently

Do I still think I will make money out of this trade …… yep

Why? Nothing has really changed …. Still being accumulated, and today they announced less than marketable sale facility to lighten the register of deadwood.

Major S/H Phil Coulsten still accumulating ……

Another single $90,000 order went through earlier today and 0.008 got line wiped (again)

Its like a fine boutique beer …… taking a while to brew.

See how it is in another 5 months

 

[barney]

5 months later and still sitting patiently

Do I still think I will make money out of this trade …… yep

Its like a fine boutique beer …… taking a while to brew.

Anyway …. 2 months since my last post ….. My average buy in is around 0.008 cents so after the last couple of days price action, the 1 cent region is looking like it may hold (almost half a million $$ traded today in what has been a fairly inactive stock since I bought in a long time back)

I still feel confident of this turning into a good trade, but my method was far from perfect in the outset.

I wont be surprised to see this Co. taken over morphed into something completely different sometime over the next few months.

Main reason for initially taking the trade was the calculated "low risk" aspects. That still stands so I hold.

See how it pans out and maybe post a chart if it gets real interesting.

 

[barney]

Its probably early but a Chart just for the record …..

 

[barney]

Bit of movement at the station this morning.

 

[barney]

49 million shares changed hands before today's Trading Halt ……

Company to announce a material acquisition by Wednesday.

Phil Coulsen has been buying up over recent months and is now an Executive Director of the Co. Where there is smoke there is fire