ELE - Elmore Ltd

[tech/a]

Re: NSL - NSL Health

Michael.

I havent got the house on it!
Every now and again particularly with smalls and in this case a micro a dabble can pay off. Ive had enough of them to know that for the string of losers only a few make it well worth while.
The rest of my trading is more methodical.

I'm of the opinion (purely technical) that Monday will see early quick rise followed by massive selling as profit takers--me included get what winfall comes their way---then a period of volitility---I may have a dabble at the bottom end if I can find it!

 

[LRG]

Re: NSL - NSL Health

Any ans to my previous post about the 4:1?

Do you think it will spike to 30 cents on monday before the profit takers come in?

I wonder if it will open at 5 cents due to the 4:1?

please enlighten me with your tech thoughts if possible.

 

[tech/a]

Re: NSL - NSL Health

I have no idea where it will go.
Nor does anyone else by the look of it.

I keep hearing that old adage---"buy the rumor sell the fact".

Guess we will all know Monday.

 

[YOUNG_TRADER]

Re: NSL - NSL Health

YT is also good in the sense he knows when to sell

Having said this, imo he likes stocks with alot of risk e.g. low market cap stcoks. (but with potential high rewards of course). Something that differs a little to me

YT do you ever look at more safe stocks (that can still do well in current market)? I like to see your comments as most of the ones you mention are too "risky" for my apetite

thx

MS

Michael if you read through the thread, you'll see I bought NSL when it was 1.5c-2.5c and its mkt cap was $6m - $10m because I thought it offered alot of spec upside, I sold for a number of reasons and banked some good profits on this, hindsight shows had I held I would have made a motsa,

Now just because I sold at 3c doesn't mean that the stock is not worth more than that, on the contrary I often sell and leave plenty of profits on the table ie I sold YML/BRM at $1-$1.25 it got as high as $3, I sold QGC around 90c its now $2.50-$3 I think, the point is I usually buy in early when very few see the potential so if I step off early well its no biggie, however with NSL I am wishing I stayed on board for the 500%+ ride

Whilst I still haven't finished my number crunching on this one it will be very interesting to see where it ends up to see what sort of EV per tonne Mag the mkt will attribute to NSL's project/deposit

 

[eddie lives]

Re: NSL - NSL Health

anyone notice the position of the iron ore hills?

like YT said, i'm not too hasty to sell the market doesn't know what EV/tonne figure to put on a magnetite play in india with severely discounted processing and shipping costs

 

[tech/a]

Re: NSL - NSL Health

OK

Had a bit of a read.
Seems the $25 mill to be raised from a new issue.
Reading NOT < .20 c but determinate of trading price at the time of issue.

Think I might not be to hasty to sell these.
Bottom draw for the RIGHT reasons may well be pertinent.

 

[nioka]

Re: NSL - NSL Health

OK

Had a bit of a read.
Seems the $25 mill to be raised from a new issue.
Reading NOT < .20 c but determinate of trading price at the time of issue.

Think I might not be to hasty to sell these.
Bottom draw for the RIGHT reasons may well be pertinent.

I agree. It will be interesting to find out who will get the offer to buy the new issue. Will they be able to get them underwritten?. Will existing holders get an offer?. I couldn't see any reference to where the placement would be, am I missing something?. It may be hard for the SP to maintain the existing price on resumption of trading. The SP was subject to quite a jump prior to being suspended. A hint of insider knowledge having an influence in my opinion. Definitely not one to be sold in a hurry.

 

[YOUNG_TRADER]

Re: NSL - NSL Health

Ok so to tackle each point of uncertainty one by one


Capital Structure
Shares fully diluted post consolidation 100m
Merger consideration 400m

Capital raising $25m at 25c = 100m
(Based on minimum price of 20c, current implied SP of 40c and very very tough mkt conditions)

Performance Shares = 400m
It should be noted that Performance shares Class B requires the validation of a $350m NPV = 35c a share value and Class C requires Production to commence = a large mkt cap too

Total Shares = 1 Billion






Deposit/Project Size
The company says an exploration target over 500Mt's-770Mt's@ 25% - 35% Fe

The average of this is 635Mt's@30%Fe

But then the company also says the exploration UPSIDE target for the project is 1.2Billion Metic tonnes ?????

So I will use 2 deposit sizes

600Mt's@30%fe
1.2Billion Tonnes@30% Fe







Value?
The EV is going to be hard to come to but given that it can vary from as low as 20c to ealry stage low confidence projects to $2/t Magnetite for some takeover deals,

Those 2 transactions BBY cite make me think has a new Benchmark been set for Mag worldwide?


Anglo Deal for 49% MINAS RIO RESOURCES JORC 3.79 Billion Tonnes @ 33% Fe = 1.264 Billion Tonnes of Mag = $2 per tonne Mag

The ERNC / BML Deal 100% JORC 1.96 Billion Tonnes @ 32% Fe = 630 Million Tonnes Mag = $1 per tonne Mag

I feel comfortable using 25c for an infered JORC/Historical target but will also use 50c to show the value of a firmer JORC and $1 to show the value of a takeover


600Mt's@ 30%Fe = 180Mt's Mag @ 25c = $47.5m = 4.75c using 1 Billion Shares

1.2 Billion t's@ 30%Fe = 360Mt's Mag @ 25c = $95m = 9c using 1 Billion Shares


600Mt's@ 30%Fe = 180Mt's Mag @ 50c = $95m = 9.5c using 1 Billion Shares

1.2 Billion t's@ 30%Fe = 360Mt's Mag @ 50c = $190m = 19c using 1 Billion Shares


600Mt's@ 30%Fe = 180Mt's Mag @ $1 = $180m = 18c using 1 Billion Shares

1.2 Billion t's@ 30%Fe = 360Mt's Mag @ $1 = $360m = 36c using 1 Billion Shares


So we get a range of values of

Intial target @ 25c EV/t = 4.75c
Intial target @ 50c EV/t = 9c
Intial target @ $1 EV/t = 18c

Upside target @ 25c EV/t = 9c
Upside target @ 50c EV/t = 19c
Upside target @ $1 EV/t = 36c


Conclusions and comments
Well as I said all along, I loved NSL at 1.5c-2.5c, do I still love it at 10c? Not really, would I buy? No, BUT THEN THATS BECAUSE THIS ISN'T MY STYLE of investment, ie I WOULD NOT HAVE BOUGHT SDL WHEN IT WAS 10c, ITS NOW 25C so I hope you see just because I am not prepared to buy somehting doesn't mean there is no further value, with SDL there was between 250% to 400% further value

I have done my best to show a range of potential valuations for NSL, it should be remembered I am no expert and I am not offering any advice, rather just trying to help others make heads or tails of the whole thing, I hope my effort is appreciated

Good luck guys and remember REGARDLESS THE MKT IS THE ULTIMATE JUDGE

 

[pan]

Re: NSL - NSL Health

Hi,
nice research YT,

got a media release in a WA newspaper,

WA health firm steps into resources
11-July-08 by Edited announcement


Burswood-based surgery technology company NSL Health Ltd will switch focus to the resources sector later this year after entering into a merger agreement with unlisted company Iron Ore Hill Ltd.

Rest of article- http://www.wabusinessnews.com.au/en-story/1/64572/WA-health-firm-steps-into-resources-

 

[Largesse]

Re: NSL - NSL Health

Ok so to tackle each point of uncertainty one by one


Capital Structure
Shares fully diluted post consolidation 100m
Merger consideration 400m

Capital raising $25m at 25c = 100m
(Based on minimum price of 20c, current implied SP of 40c and very very tough mkt conditions)

Performance Shares = 400m
It should be noted that Performance shares Class B requires the validation of a $350m NPV = 35c a share value and Class C requires Production to commence = a large mkt cap too

Total Shares = 1 Billion






Deposit/Project Size
The company says an exploration target over 500Mt's-770Mt's@ 25% - 35% Fe

The average of this is 635Mt's@30%Fe

But then the company also says the exploration UPSIDE target for the project is 1.2Billion Metic tonnes ?????

So I will use 2 deposit sizes

600Mt's@30%fe
1.2Billion Tonnes@30% Fe







Value?
The EV is going to be hard to come to but given that it can vary from as low as 20c to ealry stage low confidence projects to $2/t Magnetite for some takeover deals,



I feel comfortable using 25c for an infered JORC/Historical target but will also use 50c to show the value of a firmer JORC and $1 to show the value of a takeover


600Mt's@ 30%Fe = 180Mt's Mag @ 25c = $47.5m = 4.75c using 1 Billion Shares

1.2 Billion t's@ 30%Fe = 360Mt's Mag @ 25c = $95m = 9c using 1 Billion Shares


600Mt's@ 30%Fe = 180Mt's Mag @ 50c = $95m = 9.5c using 1 Billion Shares

1.2 Billion t's@ 30%Fe = 360Mt's Mag @ 50c = $190m = 19c using 1 Billion Shares


600Mt's@ 30%Fe = 180Mt's Mag @ $1 = $180m = 18c using 1 Billion Shares

1.2 Billion t's@ 30%Fe = 360Mt's Mag @ $1 = $360m = 36c using 1 Billion Shares


So we get a range of values of

Intial target @ 25c EV/t = 4.75c
Intial target @ 50c EV/t = 9c
Intial target @ $1 EV/t = 18c

Upside target @ 25c EV/t = 9c
Upside target @ 50c EV/t = 19c
Upside target @ $1 EV/t = 36c


Conclusions and comments
Well as I said all along, I loved NSL at 1.5c-2.5c, do I still love it at 10c? Not really, would I buy? No, BUT THEN THATS BECAUSE THIS ISN'T MY STYLE of investment, ie I WOULD NOT HAVE BOUGHT SDL WHEN IT WAS 10c, ITS NOW 25C so I hope you see just because I am not prepared to buy somehting doesn't mean there is no further value, with SDL there was between 250% to 400% further value

I have done my best to show a range of potential valuations for NSL, it should be remembered I am no expert and I am not offering any advice, rather just trying to help others make heads or tails of the whole thing, I hope my effort is appreciated

Good luck guys and remember REGARDLESS THE MKT IS THE ULTIMATE JUDGE

expertly put YT.

i will just add on this

Intial target @ 25c EV/t = 4.75c = 11% of current SP
Intial target @ 50c EV/t = 9c = 21% of current SP
Intial target @ $1 EV/t = 18c = 43% of current SP

Upside target @ 25c EV/t = 9c = 21% of current SP
Upside target @ 50c EV/t = 19c = 45% of current SP
Upside target @ $1 EV/t = 36c = 85% of current SP


anyway you look at it, its a sell.

 

[nioka]

Re: NSL - NSL Health

Intial target @ 25c EV/t = 4.75c = 11% of current SP
Intial target @ 50c EV/t = 9c = 21% of current SP
Intial target @ $1 EV/t = 18c = 43% of current SP

Upside target @ 25c EV/t = 9c = 21% of current SP
Upside target @ 50c EV/t = 19c = 45% of current SP
Upside target @ $1 EV/t = 36c = 85% of current SP


anyway you look at it, its a sell.

The market isn't always rational. there are other factors that come into play. This one is in India, I assume others are in Australia. Costs of production, freight, governments are different with national aspects to be considered. Lots of unknowns to be considered. In hindsight it would have been nice to take the 10.5c before trading ceased. Next week is a new ball game and the price on opening could be anywhere from 4c to 10c. It must be a buy at 4c and a sell at 10c but that's a guess so let's wait before becoming a lemming.

 

[sam76]

Re: NSL - NSL Health

No one is factoring costs in India v's costs in Australia.

Think about it for a second... wages and labour, extraction/benification, transport (both to port and OS.....)

India v's Australia? I know which one I would back.

No one is factoring resource upgrades as well. NSl are pushing ASX to waiver historical drill data so they can show the REAL potential of this opportunity.

So many people are caught up in the "OMG they're doing a capital raising at half it's current value" train of thought.

20 cents post consolidation is a floating price. 20 cents is THE BARE MINIMUM.

There are many thing that can/will happen with NSL before consolidation.

Tell me, why didn't Directors sell out at 10 cents the other week and then buy in at 5 cents next week?

Answer: because 5 cent's simply aint going to happen.

Sell if you want, but I feel you will be lamenting your decision come Friday next week.

IMHO and DYOR

 

[LRG]

Re: NSL - NSL Health

thanks for the analysis YT and other opinions.

so where are we come monday?

are we going to see a price of 20 c in the morning session before a retreat - I hope so, but the concensus seems to be a SP lower then the close of 10.5 c?

correct only the market will know.

what are our friends at HC saying about this one on Monday?

 

[sam76]

Re: NSL - NSL Health

This has now become a medium to long term hold.

The time for speculating has finished and the investors/side watchers will now move in.

I keep getting the feeling that people think there will be billions and billions of sellers on Monday.

300 million shares on issue with 80% held by Directors.

many people have been waiting for confrimation on this one.

Just MHO

 

[tech/a]

Re: NSL - NSL Health

Well I have a trailing stop set at 9.5c if its taken out ehhhh

Anything above that---ehhh.

You never make big profits taking small profits.
My whole life doesnt depend on it!

 

[sam76]

Re: NSL - NSL Health

Well I have a trailing stop set at 9.5c if its taken out ehhhh

Anything above that---ehhh.

You never make big profits taking small profits.
My whole life doesnt depend on it!

Love your style, Tech!

I think people need to make their own decisions with this one.

A lot of questions have been answered and a lot of new ones have been asked...

Either way, next week will be big for NSL Health!

Cheers

 

[eddie lives]

Re: NSL - NSL Health

YT,
IMO i disagree with your .25 to $1EV for magnetite in INDIA

as sam76 pointed out no-one has evaluated the reduced costs of mining in india - bearing in mind there is an existing beneficiation facilities, port and railway in calicut

as i stated before, i like the comparison with AXO as, while AXO is much further advanced in their project, they have to build a new technology processing plant

AXO at $1 has an EV of 1.3

i'm looking forward to some broker reports speculating on the cost of recovery in india

shipping costs are also drastically reduced:

AGO reckon they can make $30 tonne for their magnetite ore before recent price increases
http://www.mineweb.com/mineweb/view/mineweb/en/page674?oid=48025&sn=Detail

and it costs about $15 tonne to ship ore from australia to china

from russia to china is about $4 tonne

india - china should be comparable

also, processing and mining costs are reduced - say adding another $10 tonne of profitability

therefore an indian iron ore company would stand to make ~$50 tonne = 60% increase in profit margin

therfore EV = 1.3/0.6 = 2.2 (using above AXO comparison)

600Mt's@ 30%Fe = 180Mt's Mag @ $2.3 = $414m = 40c using 1 Billion Shares

1.2 Billion t's@ 30%Fe = 360Mt's Mag @ $1 = $792m = 79c using 1 Billion Shares


That's fully diluted with performance shares exercisable from 24 - 60 months

and a very conservative cap raising at the MINIMUM price of 20c


please comment

 

[JJKools]

Re: NSL - NSL Health

Great post Eddie.

It is critical to remember the huge cost and efficency advantages India has over Oz. Whilst i appreciate YT's calcs, i certainly agree with Eddies figures as more of an overall picture has been considered. NSL is in ground breaking territory and i am holding on to my stock. From reading the lastest announcement there seems to be ore to come!

best wishes

 

[sam76]

Re: NSL - NSL Health

Thank you very much for takin the time to post that, eddie lives.

Hopefully, it will help people with their own reseach into the potential of NSL Health.

 

[Daddle]

Re: NSL - NSL Health

Hello everyone,

I have been following this NSL thread since Feb and this is my first contribution as I have not, until now, had anything worthwhile to communicate.

For what it's worth, I understood the announcement to mean that the capital raising would take place before the consolidation. It states that a condition of the merger is that "NSL" will raise capital (not IOH). Also, if the average trading price at that time is above 20 cents, then less shares will need to be issued to raise the necessary capital. For these reasons I feel that YT's calculation of the shares on issue may be slightly overtstated and hence, understate the potential share price.

Another component of the announcement has received very little (if any) comment. If NSL can sell whole or part of the project for $640,000,000 prior to merger, I assume it will happen. I am a novice in these matters but I thought it was unusual to have this condition in the merger, unless there is already a potential buyer. $640 Million is an unusual number - why not a round number ?? Unless for a reason ? Any comments ?

Finally, I was doing some reasearch on Wednesday this week and came across the ironorehill.com.au website. I was able to enter the site (unlike today where the home page is as far as you can get) and view company details. They had a photo of their corporate offices in Coorparoo, Brisbane and a link to their PROJECTS (plural). In order to access the projects link you needed to register, which I did. I then received an email apologising that the site could not be accessed and suggesting I continue to monitor the ASX website for announcements.

I can only assume that the IT people made the site live before they should have because it was taken down pretty quickly. What interested me most was that there were three or four projects listed and the Kerala project was only one. Anyone else have any more info on the other projects ???

I am hopeful for a positive resumption of trading on Monday. Good sign that there was no dumping by directors prior to announcement.

Good luck to all.