SDL - Sundance Resources

[LRG]

Has any one here got the ability to do a future value forecast value of the SP based on the data provided in the latest report say in 2010 / 2011 / 2012 /2013 etc.

ie when will the SP statistically start to head north and how far is likely / possible - even a range would be good.

Previus posts say NPV should be 50c, FV anything fron $5 - $10. I don't know - need a bit of science behind it?

 

[The Muffin Man]

Worth a look...especially pp 17 - 21

http://www.aspectfinancial.com.au/d...Jyb3JwYWdlcy9wZGZkZWxheWVkLmpzcA==&popup=true

Early years cashflow should put us in a nice place. Like ... the Maldives, Tahiti, ....

CarbonSteel, do you have another copy of the article possibly? When opening that link it says it has expired?

LRG, I'm no help there sorry, not much on the value forecasting.

 

[quinn123]

Has any one here got the ability to do a future value forecast value of the SP based on the data provided in the latest report say in 2010 / 2011 / 2012 /2013 etc.

ie when will the SP statistically start to head north and how far is likely / possible - even a range would be good.

Previus posts say NPV should be 50c, FV anything fron $5 - $10. I don't know - need a bit of science behind it?

Have you had a look on the previous pages on this thread? I think some of this has been looked at, but probably not at the detail your after.

 

[snopandsnap]

SDL going great guns. What an excellent stock. I told you bag holders to get out two weeks ago when it was 11 cents.

It will continue to go down as the project will never go ahead. If so, it would be at least 10 years time but i doubt that as the ore is located in the worst possible place. You can have 10 billion tonnes of ore but if you cant get it, its worth about the 400k they originally paid for it.

FMG up over 30% in the last 2 weeks.
BRM up over 14% but SDL down 20%. Does that not tell you something?

I would buy around 5 cents and buy a few instead a McDonalds burger.

Have fun.

 

[snopandsnap]

dont get me wrong. If you feel like going on a diet. Save the cash and buy a few thousand.

They have about 4 months cash left on the books and very little chance of raising capital in the market.

 

[jman2007]

SDL going great guns. What an excellent stock. I told you bag holders to get out two weeks ago when it was 11 cents.

It will continue to go down as the project will never go ahead. If so, it would be at least 10 years time but i doubt that as the ore is located in the worst possible place. You can have 10 billion tonnes of ore but if you cant get it, its worth about the 400k they originally paid for it.

FMG up over 30% in the last 2 weeks.
BRM up over 14% but SDL down 20%. Does that not tell you something?

Have fun.

Thankyou for that extremely insightful comparison,

Hope you had a good trip to the outer solar system and back, in the time you have been away we have experienced something called the Financial Crisis.

In other news, in the last eight months FMG has slipped from $13 and BRM from $2.50, much to the joy and delight of management and shareholders, and Barrack Obama has been elected president of the USA.

jman

 

[CarbonSteel]

CarbonSteel, do you have another copy of the article possibly? When opening that link it says it has expired?

LRG, I'm no help there sorry, not much on the value forecasting.

Mr Muffin Man... I have a copy downloaded. I dont see how to attach a file on the "Send Private Message" function. So, you got an email address? Size is 2.7 Mb.

 

[CarbonSteel]

SDL going great guns. What an excellent stock. I told you bag holders to get out two weeks ago when it was 11 cents.

It will continue to go down as the project will never go ahead. If so, it would be at least 10 years time but i doubt that as the ore is located in the worst possible place. You can have 10 billion tonnes of ore but if you cant get it, its worth about the 400k they originally paid for it.

FMG up over 30% in the last 2 weeks.
BRM up over 14% but SDL down 20%. Does that not tell you something?

I would buy around 5 cents and buy a few instead a McDonalds burger.

Have fun.

:bs:

What is wrong with these figures......
CAPEX
Mine & Plant....................................................................US$375m
Rail................................................................................US$1,423m
Port...............................................................................US$529m
Indirects.........................................................................US$442m
Contingency....................................................................US$508m
TOTAL ESTIMATED CAPEX (Jan 08)......................................US$3,277m

OPEX
Average DSO FOB Price.....................................................US$63.83/t
Estimated Production Cost (Jan08)*....................................US$19.65/t
ESTIMATED OPERATING MARGIN.........................................US$44.18/t
*Includes all cash operating costs, royalty and contingency

So, Operating Margin of $US44.18 x 35Mt/pa = $US1,546,300,000($AUD2,378,923,000) ...where is the problem again?:bowdown:

 

[The Muffin Man]

dont get me wrong. If you feel like going on a diet. Save the cash and buy a few thousand.

They have about 4 months cash left on the books and very little chance of raising capital in the market.

Can I ask how you came to that conclusion? Please also consider in your answer that SDL has now fully ramped down it's drilling program at Mbalam, which was one of the major drains on cash reserves for the company. Please also consider that it is becoming more probable that the Government of Cameroon will buy into the 15% of the CamIron business on offer, and pay 50% of all development costs to the date of purchase.

I fail to see how comparing Fortescue to Sundance is in any way valid? One is a producer the other is not. I'd like to challenge that SDL is indeed down 20% from 2 weeks ago anyway;

4-Feb-2,914,200 0.09
3-Feb-5,481,400 0.09
2-Feb-11,949,100 0.09
30-Jan-11,198,400 0.10
29-Jan-5,718,400 0.09
28-Jan-3,602,100 0.09

Closed at 8.9c last night. Where is the 20% drop? I'd say the stock has been very steady and found support.

Stop the lies champion.

BRM is trending upwards nicely at the minute, which is good. But that doesn't mean you have to post outright falsehoods in the threads of other stocks ok?

 

[jonojpsg]

:bs:

What is wrong with these figures......
CAPEX
Mine & Plant....................................................................US$375m
Rail................................................................................US$1,423m
Port...............................................................................US$529m
Indirects.........................................................................US$442m
Contingency....................................................................US$508m
TOTAL ESTIMATED CAPEX (Jan 08)......................................US$3,277m

OPEX
Average DSO FOB Price.....................................................US$63.83/t
Estimated Production Cost (Jan08)*....................................US$19.65/t
ESTIMATED OPERATING MARGIN.........................................US$44.18/t
*Includes all cash operating costs, royalty and contingency

So, Operating Margin of $US44.18 x 35Mt/pa = $US1,546,300,000($AUD2,378,923,000) ...where is the problem again?:bowdown:

Am totally with you here Carbon! Snopandsnap obviously doesn't understand simple economics if he can't see that the figures above are a clear pointer towards a viable and profitable development

 

[quinn123]

The deposit is not in the optimal location, but it is of exceptional quality according to the data so far released from inferred resource estimates (high grade, high tonnage and near surface). I think the location is interesting because it shares the same Precambrian shield as that of Minas Gerais, where Vale mines most of its iron ore? (itabirite?-hematite). The area could be a new world scale iron ore province. I don’t know how many near surface deposits of this quality remain to be discovered. Just some thoughts, not advice.

 

[LRG]

good calculation carbon steel.

so can someone now apply the last couple of factors to come up with a future SP estimated value.

i.e. apply the divison of number of shares issued + options that would be exercised and then apply a p/e ratio.

what do you come up with $5 - 10 SP?? - sorry i can't do it - does anyone know how to do it - like a brokerage valuation - "young trader" used to always do it on the "pennies".

YT are you there?

 

[prawn_86]

LRG, i'll try a very quick simple calc for you. (this will be way off, but will give a rough example, showing that funding is their main hurdle)

Assuming $3billion needed for infrastructure that would mean they would need to issue 60 billion shares at 5c in order to get that much. Or else they will need to find a JV partner etc etc.

So assuming they have lets say 65 billion shares on issue and they are making $2bill a year (according to CarbonSteel, i cant be bothered verifying this), that equates to 3.3c per share. So on a PE of 5 they would be valued at 16c (market cap of $10billion) per share or a PE of 10 would give them 33c per share (market cap of $20 billion).

So as you can see dilution is the big factor here. Obviously they wouldnt have 65 bill shares on issue, they would do a **** load of consolidations etc but essentially the prices still work out the same. Things would change if a JV partner comes in, what % they take, what funding they put up etc etc

 

[CarbonSteel]

What is wrong with these figures......
CAPEX
Mine & Plant....................................................................US$375m
Rail................................................................................US$1,423m
Port...............................................................................US$529m
Indirects.........................................................................US$442m
Contingency....................................................................US$508m
TOTAL ESTIMATED CAPEX (Jan 08)......................................US$3,277m

OPEX
Average DSO FOB Price.....................................................US$63.83/t
Estimated Production Cost (Jan08)*....................................US$19.65/t
ESTIMATED OPERATING MARGIN.........................................US$44.18/t
*Includes all cash operating costs, royalty and contingency

These figures come directly from the Investor Presentation made by Don Lewis at INDABA on 11 February 2009.

 

[CarbonSteel]

LRG, i'll try a very quick simple calc for you. (this will be way off, but will give a rough example, showing that funding is their main hurdle)

Assuming $3billion needed for infrastructure that would mean they would need to issue 60 billion shares at 5c in order to get that much. Or else they will need to find a JV partner etc etc.

So assuming they have lets say 65 billion shares on issue and they are making $2bill a year (according to CarbonSteel, i cant be bothered verifying this), that equates to 3.3c per share. So on a PE of 5 they would be valued at 16c (market cap of $10billion) per share or a PE of 10 would give them 33c per share (market cap of $20 billion).

So as you can see dilution is the big factor here. Obviously they wouldnt have 65 bill shares on issue, they would do a **** load of consolidations etc but essentially the prices still work out the same. Things would change if a JV partner comes in, what % they take, what funding they put up etc etc

Still another way to look at it...
Borrow $US3.2B @ 9% repaying principal and interest over 10 years.
Repayments would be approx. $US464M pa. or approx. 30% of annual operating margin. During this period, there is still a spare $US1.082B pa. Then debt free after 10 years.

Finding a bank would not be easy!

Operating Margin/Share (after taking out repayments):
$US1.082B / 1.8B shares = $US0.60/share
After 10 years (fully repaid):
$US1.546B / 1.8B shares = $US0.86/share

Is anyone able to help me get from Operating Margin/Share to EPS? and so complete the calculation.

Thanking you in anticipation...

An aside.... Onya jman!!!

 

[jonojpsg]

LRG, i'll try a very quick simple calc for you. (this will be way off, but will give a rough example, showing that funding is their main hurdle)

Assuming $3billion needed for infrastructure that would mean they would need to issue 60 billion shares at 5c in order to get that much. Or else they will need to find a JV partner etc etc.

So assuming they have lets say 65 billion shares on issue and they are making $2bill a year (according to CarbonSteel, i cant be bothered verifying this), that equates to 3.3c per share. So on a PE of 5 they would be valued at 16c (market cap of $10billion) per share or a PE of 10 would give them 33c per share (market cap of $20 billion).

So as you can see dilution is the big factor here. Obviously they wouldnt have 65 bill shares on issue, they would do a **** load of consolidations etc but essentially the prices still work out the same. Things would change if a JV partner comes in, what % they take, what funding they put up etc etc

Are you serious Prawn??? AS if they are going to issue 60 billion shares! They'll borrow the 3bn from some nice bank in China, and pay it back in 4 years or so after they're producing and earning 2bn a year. Then after they've paid it back, say 2015, they'll be clearing 2bn a year still with 1.8bn shares on issue,maybe 2bn say which is $1 per share. A PE of 5 makes that $5 per share valuation (NOTE that is in 2015 )

If you scale it back a bit tho and bring that SP back to today, I still think 9c is a little undervalued. Of course they definitely need to get a JV partner or offtake agreement signed up ASAP to get the SP to where it should be.

 

[prawn_86]

Jono,

as i said in the post it was done very quickly to give a starting point, and its worked by generating discussion. I have never looked at this co before in detail.

Funding is the main issue, be it through share issues or from a bank. I highly doubt a bank would be willing to lend them 3bill, because currently that is >16 times their current market cap.

IMO if they want to get it up and running, they will end up owning less than 50% of it, with the rest spread across various other countries. Its just too much risk for a bank or any single co to back in these economic conditions.

 

[CarbonSteel]

Jono,

as i said in the post it was done very quickly to give a starting point, and its worked by generating discussion. I have never looked at this co before in detail.

Funding is the main issue, be it through share issues or from a bank. I highly doubt a bank would be willing to lend them 3bill, because currently that is >16 times their current market cap.

IMO if they want to get it up and running, they will end up owning less than 50% of it, with the rest spread across various other countries. Its just too much risk for a bank or any single co to back in these economic conditions.

Hey Dendrobranchiata,

Is it entirely beyond the realms of possibilty that an offtake partner might underwrite SDL for a loan from a bank? i.e. this offtake partner does not actually part with the readies and may get favourable treatment on pricing.:chimney

And you are correct sir! I appreciate the fact that you have stirred up some discussion!

A question... Cameroon Govt. will pay for 50% of costs to date. Any idea how much cash that is? Cos that cash might come in handy if it was forthcoming in the next 6 months or so.

I for one do not underestimate the abilities of Talbot or Lewis when it comes to the future security of this company.

Is anyone able to help me get from Operating Margin/Share to EPS? and so complete the calculation.
(See post#975)

 

[CarbonSteel]

"Strategic Partner Negotiations
An Information Memorandum has been distributed to selected international parties with interest in product off-take, equity participation and/or financing of the Mbalam Project. Twelve confidentiality agreements have been signed with major international industry groups for review of the project. These companies include some of the world’s largest iron ore and steel producers.
Site inspections have been completed by shortlisted parties in January 2009 with technical and commercial due diligence underway. Work will focus on these negotiations in the March 2009 Quarter." Unquote

Source...
Quarterly Activities Report
Period ending 31 December 2008

I notice though, that contained in the Investor Presentation dated 11 February 2009, the diagramatic "Critical Path" points towards mid-2009, not Q1 2009, for some degree of finalisation. I assume therefore, that while work will focus on negotiations, an outcome is unlikely to be announced prior to 30 June 2009.

Keep that discussion coming... we'll all learn something!

 

[The Muffin Man]

Hey Dendrobranchiata,

Is it entirely beyond the realms of possibilty that an offtake partner might underwrite SDL for a loan from a bank? i.e. this offtake partner does not actually part with the readies and may get favourable treatment on pricing.:chimney

And you are correct sir! I appreciate the fact that you have stirred up some discussion!

A question... Cameroon Govt. will pay for 50% of costs to date. Any idea how much cash that is? Cos that cash might come in handy if it was forthcoming in the next 6 months or so.

I for one do not underestimate the abilities of Talbot or Lewis when it comes to the future security of this company.

Is anyone able to help me get from Operating Margin/Share to EPS? and so complete the calculation.
(See post#975)

No idea what 50% of costs to date would be, I posed that question in an earlier post, but I'm not sure anyone would know except SDL and the Cameroon Government.

While your mentioning Talbot and Lewis, throw in Jones also. The deal struck by Gindalbie not long ago was a fantastic result for shareholders in the circumstances.