AEV - Avenira Limited

[Sean K]

Re: MAK - Minemakers

Just about to hit the bottom zone of support that I see before I bail.

Is respecting that support zone.

Still trending down - sideways though.

Light green circle potential break.

Dark green circle broken the down trend, although $2.00 looks important.

IMO.

 

[Sean K]

Re: MAK - Minemakers

Did I hear in the latest AD interview with James (not Joel ?) that MAK had already been approached for takeoff/equity arrangements with regard to Wonarah?

 

[Speewha]

Re: MAK - Minemakers

Hello,

Joel is in Perth, James is in Brisbane.

You heard correctly.

As an aside the one share seller has been active with MAH perhaps they target M stocks.

Regards

 

[Sean K]

Re: MAK - Minemakers

AD also said that instead of taking on partners he wanted to take it forward alone to realise shareholder value.

But is that approach the right approach for us? Surely getting a big backer with plenty of cash would be better for taking this forward fast tracked?

Just like Gutnick has done with Legend.

Take note AD!

Gutnick phosphate operation to fertilise Indian economy

Andrew Fraser | July 18, 2008

FORMER diamond tsar Joe Gutnick has teamed up with India's largest fertiliser supplier and investment icon George Soros in a proposed phosphate operation in northwest Queensland.

Under a deal announced yesterday in Brisbane, the Indian Farmers Fertiliser Cooperative, or IFFCO, will inject slightly over $100 million into Mr Gutnick's plan to ship phosphate from the company's four holdings around Mt Isa.

Reserves total a billion tonnes.

Mr Gutnick, the chief executive of US-listed Legend International, yesterday revealed that George Soros' Soros Fund Management had invested $20 million in the project and that US hedge fund managers Atticus Management had taken a stake.

 

[Mackky]

Re: MAK - Minemakers

NO NO we(mak) don't need a partner. People just don't realise just how different Mak is from legend.
Mak has infrastructure (road, rail, port), legend doesn't and that is why legend needs investors/partners (legend still need to raise another 600 million to get their project going).

IMO when compared to legend mak is massively undervalued. There is a lot more risk with legend than mak. Legend has to raise hundreds of millions $$ plus get approvals from government and natives not just for the mine site but for a slurry pipe line 300km? long and a port. Mak has a larger higher grade deposit than legend, legend will need the construction of a extensive beneficiation plant. (mak will most likely only need a simple screening operation).

Mak should easily fund this project with a bank loan, which will most likely be paid off with 1 months production.
Mak are not just relying on AD's abilities to get this project going asap, they have employee QUALITY consultants and have employed NEVILLE BERGIN as project manager. NB has an excellent track record and AD is right to describe his appointment as a coup for the company.

One day (i'm in no hurry) mak will achieve its true value (hopefully not from a takeover). If you have a good hard look at wonarah there is not much risk this project won't get up and going. Massive resource, suitable for making fertilizer, existing infrastructure, minimal startup cost, flat sandy desert (shouldn't have environmental problems), natives are keen to get it happening, government is keen to get all those royalties.

Keep thinking I am missing something, but the harder I look I am sure I am not. Maybe everyone is waiting for the release of the pre-feasibility studies, maybe then people will start believing wonarah is going to happen and finally it will sink in just how massively profitable it will most likely be.

 

[Speewha]

Re: MAK - Minemakers

Hello

Joe always knew how to stitch a deal. They have retained 20% of production for the spot market.
One would of thought this is the path that MAK will eventually go down. Raising funds by other means could be a bit risky/ difficult in today’s market.

MAK are going to need a lot more than their $12m in the Bank to bring the project to production.

Regards

 

[Mackky]

Re: MAK - Minemakers

Also Rio chose Wonarah, Rio would have had a good hard look at all the phosphate deposits around Australia and out of them all they chose Wonarah. On that basis alone imo Mak should be capitalised at more than Legend.

 

[Mackky]

Re: MAK - Minemakers

mak are NOT going to need a lot to bring this project into production, 20-50million. Easily funded by a bank loan or forward sales and paid back by the first months production.

 

[Sean K]

Re: MAK - Minemakers

Not sure if MAK are any better than Legend for the points raised. Possibly.

Legend seem to have some serious backers which reduces risk incredibly. Don't underestimate that, in this environment.

Legend is actually closer to shipping routes, and IPL, and initial Capex would be repaid rather quickly.

I disagree on the beneficiation, MAK will probably need that as well. They are only hoping for DSO at the moment.

Capex, I agree, MAK will be reasonably low, and Opex will be relatively low, pending initial trucking, rail and shipping costs.

The key at the moment seems to be making the most of current RP prices, and who will do that?

Still holding MAK with a longer term view that Ag commods and support will outperform over the next few years.

 

[Speewha]

Re: MAK - Minemakers

Hello,
Always knew there were good reasons I brought into this one, thanks for the confirmation posters. Notwithstanding MAK’s excellent position, geographic, existing built infrastructure , quality of product ,staff etc, still think obtaining some cash for forward production is a cheap way of raising cash. MAK have as we know has other attractive projects all of which will need further development and lots of cash. I agree MAK do not need to do this on the same scale that others may have been forced to do.

Weather variations wet/ dry season, will no doubt play a part in the future of this project, but you really have to scrape the bottom of the barrel to find negative things to say about the great potential we are sitting on with MAK. I will continue to hold and not play attention to the general market weakness that is affecting many well established and profitable companies let alone start up’s.

Regards

 

[Mackky]

Re: MAK - Minemakers

"Legend seem to have some serious backers which reduces risk incredibly. Don't underestimate that, in this environment."

You have missed my point Mak do not need serious backers(money) so there is no risk to reduce on this front.

"Legend is actually closer to shipping routes, and IPL, and initial Capex would be repaid rather quickly. "

Closer to shipping routes? do you mean distance to port from the mine?. Dawin is a pretty good port, I think there could be possible issue with water depth at legends chosen port site. (I remember reading Legend will consider barging the phosphate to deep water for loading). Legend will unlikely raise their huge capex by debt so share holdings will be significantly diluted. Mak have the chance (due to capex being more than 10x less then legend) to fund capex by debt or forward sales thus no dilution.

"I disagree on the beneficiation, MAK will probably need that as well. They are only hoping for DSO at the moment."

I didn't say mak didn't need benefication, I said they will most likely only need a simple screening (benefication) operation. Legend will need a large benefication plant due to their phosphate ore being of a lower grade. (they have factored this into their capex).

"The key at the moment seems to be making the most of current RP prices, and who will do that?"

That is spot on. If all goes to plan Mak will do this easily 1-2years before legend. I know legend don't say this in their presentations, but how are they going to raise a huge capex, drill out there deposit, get approvals for a mine site, pipeline, and port. A lot of environmental issues to consider building a 300km slurry pipeline and a port. If you have any doubt of mak being in production in 2010, then Legend have absolutely no chance of doing this. IMO Joe is dishing out a lot of spin hoping to bring in the big $$ to get the project going.

 

[Ken]

Re: MAK - Minemakers

72,000,000 tonnes of phosphate is there resource and they are selling at $200 a tonne. so resource worth, $14.4 billion( is that right)?

I wonder what margins they are making on this, after labour costs, and setup costs.

They are looking at 3 million tonnes per year. so that $600 million worth of phosphate.And from what they are saying they don't see phosphate easing in price. But like anything, MAK have to be in at the right time. no point having the resource if they can't ship it.

Is $1.40 support levels??? 2010 is along way away....

 

[champ2003]

Re: MAK - Minemakers

72,000,000 tonnes of phosphate is there resource and they are selling at $200 a tonne. so resource worth, $14.4 billion( is that right)?

I wonder what margins they are making on this, after labour costs, and setup costs.

They are looking at 3 million tonnes per year. so that $600 million worth of phosphate.And from what they are saying they don't see phosphate easing in price. But like anything, MAK have to be in at the right time. no point having the resource if they can't ship it.

Is $1.40 support levels??? 2010 is along way away....

2010 is only a 1.5 years away to start with.

MAK could be selling RP at U.S $400/t when they hit production in 2010 as forecast on their project timetable. The current price of RP is U.S $400- $435.

Support could be at the current level barring any major catastrophe however you never know in this market.

OPEX & CAPEX will be discussed in pre feasability however early parameters have been set at OPEX being at around $100 p/t and CAPEX is around 30 million. Profit margins should be around $300 depending on the price of RP at the time of production and there will be offtake agreements to secure a good sales price before hand.

Fundamentals look very strong going ahead.

Good luck with your investments.

Champ

 

[Sean K]

Re: MAK - Minemakers

Is respecting that support zone.

Still trending down - sideways though.

Light green circle potential break.

Dark green circle broken the down trend, although $2.00 looks important.

IMO.

Approaching the light green circle mentioned in the above post and chart. Intraday, so the world could fall over soon, but starting to look a little better.

Reports of RP price increases over in la la land, which might be giving it a boost, and general market sentiment. May be short lived in this environment, but fingers toes and eyes crossed we have a nice bear rally.

Would love to call a potential bottom here, but the markets are pretty scarey. eeeeek.

RSI and MACD are looking good on the 6 mth and 1 year daily too.

 

[Speewha]

Re: MAK - Minemakers

Hello,

There may be some Geopolitical reasons to keep holding MAK,notwithstanding local market vagaries .

Have provided a link carrying some news that, has not been widely reported in the Aussie media. Tension growing between Algeria & Morocco over disputed Western Sahara border. Fueled it seems by increasing arms sales to either side from the USA and Russia.
Not sure of reliability of the Oil Drum, will have to look out for other media outlets for confirmation I guess’

www.theoildrum.com/node/4275

Regards

 

[Ken]

Re: MAK - Minemakers

Am i the only one who thinks that MAK could be too good to be true?

How could a business that in 1.5-2 years time have a current market cap of $80-90 million, when it appears to be a big possibility that it could be making close to $1 billion in 2 years time...

is it the nature of investors not willing to see the price of phosphate at these levels for that long?

Or is it the risk of holding onto a stock in the current market?

I didn't want to get blinded by 10-20% gains, so i choose only to invest small purely for the fact i can see the overall potential.

Potential is a dirty word, and alot can happen between now and then.

Uranium is a prime example of a commodity getting ahead of itself.

lets hope its not the same for phosphate and MAK can produce at current market price

 

[Sean K]

Re: MAK - Minemakers

Am i the only one who thinks that MAK could be too good to be true?

How could a business that in 1.5-2 years time have a current market cap of $80-90 million, when it appears to be a big possibility that it could be making close to $1 billion in 2 years time...

is it the nature of investors not willing to see the price of phosphate at these levels for that long?

Or is it the risk of holding onto a stock in the current market?

I didn't want to get blinded by 10-20% gains, so i choose only to invest small purely for the fact i can see the overall potential.

Potential is a dirty word, and alot can happen between now and then.

Uranium is a prime example of a commodity getting ahead of itself.

lets hope its not the same for phosphate and MAK can produce at current market price

I think it's hard for most experienced investors to expect price gains for RP going from $50 to $400+ in a year to be sustainable. There's arguments for it staying higher for much longer, but it's just simply a logical perception that prices do overshoot sometimes, and this may be one of them. Similar to the U price skyrocketting a while ago and everyone was saying S&D was going to drive it higher or hold it up for years to come.

The only professional analyst that I know (BBY on MAK) have RP projected prices much lower than $400. Will check what it was.

However, even if prices come back to $200 in the next year the project will be generating lots of profit, and does not suit a sub $100m mc. Keep in mind the dilution for going into production; ongoing costs and capex, pending finance options.

Chart wise, looks like a short term bottom could have been formed with the stock moving up slightly. MACD and RSI confirming the move.

I had $1.75 earlier as the most significant level of resistance but perhaps it's more around $1.65 ish. Certainly potential here for it to be breaking that down trend resistance, but who knows in this market environment.

 

[champ2003]

Re: MAK - Minemakers

I think it's hard for most experienced investors to expect price gains for RP going from $50 to $400+ in a year to be sustainable. There's arguments for it staying higher for much longer, but it's just simply a logical perception that prices do overshoot sometimes, and this may be one of them. Similar to the U price skyrocketting a while ago and everyone was saying S&D was going to drive it higher or hold it up for years to come.

The only professional analyst that I know (BBY on MAK) have RP projected prices much lower than $400. Will check what it was.

However, even if prices come back to $200 in the next year the project will be generating lots of profit, and does not suit a sub $100m mc. Keep in mind the dilution for going into production; ongoing costs and capex, pending finance options.

Chart wise, looks like a short term bottom could have been formed with the stock moving up slightly. MACD and RSI confirming the move.

I had $1.75 earlier as the most significant level of resistance but perhaps it's more around $1.65 ish. Certainly potential here for it to be breaking that down trend resistance, but who knows in this market environment.

Hi Kennas,

I also think that on the other hand it is also hard for the inexperienced person to think that the RP price will hold but then just take a look at the majority of the other commodities. Most have come off the boil but not to much degree. I would think it reasonable for the RP price to retrace around 30% once it comes off the boil in say 4-5 years time. The question that I have in my mind is at what price will it come off the boil? $600? $700? $800/t?$2000/t? Who know's! If the peak phosphate theorists are correct then this price hike may continue for many years to come.

I have crunched the numbers accounting for the worst and best scenarios and i can't see any downside at all for MAK. The upside is gigantic though.

Cheers!

Champ

 

[Sean K]

Re: MAK - Minemakers

The question that I have in my mind is at what price will it come off the boil? $600? $700? $800/t?$2000/t? Who know's!

Yes, who knows? I am hoping it doesn't get to this point, because if the farmers pass on the costs at least half the world will not be able to afford to eat. It's already a major issue across the globe. And when people can't afford to eat the regular fertiliser required products they will stop eating, or find an alternative. Then, farmers no longer have demand and prices come off. As simple as that. It seems the price of food is already causing major issues, so my guess is it's peaking closer to current prices than $2000, but I'm just guessing. Only time will tell.

 

[champ2003]

Re: MAK - Minemakers

Yes, who knows? I am hoping it doesn't get to this point, because if the farmers pass on the costs at least half the world will not be able to afford to eat. It's already a major issue across the globe. And when people can't afford to eat the regular fertiliser required products they will stop eating, or find an alternative. Then, farmers no longer have demand and prices come off. As simple as that. It seems the price of food is already causing major issues, so my guess is it's peaking closer to current prices than $2000, but I'm just guessing. Only time will tell.

I think from previous discussions MAK could sell their RP as a stand alone product to farmers therefore the price of RP could go to extremely high levels. DAP might decouple from RP in that case as DAP may become far too expensive. If farmers decide to stop using DAP then they might just buy the potash and RP separately themselves and apply that. The quality wouldn't be as high as DAP i guess but then what else can the farmers do at those prices when they need to continuously replace the phosperous in the ground.

Champ