AEV - Avenira Limited

[champ2003]

Re: MAK - Minemakers

I said there may be sections close to DSO Champ, but it remains to be seen whether there is enough to warrant removing the overburden to get to a small area of DSO. Sure there are some individual drill holes above 28% which is good, but it will need to be relatively widespread in one particular area to be worthwhile wouldn't you think?

The ann still states potential for DSO, but confusing to me the ann states that the DSO potential is in the Main Zone.



Let's be conservative, or any result less that expectations will be smashed in this environment.

Kenna's,

The market gets it wrong all the time. People need to simply follow announcements thoroughly to keep informed. DSO was never meant to be for the entire area and has only been mentioned that a small area MIGHT be DSO.

Either way it doesn't change time frames to production, it only changes CAPEX. All much of a muchness IMO.

Now that results have come back from the extended drilling at wonarah they can see even greater potential for DSO out there with grades over 35%.

All in all a great result so far exceeding expectations all round.

Let's just see what the PFS and scoping study results come up with.

I'm confident that they will also show up to be extremely robust.

Champ

 

[derty]

Re: MAK - Minemakers

One of the pro's in Minemaker's favour is likely that it will be much cheaper to commission a minesite/processing plant in a year or so. Materials will be cheaper, construction delays will be reduced, there will likely be a significant pool of skilled workers looking for work (possibly desperate) so labour/payroll costs could be scaled back and the competition between construction/engineering firms to land large projects will be intense.

In short, if Minemaker's feasibility is successful (the above factors will make that more likely), they can raise the capital and the phosphate prices don't tank then they will be in a very good position when things eventually turn around.

 

[Sean K]

Re: MAK - Minemakers

Bit of a curly triangle thing happening here. Hopefully it's a break up. Would be really happy to see a higher high above 77 ish cents....

Hopefully a good JORC for the Main Zone will assist...

Due sometime soon....

 

[Green Machine]

Re: MAK - Minemakers

Does anyone have the link or know how to access a recent broker report that had some pretty negative stuff to say about minemakers? Not that I am worried about these brokers, maybe some interesting reading though!

 

[Sean K]

Re: MAK - Minemakers

Does anyone have the link or know how to access a recent broker report that had some pretty negative stuff to say about minemakers? Not that I am worried about these brokers, maybe some interesting reading though!

No, but from what I saw of it, the analyst is toast.

Claimed $1b capex which is just tripe.

He'll be driving a taxi next week.

 

[tasweb]

Re: MAK - Minemakers

Does anyone have the link or know how to access a recent broker report that had some pretty negative stuff to say about minemakers? Not that I am worried about these brokers, maybe some interesting reading though!

Were you referring to the SELL recommendation made by Brett Walker of State One Stockbroking on the CompareShares site?

 

[Green Machine]

Re: MAK - Minemakers

Thanks Tasweb, I would imagine this would be it. I am involved in the ag industry in W.A. the word is from major local suppliers that phosphate prices will drop in February, but to what extent we don't know, hard to imagine it finding the levels that the broker mentioned anytime soon though given the fundamentals.

 

[justiceotp]

Re: MAK - Minemakers

Where can you find current phosphate pricing?

And what effect if any should the Acquiring of 80% equity in the Fraser Iron Project have on the share price?

 

[J.B.Nimble]

Re: MAK - Minemakers

Where can you find current phosphate pricing?

And what effect if any should the Acquiring of 80% equity in the Fraser Iron Project have on the share price?

Easy one first - Fraser Iron - minimal impact. In the short to medium term all sp action will be a function of the phosphate story.

A little harder - Rock phosphate prices hard to find but recent announcements from CII would give cause for concern.

On October 21 they report a profit surge for the quarter ended Sept 30 on the back of strong phosphate prices

On October 30
"The company advises that it has had a sharp and marked deterioration in demand for our phosphate products as a consequence of the global financial instability now seriously affecting our Malaysian and Indonesian markets."

On November 20
"The Company advises that it will implement a shutdown of its operations on Christmas Island for the period from 22 December 2008 until 3 February 2009 due to the lack of demand from our Malaysian and Indonesian markets as a consequence of the global financial crisis."

You can draw your own conclusions as to what is happening to rock phosphate prices but a significant retreat seems to be on the cards...

 

[Sean K]

Re: MAK - Minemakers

You can draw your own conclusions as to what is happening to rock phosphate prices but a significant retreat seems to be on the cards...

Cripes, that's slightly unexpected. I never thought the price would stay so bouyant, but wouldn't have expected producers to be closing shop over a lack of demand.

How the heck can they go in one month from record profit, to the next closing shop?

Other quotes...

21 Oct:

“Our investment in PRL has continued to perform well, and this quarter has set the foundation for an outstanding year ahead,” continued Mr Brown.

29 Oct:

The Board remains optimistic that the company can weather the current storms and continue to maintain a sound financia blase into the future provided demandr ebounds within a reasonable timeframe and access to the resources on Christmas lslandc ontinue to be made available to us by the Commonwealt Governmenot on a commercially realistic basis.


But since 20 Nov there SP has hardly moved. It should have tanked.


Short term this kind of development may seriously effect MAKs immediate objectives.

We're assuming it's the same product, and there's no extraneous circumstances the Malaysian and Indonesian companies have gone through to have to stop delivery? The lack of information in those reports is pretty ordinary....

 

[WRONG'UN]

Re: MAK - Minemakers

Reference for fertilizer prices - check out the 20 Nov report - not looking too flash!
http://fertilizerworks.com/fertreport/index.html

 

[Sean K]

Re: MAK - Minemakers

Reference for fertilizer prices - check out the 20 Nov report - not looking too flash!
http://fertilizerworks.com/fertreport/index.html

Short term it doesn't look like total death and destruction, but weaker.

DAP

There is no change in the DAP market this week. Demand is almost totally lacking and will remain so for several more weeks at least. The next sizeable chunk of buying is expected to be in India during December. Low rates of DAP production in India during Q4 will lead to a shortage of material, which will have to be covered by imports.

China will be one of the most competitive sources. Price indications for Chinese DAP have fallen to around $450/tonne FOB this week. Producers there are keen to move inventory that has built up and are seeking markets offshore. US DAP prices have been maintained at a nominal $550/tonne FOB Tampa, but this level has not been seriously tested.

North America
A poor fall season in the Midwest has left distributors holding significant inventories of
DAP in the US. Some are now starting to question whether farmers will apply much
phosphate and potash at all this season, believing that they will concentrate on nitrogen
application in spring to the exclusion of other nutrients.

Prices for DAP are moving down, but pinpointing the exact level is difficult. Estimates this
week were in the range $500-550/short ton FOB Nola for prompt barges. A near total lack
of buyers is evident. Against this background, terminal operators were still quoting much
higher prices in the hope of placing some higher-priced inventory.

Mosaic has begun to offer DAP for Q1 delivery to selected customers based on rail delivery
from central Florida. According to buyers, it is quoting a base price of $765/short ton FOB
central Florida, with a price collar of $300/short ton up or down. The DAP is for Q1 2009
delivery, with the price to be fixed before the end of December.

Figures from the TFI Record show a large increase in US inventories of DAP and MAP
occurred during October despite a drop in production. Combined DAP/MAP inventories
were up 16% on September at 1.37m short tons. This is 79% higher than at the same time
last year.

DAP/MAP production was down 8% on September at 961,000 short tons. Producer
disappearance was 24% down at just 769,000 short tons. Disappearance is running 20%
lower than a year ago.

Exports of DAP and MAP from the US were also down in October. DAP exports were off
4% at 404,000 short tons and MAP down 72% at 41,000 short tons. India took 343,000 short
tons of DAP.

The graph looks a bit toppy going into mid 09...

Wonder what alchemy they've used to come up with that projection?

 

[justiceotp]

Re: MAK - Minemakers

Oh well maybe they can make some money out of the Uranium they announced today then. Hoping these guys come out of it all OK bought a fair bit of them for the long haul.

 

[J.B.Nimble]

Re: MAK - Minemakers

Oh well maybe they can make some money out of the Uranium they announced today then. Hoping these guys come out of it all OK bought a fair bit of them for the long haul.

The Fraser iron announcement is all very nice but a bit long termish. Then along comes the Uranium announcement which doesn't seem to add up to much - feels like a bit of a pump to keep the options in the money until expiry at end of December. I expect the Wonarah JORC and scoping study will be towards the end of December for similar reason. I still like this for the long term but the volatility is starting to make my head spin...

 

[J.B.Nimble]

Re: MAK - Minemakers

More on the short term price and market action in the fertiliser market
http://seekingalpha.com/article/108762-mosaic-pre-announces-production-cuts?source=article_lb_articles

The last time we saw DAP prices at 500 to 550USD/T was back at the start of the year when RP was heading up through the 150 to 200USD/T range. The big question now is whether the price will bottom above the as yet unknown opex number.

 

[rockhound]

Re: MAK - Minemakers

greenmachine, this is copy of the original recommendation by Walker.

"Minemakers (MAK)

We are starting to see a sharp downturn in demand for phosphate products as a result of the global credit crisis. MAK is still quoting prices of US$450-to-US$500 a tonne free on board from Morocco. While this may be the case right now, the next round of price negotiations will almost certainly see a sharp fall in the price of phosphate. The MAK operation was always going to be high cost, and with little chance of raising the $1 billion of capital expenditure required anytime soon, this project is going nowhere fast. For those still sitting on a 300 per cent gain prior to the initial phosphate announcement, we recommend you take your sizable profit.

Brett Walker
STATE ONE STOCKBROKING"


note it has been ammended, and the revised version calls to 50/t RP pricing for its logic, also bogus IMO.

regards

 

[J.B.Nimble]

Re: MAK - Minemakers

Yes, the offending brokers report was rightly discredited as a piece of trash. As AD pointed out the guy clearly hadn't read the announcments or he would have understood that the intended development was going to be perhaps 50million rather than the billion dollar development that he mentioned. As AD points out this is the clear distinction between Wonarah and competing phosphate projects.

And he is probably jumping a bit ahead to claim a retreat back to $50/T for RP prices.

However, in the short term RP prices do have a big questionmark. RP prices are hard to find but DAP is probably a good pointer. Prices are now 450 to 500 USD/T and heading south - down from 1000 USD/T not so long ago. Given that RP is a feed stock for production of DAP there should be a correlation to DAP prices. At 450 to 500 USD/T we are back to the prices prevailing between April 07 and Jan 08. RP prices at that time...? MAKs presentations have a chart showing RP moving from about 75 USD/T in September07 up to 150 USD/T in December 07. At this price we are back in to marginal territory - for the short term at least.

In the meantime we have a whole bunch of options set to exercise by Dec 31. There seems to be a steady stream of announcements coming through to keep the interest up until they have the cash. I doubt that we will hear any mention of RP price until early in the new year at which stage the immediate fund collection issue has been dealt with.

As the options are exercised we will probably see bit of downward pressure on sp with profit taking.

In the short term I am expecting a move down. After that, who knows...

 

[Sean K]

Re: MAK - Minemakers

MAK due for resource upgrade at Wonarah.

Already have over 200Mt which is supposed to be significantly expanded. I wonder if they'll pluck the billions of tons inferred by the previous owners pre JORC.

Last pres regarding timelines etc:

100% owned by Minemakers

Currently 203Mt JORC compliant Inferred Resource
Substantial resource increases expected to be announced by year end
Aiming for production in 2010
Development favoured by key infrastructure already in
place

Major Project Status granted by Government

Aiming to be a low CAPEX producer
Stage 1 production planned at 3Mtpa
Expanding studies to include Direct Shipping Ore (“DSO”) alternative so as to minimise CAPEX and enhance early production capability
Targeting Asian markets where we have a freight advantage
Supportive Traditional Owners

 

[justiceotp]

Re: MAK - Minemakers

See the new announcement this morning.

Main Zone Deposit Quadrupled
and focusing on early start

should do alright today

 

[Sean K]

Re: MAK - Minemakers

See the new announcement this morning.

Main Zone Deposit Quadrupled
and focusing on early start

should do alright today

Good tonnage, but grades just OK. Previous was 23%...

Likely opex at the top end of my liking, and will probably expand.

Question is, will RP stay well above $150 tn to keep it feasable? The way DAP is going, who knows. Fingers crossed farmers keep buying **** for their lawns.

I'm not sure about OK today. Needed to be surprisingly good and this isn't to me. This is well factored in. Hope I'm wrong.


ASX ANNOUNCEMENT
WONARAH PHOSPHATE PROJECT
RESOURCE INCREASE, MINE PLANNING AND COSTS UPDATE
18 December 2008

HIGHLIGHTS
• Major increase in inferred resource at Main Zone Deposit – quadrupled to
330Mt at 18.9% P2O5
• Minemakers now has Australia’s biggest phosphate resource: combined
with the Arruwurra Deposit it totals 461Mt
• Focus now on early start, Stage 1 Direct Shipping Ore operation
• Beneficiation project planned as Stage 2 operation
• Ongoing studies on Direct Shipping Ore indentify capital costs of AU$75 -
$100M and operating costs of about AU$150 per tonne
• Targeting first production in about a year