CBH - CBH Resources

[goldman]

I live in the area and the ore at rasp mine found to be high grade, that has been mined while declining has allready paid for the broken hill operation. Been in contact with many Broken Hill miners and i can assure that .65 cents is a bargin and strongly reccomend upto a $1.00 in value per share.

Take it from someone who is in the know

 

[GREENS]

I live in the area and the ore at rasp mine found to be high grade, that has been mined while declining has allready paid for the broken hill operation. Been in contact with many Broken Hill miners and i can assure that .65 cents is a bargin and strongly reccomend upto a $1.00 in value per share.

Take it from someone who is in the know

I knew that the high grade ore was being mined while the company is in process of finishing the decline to the main part of the ore body, but would not have presumed that it would have already covered the costs of development.

Isn’t that just what I said, “It is trading at around a 42% discount to its intrinsic value” given a relatively conservative production forecast that did not even take into account the throughput of the high grade ore from broken hill. However Goldman I fully agree that this company does seem like good value at these prices, maybe investors are still incorporating a certain risk factor in to the share price given the past troubles of the endeavour mine (which is holding the SP back a little) and hopefully the company will be re-rated as it becomes a multi-mine company and a more diverse base metals producer (i.e. increases its copper production).

 

[goldman]

I agree Greens. Having spoken to a number of those involved with the endeavour mine I have no fear that we will see a repeat of what happened in 2005. they have explained the measures taken to stop any further cave ins and also what caused the cave in, in the first instance. the previous company had taken more dirt from that area then records had indicated. CBH has done well to make money from an unstable mine such as endeavour.
I look forward to seeing how well they do with the Rasp mine, if they do as well in Broken Hill as they have in Cobar the shares are a great buy at .63.

 

[PBH]

The only reason the shareprice is currently hanging around $0.63 is that the technical traders have decided $0.65 is a good place to set up shop and construct a barrier.

However, with the fundamentals stacking up so favourably at the moment, and becoming more favourable by the day, expect this barrier to be wiped out VERY soon. Once the floodgates have opened, I'm picking it to race up to $0.77 - $0.78 in short order, and continue it's long term ascent from there.

Good value?
CBH will soon (in a couple of years) have THREE(!!!) fully operational mines pumping out zinc and lead. And as the outlook for base metal prices in the medium to long term looks decidedly positive (IMO anyway..), this should produce a very healthy cashflow.
What is also important to note is the fact that all these mines are located in what, from a geopolitical point of view, would have to rate as one of the most stable and business-friendly countries anywhere on this planet. So what you end up with is a risk/reward ratio that, with the SP anywhere below $0.95, I'd be willing to stack up against ANY other mining company, any time, any day.
So from my point of view, the answer is a definate "yes".

As always though; DYOR!

 

[Stan 101]

It was reassuring to see CBH hold its position in yesterdays trading when some resources were on the decline. usually CBH reacts strongly to any drop at all.
Zinifex lost ground yesterday on a few strong trading days and usually, in my experience, that means CBH will chase a lower price strongly. This is the first confident step CBH has taken in some time.

 

[goldman]

Why would anyone in their right mind decide to put a stop on at .65 dosent appear too technical too me

 

[nizar]

Why would anyone in their right mind decide to put a stop on at .65 dosent appear too technical too me

Yeh i was thinking the same thing.

Traders, unlike investors (who sell when fully valued) usually DO NOT limit the upside.

Dont try to find a reason for share price movements -- they are beyond your control.

But KNOW what to do if the share price goes up, down, or sideways -- will you be buying, selling, or holding?

Leave the analysis to the analysts, the guys that go on TV and make predictions, when they are wrong they can make an excuse, when they are right they beat their chests. LOL

 

[Dutchy3]

I must say how disappointed I am with the CLOSE this week. Looked the goods during the week and yet ...

Teach me to buy actual breakouts rather than my fantasy of what should be a breakout ... still long ... so upset I don't even have the heart to post a chart

 

[porkpie324]

When comparing CBH with Zinifex it looks like CBH is dragging the anchor a bit, but I'm sure that will change as the zinc price appreciates, porkpie

 

[GREENS]

When comparing CBH with Zinifex it looks like CBH is dragging the anchor a bit, but I'm sure that will change as the zinc price appreciates, porkpie

Considering CBH and ZFX should be relatively positively correlated, as both share prices are heavily reliant on zinc prices and to a lesser extent lead prices. However we have seen a change in this relationship since both companies were at peaks in late 06 (i.e. when both companies hit there peaks around the same time). After Friday’s close we can see that ZFX is trading around 3.5% of its 52 week high while CBH is trading around 29.5% off its 52 week high. Quite interesting considering Zn prices have come well of their highs and out of the two companies you would think CBH would be less affected given its considerably large exploration and development upside, with two new mines coming into production over the next 1.5-2 years and ramp up off their currently producing mine Endeavor taking place this year and into 08. As I’ve said before maybe some investors are staying on the sideline with this one until it does become a multi mine company given the past problems with the Endeavor mine.

The latest CBH presentation has just come out, quite an interesting read, But what drew my eye was that the company plans to hedge a quarter of its base metal and foreign exchange exposure over the next year starting from June 2007. The company also expects to be producing by 2008/09; 225,000 tones of Zn concentrate, 90,000 tones of Ld concentrate and approx 75,000 tones of copper in concentrate.

Anyway CBH faired considerably well this week given the fall in Zn prices (7%) for the week.

 

[GREENS]

CBH up around 5% on extremely strong volume of 7.3 m to $0.63 as at 11:30 am, and nearing that strong resistance level at $0.65. Lauchlan, Kennas and UMike from a Fundamental view I did a few conservative figures on CBH for the full year 07 (i.e. start Jan – end of Dec) and have not yet completed the following years, this is a summary of what I came up with:

Assumptions:

•Total ore output of endeavor mine is around 1.05 million tonnes for 07 which is well below the full capacity of the mine (1.2-1.3m tonnes p.a.). Out of this is approx 6.6% Zn, 3.5% Ld, with recovery levels of around 85%, 81% respectively. In additional to their main base metals production the mine produces around 15,500kg of silver & 1,000t of copper.
•Using average prices received for 07 of:
Zinc – US$1.60/lb
Lead – US$0.80/lb
Silver – US$12/oz
Copper – US$3/lb
•Used around a 20% profit margin to take into a/c all the exploration and development activity the company is currently undertaking at Sulphur Springs, Broken Hill and the Cobar district.
•Company has approx 780m shares on offer.

Risks:

•This company like most does not come with out its risks however problems have plagued the Endeavor mine in the past, cave in of part of the mine occurred at the end of 05, where production was stopped for a prolonged period of time.
•Management are unreliable, announcements come out months after there due and production levels seem to always fall short of there expectations.

Result:

Given the company continues to trade on a PE multiple of 10 the company should generate EPS of around $0.09 which equates to a market cap = 702m i.e. a 42% premium to what they are trading on in intraday this morning (Aspect Huntly has forecasted EPS for 07 and 08 of $0.06 and $0.11). The company has some potential upside with two new mines to come online over the next 2 years which will see a three fold increase in copper and a significant rise in zinc and lead production.

Greens

my bad, got this wrong there are more than 780 million shares on offer, in fact 830 million, but considering I used a PE of 10 (which I would believe to be considerably low for the growth profile of this company) the same result would be very close. If it still trades on a PE of 10 then EPS would fall to $0.084 instead of $0.09 implying a market capitalisation of approx $690m.

 

[countryboy]

Cobar must be having some issues with labour...not sure what...maybe management just trying to do things cheaper ? i think Monday will see a drop in CBH as the market follows fridays New York numbers.

 

[chicken]

bought into CBH......at 60c today....see Minebox Kangaroo Sipas results...this must be a ver undervaled mineral play.....comments

 

[muddy]

I bought this at 62.5 a while ago and its been in the red since, but i have faith in this one.

 

[doctorj]

bought into CBH......at 60c today....see Minebox Kangaroo Sipas results...this must be a ver undervaled mineral play.....comments

Why is it undervalued? Can you please share your analysis Chicken? What would you value it at?

You can do better than that Chicken!

 

[Ken]

CBH...

Margin lending ratio is 50%.

Interesting long term play in my opinion.

I think its good value.. but does the market?

 

[peterke]

The value of CBH depends on your belief of future ZN prices. If you believe that ZN will be above $1 for the next few years then CBH is great value with a value of $500m and $250m cash, a pe of around 4 and significant growth prospects.

However if ZN declines significantly with the new supply entering the market from late 07 then CBH is looking far less profitable and their new mines marginal.

Many of the analysts believe ZN will fall over the next few years hence CBH and other ZN companies are on low multiples.

However with the major resource companies undergoing a sector revaluation at the moment ( BHP up 50% in a few months etc) this will flow down to the second tier companies shortly.

I've held CBH for awhile now and remain optimistic

regards


Peter

 

[michael_selway]

bought into CBH......at 60c today....see Minebox Kangaroo Sipas results...this must be a ver undervaled mineral play.....comments

The only thing I dont why is 2009 forecast EPS is only 3.5 and in 2008 its 10.8?

Thx
MS

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS -2.8 6.1 10.8 3.5
DPS 0.0 0.3 1.8 0.5

EPS(c) PE Growth
Year Ending 30-06-07 6.1 9.8 --
Year Ending 30-06-08 10.8 5.5 77.0%

 

[Stan 101]

CBH...

Margin lending ratio is 50%.

Ken, NAB have CBH on 60% margin, if that's of any benefit to you. It has been for some time now

Cheers,

 

[Freeballinginawetsuit]

The value of CBH depends on your belief of future ZN prices. If you believe that ZN will be above $1 for the next few years then CBH is great value with a value of $500m and $250m cash, a pe of around 4 and significant growth prospects.

However if ZN declines significantly with the new supply entering the market from late 07 then CBH is looking far less profitable and their new mines marginal.

Many of the analysts believe ZN will fall over the next few years hence CBH and other ZN companies are on low multiples.

However with the major resource companies undergoing a sector revaluation at the moment ( BHP up 50% in a few months etc) this will flow down to the second tier companies shortly.

I've held CBH for awhile now and remain optimistic

regards


Peter

Thats a very simplistic model on CBH's PE/MC and bears no resemblance to there 06/07 financials or notes on issue to be converted in due course.

Its more than reasonable too assume that CBH are in a net tangable position to realize there pipeline of forward growth with COH and forward earnings to fund future CAPEX with minimal further dilution.

A close look at CBH on a peer comparisson, would clearly idicate too blind freddy that .............. CBH are the pick of the bunch, from a forward production profile.

As for the resource blue chips undergoing a sector revaluation, not really....just catching up too some fair value whilst still maintaining reasonable levels across the broader index...... hyped by the more speculative stocks in recent times !.



Note: currently hold CBH