CCU - Cobar Consolidated Resources

[mr. jeff]

If you read the latest announcement it is around March which explains the recent sell down. Hope that saved you 3 clicks.
The economics stack up well at these levels, although there is always the risk of the silver price coming off quickly. They are aiming for 2.5Moz/annum for 5 years, and drilling during that time for extension. Will be very profitable at these levels.

Do the figures.

 

[mr. jeff]

$6.50 / Oz costs for the silver.
That equates to a margin of about $25/Oz.
Over 2.0 Moz per year production that is $50M / year earnings after costs.
They've spent 44M on the build, plus extras for exploration and overheads, CCU will have in one year generated enough cash to pay back costs.

I haven't compared with other silver stocks for MC and production etc. which would give a better indication of whether there is a case for a decent re-rating in the next few months leading up to production. The market cap is 138M which equates to about 2.5 times earnings (limited to 5 years though until fiurther drill results). So it is up in the air in that regard as silver carries a much higher risk of volatility in pricing.

Look at the AYN chart leading into production, it was the hot silver stock to be on, and the dumping that took hold was very final. Now it is producing away with no recovery in price. They are working towards 1.5 Moz production per annum, MC 120M and costs not noted, but I see in their recent financial report that they made no money from silver production so far, so that may explain their poor performance to date. Taking a comparison between these two suggests that CCU would reach a market cap of 1.5 x AYN's current, due to their greater production rate per year and better grades and resource. (This is very rough and by no means accurate of course, but the point here is that CCU appears to be the better silver prospect on the market at this time.)



So in summary, this is one to watch and although it has been tipped as a stock to buy by some newsletters before, it has suffered a significant sell down whilst gold stocks have finally started to really fire, and note that the POG has shown great strength recently which if maintained may flow into POS. (lower dollar won't hurt either). CCU may be presenting a decent entry opportunity over the next 3 months, worth keeping a close eye on for sustained increased volume signaling some large accumulation.

 

[asc4]

great post mate. I'm bullish on silver heading higher in 2012 when ccu start production. From memory AYN has or had debt as well.

 

[mr. jeff]

To follow up on the November posting;



It is looking like a decent mover with the action showing the excitement building to production. Lets hope there are no hiccups, but so far so good, their updates have been showing work is to schedule and permits happening.

A BRR link may be of interest.

Good luck to holders.

 

[mr. jeff]

CCU has held above the 0.75 level now and is looking poised for the next move. It appears that today is another very low volume down day and potentially a great opportunity. I am posting from a biased position of course, but if you have a look at the chart from 7th posted previously then the levels are quite clear.

 

[mr. jeff]

Not much favourable action yesterday or today.

I have noticed this afternoon that there are offers for around 20 shares, which is obviously someone wanting to keep the price down to help maintain buying at a lower level, although when you look at the latest chart, it is clear that there has been a lot of selling today so opposing signals.

Does anyone have any input into this ?

 

[bucklenut]

Not much favourable action yesterday or today.

I have noticed this afternoon that there are offers for around 20 shares, which is obviously someone wanting to keep the price down to help maintain buying at a lower level, although when you look at the latest chart, it is clear that there has been a lot of selling today so opposing signals.

Does anyone have any input into this ?

Yes Jeff,
Watching this one with a keen eye.. Got burned on them last year and missed an entry point at 50c so hope to get another chance at them. Took a position in svl at 14c recently and that has worked out less than fantastic so far..

 

[mr. jeff]

Looking better, have recovered that selling and now broken that key 80c level, which was the next hurdle. If that can hold today (which it looks as though it will ) - the next leg should come in, looking at a high of 95c.

 

[mr. jeff]

Since last post, CCU have announced rain delaying site works.

This has today been followed up by confirmation that work has resumed and the production start is April. SO CLOSE!



Good news there. Eliminates any uncertainty.
CCU has come off from its strength and is worth keeping an eye on, (I am biased though). Selling has slowed and looking for increased buying on Monday.



Sorry about all the lines, looking for indications of what is happening. In hindsight topping volume was there and clear too; selling yesterday was solid, today has reduced. Interested in thoughts here.

 

[mr. jeff]

CCU is showing no interest in selling below 76c which is good sign that support at 75c is holding so far. There are parcels being placed (about 1283 shares per unit) on the sell at 0.76 which are topped up repeatedly. I have tested its reliability and the lots keep coming.

There are 2 weeks until silver is being poured on site and things are looking good so far with management to date showing reliable communication and works on site progressing. No update to the market since the 9th so will be looking for news soon.

 

[mr. jeff]

Production nearing with quarterly stating that production to commence in April and works on site to plan. It is late, but getting very close. If you read the quarterly you will see photos of leach areas, processing plant etc. almost completed and you may also note that the photos are from 18th April, so looking like they may make that April deadline even in the face of that adverse weather.
I have been waiting for this production and look forward to getting issued a silver medallion for being stupid and faithful. Stupid for hanging around long after it lost its trend up, and faithful because I have made good money here before and am returning to give it back like a weak trader. On the bid at 0.655 if you have any for me.



Note - My previous post was wrong on most counts.

 

[Buckfont]

Just had my sell order purged, one week early and one cent off before going into suspension.

Does anyone have insight into the situation as to what`s going on here. Just a bit miffed as I came so close to offloading.

 

[mr. jeff]

Just had my sell order purged, one week early and one cent off before going into suspension.

Does anyone have insight into the situation as to what`s going on here. Just a bit miffed as I came so close to offloading.

I will answer with a Pauline Hanson quote: " I don't like it"
Something funny going on with wide ranging bars showing danger, I'm stepping aside until things are more clear.
Safer stock out there.

cheers, Jeff.

 

[AllAussie]

I will answer with a Pauline Hanson quote: " I don't like it"
Something funny going on with wide ranging bars showing danger, I'm stepping aside until things are more clear.
Safer stock out there.

cheers, Jeff.

This company is very dodgey. Poor management and executive team. Will be sticking to AYN for my silver exposure - a lot more upside from increased silver price and also exploration potential

 

[battiwallah]

Has anyone given any thought to the Share Purchase Plan Offer, due Tuesday, 11-March? CCU is now producing at the stated capacity but is constrained by capital shortfall and a low silver price. Share price is now at an extreme low, can it go down any further? I am considering dollar-cost-averaging my small shareholding; the other option being abandon ship (maybe I should have done that a while ago!).