soho,
re your comment "dont completely understand it, 30mt was about the expected resource from what i remember? 1.24% is a little slim, but no big deal... "
They were expected to have 100mt, they were talking 59mt 4 years ago, so it is an absolute disaster for holders.31Mt at 0.8%Cu and 0.1 g/t Au is actually less valuable than EXS in pit inventories for the Cloncurry Project!Surprised CDU haven't been slammed harder.
No way they should be worth what they still are.
As Pjemmett elegantly calculated, now that we finally know how much copper we're sitting on, we can conservatively expect a share-price of around $10 when production begins (2012) using a P.E. of 7.
Thats a 400% improvement on todays price in 18-24 months, conservatively, and that doesnt factor in JORC updates, predators, rising copper prices, Wilgar drilling, and other discoveries.
I'm staying the course.
The 31MT are designed as input for 10 years to a 3MT per year processing plant. At 1.24% that makes 37000 tons of Cu equivalent per year, at around $A8,000 a ton (current, but very likely to rise) that makes $A296M per year revenue, say 30% costs then we arrive at around $A200 a year or approximately $1.50 per share per year. A P/E of 7 (just for arguments sake) and we have a reasonable share price of $A10 per share. Looking at the broader resources at Rocklands (245MT @ 0.42% ) and it's still very much a going concern for at least 40years, however the figures of $A100 a share that were being banded around is obviously unrealistic.
Has the selling been overdone ?, absolutely !!
As Pjemmett elegantly calculated, now that we finally know how much copper we're sitting on, we can conservatively expect a share-price of around $10 when production begins (2012) using a P.E. of 7.
Thats a 400% improvement on todays price in 18-24 months, conservatively, and that doesnt factor in JORC updates, predators, rising copper prices, Wilgar drilling, and other discoveries.
I'm staying the course.
its going to be ugly at open... you'll be able to buy this stock in the $1's today...
hard to know whether to sell the stock and take the loss or stick the course... dont want to have to believe (or hope) in best case scenarios to justify this stocks spot in my portfolio...
lucky my original position was only $5k... thats nothing compared to some...
its going to be ugly at open... you'll be able to buy this stock in the $1's today...
The company is still worth about $300m!!!! In my opinion, that is far too high considering that the dream has been shattered.
Soho (and other new members),
Please note it is an ASF rule that if you are going to post a price target that it needs to be supported by the reasons why you think this. Simply saying you think it will open at a price, without analysis, is considered as a ramp/fdownramp and will be removed.
should i have said "in my opinion you will be able to buy this stock in the $1's today"...?
what kind of reasons do we need to give to support this opinion? "my dog just barked at a bird, so i think cdu is going to get smashed at open"... is that a reason?
NVESTORS dumped copper explorer CuDeco's shares yesterday, almost halving the company's value after the release of a long-awaited resource update.
The dash to the exits wiped $320 million from the company's value, despite CuDeco doubling its total resource estimate for the Rocklands project near Cloncurry.
The report revealed CuDeco was sitting on 2.27 billion pounds of copper, worth more than $8 billion at current spot prices.
The Gold Coast-based explorer, which plans to start mining at Rocklands near Cloncurry in 2012, identified a measured and indicated resource of 30.94 million tonnes of copper graded at 1.24 per cent.
The initial grades are enough to sustain a 10-year mining operation producing 3 million tonnes a year.
But the total resource has been boosted to 245 million tonnes, measured at the lower grade cut-off of 0.42 per cent copper equivalent.
CuDeco chairman Wayne McCrae drew comparisons with Newcrest Mining's Cadia Hill open-cut mine which has a total resource of 408 million tonnes at just 0.12 per cent copper which has delivered pre-tax earnings of $548 million in the past year.
He said he was disappointed for small shareholders who succumbed to yesterday's panic selling which he said failed to take into account the total resource estimate and the potential yet to be uncovered by ongoing drilling.
The transaction of big parcels of shares yesterday indicated large investors were accumulating stock, raising fears that a weakened CuDeco could become a takeover target.
Among the buyers was CuDeco itself which scooped up around 200,000 shares.
"Any company that took over CuDeco tomorrow could put in a 15-to-20-million-tonne-a-year plant because today we've shown 245 million tonnes at 0.42 per cent," Mr McCrae said from the Rocklands mine site yesterday.
"The resource is good. There's nothing wrong with the resource."
Mr McCrae said investors who understood what CuDeco had in the ground 'had a field day like white pointers surrounding seals'.
Controversy has dogged CuDeco since the company originally announced an exciting copper, gold and cobalt discovery at Rocklands, located along the main transport route to Xstrata's Mt Isa operations.
CuDeco originally estimated an inferred resource of 59 million tonnes in 2006, sending its shares to a high of $10.
It was forced to pare that figure back to 25 million tonnes after a request from the Australian Securities Exchange.
CuDeco shares yesterday slumped $2.34 to close at $2.45 with 12 per cent of the company's stock changing hands.
They hit an intraday low of $2.25, which compared with a high of $6.59 reached last September.
EQN Capex was about $900m.On $300m revenue per year generating 50% cash flow with PE ~4.5, the NPV today is $650-700m. Subtract whatever capex is appropriate ($300m? $500m?) and you get the value of the mine itself.
EQN Capex was about $900m.
Their Opex is about $1.50-60 a lb.
Not sure if they're comparable though due to country and plant size.
Never seen a net income being done by % cashflow before.
I find that Capex hard to believe, on the surface of it. Must look in to it more I suppose.I only had access to EQN's latest half year financials and was trying to use a short cut method based on the relationship between revenue and free cash flow (so I can work out an NPV). Not the most scientific or accurate, but quick and dirty was what I was after.
The capex as per latest CDU announcement was $150-200m.
Based on this, the mine (if built) is probably worth ~$400m, which is probably a bit higher than the current market cap of ~$315m. So may be oversold afterall?
Looks like about 5 people who have droved over to ASF.GB - "People leaving HC in droves"
Do you have any evidence to support this?
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