DMM - DMC Mining

[Largesse]

My Opinion.

Solid ANN, need to remember IO price hike due in coming months.
Opex of 22$/tonne is very low.
Capex for 3Mtpa sub 200mill USD, for 11Mtpa sub 500mill USD.

With a bit of luck, could probably raise 75%+ of the initial Capex in debt.
That... would be awesome.

 

[ans25]

Damn that sp went out of the roof, and then it settles down, im confused, day traders, more like late afternoon traders.
I really hope this stock is not going to be spoilt by traders, i thought with the amount of volume and current sp that it wont be subjected to day traders that much but I guess that's soon abt to change
I thought this was going to be in trading halt until wednesday morning.

So what do you ppl think? Will this go past $1.20 before end of this month?

 

[jbowman101]

little off topic here... question about T3 day traders


if a T3 day trader buys say 10,000 shares, can't they effectively keep there position open for a longer time buy selling there shares to themselves.

for example:
monday: buy 10,000 shares @ 80cents

wednesday: market price is 72 cents, they don't want to sell at that price.
So they sell the shares at $1.50 and then buy the same shares @ that price to reset there T3 trade. In this way they keep there positions open whilst only paying the commission.

is this possible, is this what they do ?

Cheers

 

[dj_420]

little off topic here... question about T3 day traders


if a T3 day trader buys say 10,000 shares, can't they effectively keep there position open for a longer time buy selling there shares to themselves.

for example:
monday: buy 10,000 shares @ 80cents

wednesday: market price is 72 cents, they don't want to sell at that price.
So they sell the shares at $1.50 and then buy the same shares @ that price to reset there T3 trade. In this way they keep there positions open whilst only paying the commission.

is this possible, is this what they do ?

Cheers

How did they sell the shares at 1.50 when market price is 0.72?

If they bought at 0.80 and sold at 0.72 they have lost $800, sorry you may have lost me? I dont understand the logic.

 

[jbowman101]

ahaha

that's the question...

if the market price is 0.72$ the day the T3 trade needs to be closed. is it possible for them to put their shares for sale at a price above the market say $1.50 and then rebuy those shares at $1.50 (reopening another T3 trade). in which case they have sold the shares to themselves to reset their T3 trade....

 

[dj_420]

ahaha

that's the question...

if the market price is 0.72$ the day the T3 trade needs to be closed. is it possible for them to put their shares for sale at a price above the market say $1.50 and then rebuy those shares at $1.50 (reopening another T3 trade). in which case they have sold the shares to themselves to reset their T3 trade....

Even if they put their shares up for sale at $1.50 above market price they will only be able to buy them at what the market is offering for 10 000 shares.

To reset their trade the sell will actually have to be actioned, in the past Comsec would actually deduct the shares off your account even if the sells were an outstanding order, NOW however the shares are only deducted after the sale goes through.

I dont know if this is what you are refering to?

If they buy 10 000 shares at 0.80 and sell three days later at 0.72 they will have lost $800 and reset the trade.

If they instead buy 20 000 at 0.72 they have lost $800 on first trade reset the T3 and opened another 10 000 trade.

 

[Sean K]

I think the only thing you can say from the chart is that it's trending up, but how high is not indicated. I anticipate resistance around the congestion and all time high between .98 and 1.08. So, that area would be my target, for now. On the downside around .80 is probably support. You would think it should correct naturally at some point, and I anticipate this $1.00 ish area. Or, maybe it just keeps going up in a straight line till $150? LOL.

Correction done IMO, and the SS confirms this is going to be a good operation.

ps..the Cup and handle is still in play at least

Yep, it could be. Handle is there, but a bit steep. Breakout though the tips of the cup at $1.10 gives quite a significant longer term target around $1.70 ish I suppose. Will be interesting to see how it goes.

(disclaimer, these projections are just likelihoods and no certainty of course)

 

[adobee]

ahaha

that's the question...

if the market price is 0.72$ the day the T3 trade needs to be closed. is it possible for them to put their shares for sale at a price above the market say $1.50 and then rebuy those shares at $1.50 (reopening another T3 trade). in which case they have sold the shares to themselves to reset their T3 trade....

If they put a sell at $1.50 and then a buy at $1.50 they would still have to buy everything below.. ie if there are 400000 shares at $1 they would be the first in cue to be sold ? correct me if I am wrong ..

 

[adobee]

Damn that sp went out of the roof, and then it settles down, im confused, day traders, more like late afternoon traders.
I really hope this stock is not going to be spoilt by traders, i thought with the amount of volume and current sp that it wont be subjected to day traders that much but I guess that's soon abt to change
I thought this was going to be in trading halt until wednesday morning.

So what do you ppl think? Will this go past $1.20 before end of this month?

From what I can see at the moment I am hoping this doesnt go below 60c buy the end of the month .. Nobody is buying this .. !

 

[YOUNG_TRADER]

How the hell did these financial papers get a hold of the scoping study figures pre ASX release?


I really need to see the whole scoping study before commenting but Ope Ex of $22/t is farking cheap!!!!!!!

Also CAP Ex of $200m??????????

SRK and SDL's Cap Ex's are like $2Billion to $4Billion

If DMM can get off the ground with just $200m they can then use "bootstrapping" to pay for expansions, ie use profits from small scale cashflow to get larger operation up


I can't wait for the ann

KEY FINDINGS OF THE REPORT

• Although the Mayoko Iron Ore Project is at a very early stage
of development the preliminary economics appear attractive
and therefore justify advancing to a more detailed level of
assessment.
• Direct shipping ore (DSO) production of 3Mt/a to commence as
stage 1, and to increase to 11Mt/a within 4 years.
• Existing rail capable of transporting 11Mt/a with minor
upgrades.
• Capital expenditure estimate of USD$198 million for 3 Mt/a
DSOoperation.
• Capital Expenditure estimate of an additional USD$288 million
(USD$486 million total) to achieve 11Mt/a DSO operation.
• Operating costs estimate of $22/tonne for 11Mt/a
• Revenue potential of USD$1.1 billion/a based on 11Mt/a at
current spot prices or USD$302 million /a based on 3Mt/a at
current spot prices.
• Timeline to production forecasted at 4 years to achieve 11Mt/a
operation.

Looks like it's in Pre-Open.. I think we may be in for a wild ride!.. good luck to all!

Mr Market why don't you ever make sense lately? lol

Well I'm still reading through the ann but from what I see so far I am very very impressed

Key points I like are

1. Very low Cap Ex when compared to SDL SRK and other oversea's operations

2. Very high margins givent he amazingly low Op Ex of $22/t

3. Short lead time to first stage production which will allow for boot strap funding


Here's the only negative for DMM: NO ONE KNOWS ABOUT IT!

Like I said I will hold this for what I believe is fair value

My Opinion.

Solid ANN, need to remember IO price hike due in coming months.
Opex of 22$/tonne is very low.
Capex for 3Mtpa sub 200mill USD, for 11Mtpa sub 500mill USD.

With a bit of luck, could probably raise 75%+ of the initial Capex in debt.
That... would be awesome.

Well this is the mkt isn't it,

DMM has come out with what can only be described as an amazing ann and no one cares, I hate to say it but perhaps sometimes maybe alot of forum chat is needed, I can't believe how cheap DMM are and to rub salt in the wound RIO got a 95% increase to the Iron Ore price,

This is why China is taking over ore resources companies left right and centre we Aussie investors have no clue on how to value them properly

 

[ans25]

Wow its below 70c now, im really frustrated, why is this going for less and less?

Just yesterday it hit 90c and now down 22c,??

 

[d_crome]

DMM need to take some serious steps to get noticed.

First thing they need to do is congratulate the person that issued the trading halt and then fire the person that decided to resume trading with only ONE HOUR to go on a DOW RED DAY...

They THEN need to HIRE SOME PR.

Some seriously loud, obnoxious, MAK/MXR style PR that'll ram this down peoples throats so hard that everybody and their taxi driver will know about DMM.

It's amazing this is flying so far under the radar that they're tunneling at this point.

 

[jonojpsg]

So what should DMC be valued at then? At their initial 3MTpa rate,they are making what $305m a year minus $66m opex gives $239m. They pay off the capital in the FIRST year which means they can basically pay for the production increase to 11MTpa themselves.

So in four years time, they are making around $800m a year profit!!!!!!

With around 30m shares on issue, that makes hmmm, let's see

$26 per share

Can someone check this for me?? Are we seriously saying that the current SP reflects this scenario????

I think I might sell up all my other positions and buy this while it is this crazily low.

 

[malachii]

Maybe this is a positive (!!!????). It is pulling a lot of short term traders out and triggering stop losses. If you are in this for the longer term - when this pullback is complete - it allows the price to increase as there are less people "bailing out".

Or maybe not!!

I've bought some more. I think the fundamentals are good. Some will see this as a buying opportunity - taking advantage of the "insanity" of the market.

malachii

 

[Sean K]

I agree with above sentiments. I'm just doing my own back of the envelope figures to see where it sits, but looks to have been sold off for ...... what?

Mr Market is speaking however, and it ALWAYS over and undershoots due to fear and greed.

Fear of what?

Potential 11Mt pa DSO?

 

[malachii]

If you're watching this morning's trades and depth of market (up till now 11.06am) the whole "drop" has been caused by half a dozen people all trying to see who can dump their stock for the lowest price. The band from .68 to .83ish have been there all morning - they just keep going .01 less than the last guy. There are no new sellers there - just people moving their price lower and lower until it hits a buyer. To me this shows that once these guys are out of the way - the downward pressure will ease and most other holders will not "dump" at any price. Like I said in the previous post - I'm buying because I think we will see a bounce - However - this stock is doing funny things so have your own opinion.

malachii

 

[alankew]

Kennas any glue for that cup and handlePerhaps its a mug instead.As i said yesterday there has been a lot of expectation built up over this with plenty of people buying in at the 90c plus mark.For some reason the market hasnt like the ann(not yet anyway)and some of these buyers at 90c are selling no matter what.When this moves,it really moves.I have held from IPo and sold a couple of times and have never managed to get anywhere near the yop(probably just me though)Remember the instos that have bought into this at the 80c mark and look at their past buys and how well they have performed.Just makes my job of deciding exactly when to sell much easier(I wont be selling yet)Pity Mr and mrs Kew have already spend the money in our minds

 

[d_crome]

DMM really should do a follow up announcement stating their plan to expand their initial JORC'd resource - get the market informed (and hopefully excited) about a rather probable increase in extractable resource.

With the Scoping Study set, this would be the next logical step.

 

[Sean K]

OK, my take on the basic funnies for this project:

3Mt DSO stage 1 ramping up to 11Mt DSO after 4 yrs.

Current forecast price per tn (from SS) range $50 - $300 a tn.
Let’s give an average of $150 for this basic analysis.

3Mt @ $150 = $450m
11Mt @ $150 = $1.65b

Capex $200m initial and $490m ish ramp up.
Opex: $22 tn x 3Mtn = $66m pa.

Projected revenue less Opex = $384m net on base case.

Current MC = 44m ish shares @ .70 = $30m MC

Extrapolating, initial Capex add $200m to MC (assume half equity, half debt, add 145m ish shares = 190m ish on issue, plus time to development ($20m pluck = 28m shares) = 44 + 145 + 28 = 217m shares on issue * current sp (70c) = $151m MC, at current prices.

On projected earnings:

$384m net at a pe of a random 10, gives an MC of $3.84b.

Projected SP anyone?

I'm a bit confused..

Please help me out here, this is obviously incorrect.

Kennas any glue for that cup and handlePerhaps its a mug instead.

Mug's still in play Alan.

 

[Largesse]

kennas are you factoring in the discount to revenue on the lower grade product?

also need to add risk discounts for: financing (200m), sovereign risk (low), future price movements (potentially negative)

regardless,
anyway you look at this, it is absurdly undervalued.

i for one am buying.