DMM - DMC Mining

[grace]

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

Kennas, sorry, but where do you get $300 from?
Rio new prices locked in Pilbara Lump $201.69, Fines $144.66.

Call me a worry wart, but the rail line is still of concern to me. One section is 36kg/m (80lb). Fortescue is 68kg/m (150lb). That is just about half as strong as FMG's. Anyone know will it take the weight? It is very very light!!!Scoping study gives a bit of a general disclaimer on it (need more investigation).

 

[Sean K]

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.

Yep, need to add them in too. There's lots to discount I think. Like tax? Royalties? 80% ownership?

Will add in as other ASF'ers identify other costs.

Thanks!
kennas

(I'm sure YT (LN) could add to this and wouldn't mind a DCF from pattyp)

 

[Sean K]

Kennas, sorry, but where do you get $300 from?

Thanks Grace, I've missread the SS pricing I think.

What is the average price we should be using for DSO, or a range?

 

[Largesse]

Kennas, sorry, but where do you get $300 from?
Rio new prices locked in Pilbara Lump $201.69, Fines $144.66.

Call me a worry wart, but the rail line is still of concern to me. One section is 36kg/m (80lb). Fortescue is 68kg/m (150lb). That is just about half as strong as FMG's. Anyone know will it take the weight? It is very very light!!!Scoping study gives a bit of a general disclaimer on it (need more investigation).

would this have been factored into the CAPEX for the 11Mtpa operation?
as in an allowance for upgrading this section of the rail?

How many Mtpa are Fortescue expecting to move though? I wouldve thought much larger quantities than DMM.
If we are moving half of what FMG move, i'd be satisfied...

 

[alankew]

Will they get the same price as Rio/BHP,havent read their ann on price rise but there was talk of a shipping premium for Aussie io.Vale got a smaller price rise(70%?)

 

[Largesse]

Also, we need to consider are we going to be looking to sell to a contract or on the spot market?
Rio has locked in roughly 200$(USD?) lump, we would discount by 30% i would expect due to inferior quality.

 

[Sean K]

Agree with above. Still points to $150 ave doesn't it?

Of course, will fe stay high into the 2010s....??

Demand from BRIC says yes, supply is a question. Lots coming on....

 

[d_crome]

Kenna's - anyway you do the math - this is still ridiculously undervalued.

SP has recovered - I suspect this will be a slow, progressive climb north.

Given the spec type stocks that rapidly rise and fall - I'm happy to see slow, positive progress rather than a rapid rise and decline.

 

[prawn_86]

Demand from BRIC says yes, supply is a question. Lots coming on....

Depending on the investmet timeframe, this is my biggest concern over the 'hot' IO sector at the moment.

Many of those who are planning to be mining will be competing with a whole batch of 2nd teir miners coming online at the same time, in about 5 yrs time. Obviously im not an economist, but i think its something people need to be aware of.

 

[Largesse]

11:03 119,540 68 19,535 XT
11:03 119,188 68 15,000 XT
10:59 114,575 68 7,350 XT
10:54 106,249 68 1,200 XT

These lucky buggers have made a cool 20% today.....

 

[adobee]

Well I have sold out my small position.. sorry guys for now I dont like this one.. if it goes heaps lower I may reconsider or if I see some intrest forming again may reconsider.. There is about as much interest in this as nukes in Iraq!

I am thinking something may be a bit fishy here ... has anyone done any investigation to the directors or the like .. I note the very first post on this thread referes to them doing a bit of a ramp.. With no evidence at all I get a strange feeling like the market is wary.. I am sticking with homegrown wa miners for now..

 

[jbowman101]

have faith and patience people...

this is a valuable stock!

it's fundamentals stand and it may take a few months for the public to cotton on to this but i am confident this stock will experience some nice capital growth over the coming months.


in regards to all this issues raised: impurities, sovereign risk... yes, these are risks. But they certainly don't justify the large discount that is present on this stock.

Also currently there is a shallow buy depth but what can you expect it's a tiny Perth company. As the company progresses with it PR and drilling people will start to take notice, it's just a matter of time and patience.

KEY: DSO, 100MT hematite , 700MT magnetite, small capital outlays, small cap expenses

think about it....

 

[grace]

YT, now don't have a heart attack......I took a punt on this one today.

GRD Minproc did this scoping study.....just how good are they? They said they didn't even inspect the whole rail line.....good one! Petrol prices must be getting expensive!

 

[Largesse]

Email sent to investor relations.....

Hi Dean,

Firstly, I was very impressed with the Scoping study. A lot of detailed work looks to have gone into it, and it presented a clear picture of the projects potential.

What now is DMC’s next course of action? And what time frame will it be operating within? The reported stated that it’s findings were dependant on the ‘streamlining’ from pre-feasibility to bankable resource, does the company have a prospective timeline in which this will occur? Will it be shared with shareholders? (If it has been stated in a previous announcement please direct me to it).

Lastly, I felt, and I know this feeling is shared with numerous other shareholders, that the decision to release the announcement in the last hour of trading on an obviously depressed day for the broader markets was perhaps lacking a little wisdom. Given the company had a day up it’s sleeve with the Trading Halt until Wednesday, surely it would’ve been better to hold off its release until Today (Tuesday) with the idea in mind that the Dow would have bounced off it low and the broader ASX would have had a more positive air about it for the announcement to be released into.

We all understand that capital raisings are a necessary part of financing start-up resource companies, share price improvement needs to be a priority now so to avoid excessive dilution of shareholders wealth when the inevitable Capital Raising occurs.

Having said that, I still intended increase my position in DMC in multiples as the scoping study has significantly de-risked the project to me.

Kind Regards,

xxxxx

...and reply

Hi XXXXX,

We are very pleased with the research and development that GRD Minproc have done on the Company’s behalf, the Director’s view was that by initiating a Study that exceeded requirements and to have had GRD Minproc view at first hand the infrastructure, as well as meet with relevant Government authorities this will allow key agreement negotiations to proceed quickly and effectively.

Our internal view is that the positive review of these key pieces of development, independently supported by Minproc, gives a further level of optimism for an effective development of the Mayoko Project.

DMC will now be working on negotiation of Port and Rail agreements, accelerating Offtake discussions with interested parties, geological resource definition through its third quarter drilling campaign and metallurgical test work to provide the required information to move to Pre-Feasibility as effectively as possible.

The Company is also working to increase its profile among the Institutional, Investment and Broking Community, with a positive Scoping Study a significant cornerstone of that strategy.

In terms of the market, the Company will always work to release information in a timely manner for its shareholders, on a day to day basis the concern of the Company is the development of its assets not on the day to day permutations of the marketplace.

Thank you very much for your support and interest in DMC, the Directors and Staff are working to maximize returns to all our shareholders, and we appreciate the information and feedback. Please feel free to contact me on the number below or on my mobile number xxxxxxxxxxxx.

Regards

Dean Richardson
Investor Relations Manager


Key points underlined.
Would've loved some dates but you know how it goes

 

[YOUNG_TRADER]

YT, now don't have a heart attack......I took a punt on this one today.

GRD Minproc did this scoping study.....just how good are they? They said they didn't even inspect the whole rail line.....good one! Petrol prices must be getting expensive!

Oh me Oh my, I better call a medic :

Glad to have you aboard Grace, perhaps you too see the potential upside that I saw from the start,

Although it looks like the mkt is blind to it,

I think GRD Minproc are pretty reputable, I see them advertised all the time next to major International mining companies etc, but that could just mean they have a big advertising budget

 

[Miner]

YT, now don't have a heart attack......I took a punt on this one today.

GRD Minproc did this scoping study.....just how good are they? They said they didn't even inspect the whole rail line.....good one! Petrol prices must be getting expensive!

Grace

Interesting postings today from all over
I saw your query on rail size - bloody fabulous and correct. I am guessing you are just not a pretty grace but having a strong background in technical

With the size of rail given the tonnage will be very low but it will be still better than truck and depending on car size the transportation will be okay
The production rate is lower than FMG's long term plan 200 mTPA so DMM rail is okay until the production goes up

GRD Minproc is a reputed organisation and listed in ASX
Its chairman is ex Premier of WA Mr Richard Court
Even if former Minproc escalated the FImiston expansion from $125 M to $159 M in 1996, still I will not raise a finger on the capability on GRD Minproc

However in the scope of scoping study there are always many exclusions to bring the cost down and often it is Level C estimate that is allowance of 30% cost increase by design. This is not unique but industry standard

Having said all of the above the scoping study is pretty good I would say
But scoping study alone will not deliver and there is a long way to go between actual production and commencement of engineering. FMG was unique but see SDL, MOL, GBG, BML the gestation period varies between the strength of engineering and capital deployment

Once again before DMM enthusiastics hound me I have no cynism against DMM scoping study or GRD capability

 

[ans25]

I cant believe this, its really taking a hammering of late and now its back down to 70c.

Im really thinking twice about this one

 

[Largesse]

price is being manipulated.

small vol sell down, big buy steps up.


don't sell your self short just yet

 

[d_crome]

Ans - general peice of advice as I've noticed a theme to many of your posts.

Rome wasn't built in a day!!

If instant returns are what you want, take a punt down at the TAB or Crown Casino.

If however you chose INVESTING - chose your stocks based on sound fundamentals and principles - much like DMM - you'll get your return - but it won't be an instantaneous one.

Do you think the actual business plan, resource or demand for it has changed in the last 48 hours?

No - it hasn't. The only thing that has changed is the share price - which is an instant price indicator - nothing more. Those who placed a "bet" they couldn't finance are simply cutting their losses - these are TRADERS.

Don't make an investment you can't afford to lose.

So my point is - be positive - choose wisely - and don't watch the ASX every 3 minutes!

Again - this is my philosophy - I'm by no means a financial expert, so if you want professional investment advice, I suggest you find a pro or DYOR.

 

[eclectic_nish]

great post !! and well said...just a pity i could have picked up much cheaper....but whos to know.

Holding...and happy...good luck