DMM - DMC Mining

[desolator]

whats with the drastic drop in price, and their is almost no buyers lined up for this stock anymore.. any1 care to speculate as to why people are moving away from this stock atm? jitters ?

 

[grace]

Comparison to SDL.....mmm, personally think SDL is overvalued.

SDL MC = $440 mill targeting mostly mag and 100 mill tonne or so of DSO in high sovereign risk nation.

GIR MC = $335 mill. Targets of over 1 billion tonne DSO in low sovereign risk nation. (targets of Earaheedy +1 billion tonne DSO, Weld Range 10-20 mill tonne DSO, Beebyganna 30 - 50 mill tonne DSO, Western Ck Pilbara 50 - 100 mill tonne DSO, McPhee Ck no target yet DSO from surface, strike length 8kms). Note that this doesn't even put a target on their mag......could be in the billions of tonnes at Earaheedy on a couple of hundred kms strike length. $70 mill in the bank + plenty of other listed investments.

My conclusion, SDL overvalued.

 

[lampard]

I'm with you YT, getting in early this time.

Has to be re rated sometime soon, it's just ridiculously valued at the moment.

 

[YOUNG_TRADER]

Well DMM looks to have bounced off 60c support, both the chart and the depth suggests 60c should act as good support going forward

Crazy really when you consider how cheap this is

Grace how overvalued is SDL? ? ? Surely your not going to say 12x overvauled, what 2x? so even if SDL was half what it is now, at 1/4th SDL DMM would still need to be 2x what it is

I'm going to keep saying it so I can say I told you so but I believe firmly DMM has 3-4x upside over the next few months

 

[Duckman#72]

Is the railway line heavy guage to be able to transport the ore? What is it currently used for? Does it have spare capacity? Who owns the railway line?

If you go to their website it provides some good guidance on this. I was quite impressed actually. Previously used to carry 3M tonnes of manganese annually. Considering the proximity it reads pretty well.

Hopefully onwards and upwards.

Duckman

 

[tigerboi]

whats with the drastic drop in price, and their is almost no buyers lined up for this stock anymore.. any1 care to speculate as to why people are moving away from this stock atm? jitters ?

Profit takers will send it lower & once the t3ers are finished watch it go...

monday will be a good guide,got a tip for this last week & decided to just watch...as with sdl i didnt like it because of the africa factor...much prefer an aussie IO..tb..

 

[grace]

If you go to their website it provides some good guidance on this. I was quite impressed actually. Previously used to carry 3M tonnes of manganese annually. Considering the proximity it reads pretty well.

Hopefully onwards and upwards.

Duckman

I did some calcs on that railway line usage. To move 250 000 tonnes a month they would have had their rail lines going up and back something like 11 return trips each day over roughly 500kms each way.

ie 250 000 tonne / 45t / 17 wagons / 30 days = 11 return trips per day.

I then compared pictures of this rail line to Fortescue's new line. This one looks pretty light to me. I expect the mining study will require a major upgrade to this 500 km line to take heavy iron ore. Just my thoughts, and I've been wrong before. Also need to build a port. Here is the initial infrastructure review.

http://imagesignal.comsec.com.au/asxdata/20080124/pdf/00805395.pdf

The railway was constructed around 45 years ago primarily for the transport of manganese ore to Point Noire. Discussions with government personnel and villagers indicate the ore was transported in 17 wagons, each of 45t capacity being pulled by two locomotives at a rate of 250,000 tonnes per month.

Not saying there is not upside in this, just making readers aware that there could be major costs for infrastructure like all iron ore projects.

 

[d_crome]

Hate to play devils advocate on this one - but there are some disturbingly large impurities of silica in some of the results issued by the company - any thoughts of how this could be the potential reason DMM is currently "undervalued"??

 

[YOUNG_TRADER]

Devils advocate is fine,

People played plenty of that on YML at 16c CUL at 5c and recently ACS at 15c-20c

It amazes me how time and time again people choose to look at the glass is half empty point of view,

All I'm saying is take everything in perspective

Ask yourself the following questions

What is SDL's Mkt Cap? = $450m - $500m
What is DMM's? $35m - $40m

How many companies are there listed on the ASX with a JORC of 33Mt's@55.5%Fe with upside target of 125Mt's@57%Fe as well as 770Mts@40% Fe all for under $50m mkt cap? please give me a list

So the current Haematite has impurities, ok well whats the mag worth? ? ?
Most W.A. based deposits of that size are selling 70% for $250m cash + keeping a 30% free carried interest, so what would DMM get?

Let me guess because its Africa DMM will get $2 for an 800Mt Mag deposit and a lolly pop if there lucky? ? ? ?


I'm sticking to my guns here and will happily buy more around 60c, it will be interesting to look back on this in 1-3months

 

[d_crome]

YT mate - I never doubt your prowess in finding a gem amungst the rough - however by nature I'm a straight shooter and will generally state what I'm thinking.

In this case it's like I've walked by a 2007 Ferrari with a big "FOR SALE" sign on it with an asking price of 20K....so sure it seems to good to be true - hence my mind will say "if this is such a good deal, why is it still here?".

Unless of course the most overlooked fact is that it's simply cheap because nobody else has noticed it - while you're the optimist, I by definition am a pessimist though if shown enough data I'll swing my opinion.

I guess my point is that I feel this is "too good be true". I mean, HUGE resource, existing infrastructure nearby - I mean, join the dots and this thing SHOULD be booming - though it isn't.

Again - I know a stock market isn't driven by rationalities - it's driven by emotion and sentiments which can possibly explain this stock.

I'll keep watching - but I'm on the fence right now.

And maybe not a lollypop - maybe a Choc Wedge and we're talking...lol

 

[YOUNG_TRADER]

D_Chrome that wasn't directed at you mate

+ I was having a bit of fun

Anyway I just grabbed more of the "Ferrari" at 60c :

p.s. Choc Wedge? one of those Mars Bar Icecreams maybe, or a Magnum, ok I'm drolling on my keyboard now lol

 

[d_crome]

LOL - give me an Orange Sunnyboy and we'll call it even. LOL

I know that you weren't attacking me or my view but just reinstating your determination of value - it's all good.

 

[tigerboi]

I did some calcs on that railway line usage. To move 250 000 tonnes a month they would have had their rail lines going up and back something like 11 return trips each day over roughly 500kms each way.

ie 250 000 tonne / 45t / 17 wagons / 30 days = 11 return trips per day.

I then compared pictures of this rail line to Fortescue's new line. This one looks pretty light to me. I expect the mining study will require a major upgrade to this 500 km line to take heavy iron ore. Just my thoughts, and I've been wrong before. Also need to build a port. Here is the initial infrastructure review.

http://imagesignal.comsec.com.au/asxdata/20080124/pdf/00805395.pdf



Not saying there is not upside in this, just making readers aware that there could be major costs for infrastructure like all iron ore projects.

I work in the transport industry & ive just had alook at the line & the wagons(by the way comparing this with fmg is akin to a ferrarri v model t ford) the line & wagons will need to be upgraded to modern standard..for me its an ugly look...1960's gear to run in the 2000's...mmm but being africa its going to get done cheap but its the quanity & quality thats needed...

how far is it from the mine to port 1 way?fmg is 260kms...tb

 

[grace]

I work in the transport industry & ive just had alook at the line & the wagons(by the way comparing this with fmg is akin to a ferrarri v model t ford) the line & wagons will need to be upgraded to modern standard..for me its an ugly look...1960's gear to run in the 2000's...mmm but being africa its going to get done cheap but its the quanity & quality thats needed...

how far is it from the mine to port 1 way?fmg is 260kms...tb

I haven't been able to find the distance per company announcements, but given SDL's distance of 600km odd, this line looked about 500km odd in comparison. I did a rough calculation on screen....very rough by the way. Happy to be corrected.

Any company can find iron ore these days, but getting the transport organised is the biggest hurdle all speccies face in my opinion.

 

[enigmatic]

Hey YT just reading a few of your posts. was wondering when you mentioned

"DMM Mkt Cap $36m JORC 33Mt's@55.5%Fe + historic/target 125Mt's@57%Fe+ 770Mts@40% Fe."

Where does the 125Mt's@57%Fe comes from and what is this 770Mt@40% Fe. Are these Historical estimates.
Cheers for your input in advance.

 

[YOUNG_TRADER]

Hey Enigmatic,

They were historical estimates/deposit however don't qualify for the JORC code, new work and re-assaying has been done and thus we have a JORC and upside targets

See the ann released Wednesday Morning

Cheers

p.s. So does SDL have any existing rail at all along their 600km path? ? ?

I'm no engineer but I've heard that saying "Its easier to walk the path well troden" ie surely its alot easier to upgrade an exisitng rail line than it is to build a new one ? ? ?

 

[YOUNG_TRADER]

Well another one of my no brainer undervalued stocks has been re-rated 100%,


I will keep saying it but at current levels DMM are so ridiculously undervalued well you know the rest,

Do yourself a favour guys look at the mkt cap of DMM, then look at others such as SDL, even the ones in W.A. with nothing but targets ie MDX even MXR today and then ask yourself is it a matter of if or when? ? ? ?

 

[alankew]

YT have you ever looked at LML,might not be in the same league as DMM but they are in OZ and have infrastructure coming out of their ears.JV with an Indian company,results due soon form IO project and other they are not a one trick pony.Apologies for hijacking thread

 

[Sean K]

Apologies for hijacking thread

LOL Alan. Maybe a PM would have been better, or have you posted something in the LML thread?


This does still seem way undervalued as YT has identified. I`ve only just had a chance to look at the ann and love that they`ve ben able to ramp the 800Mt numbers again, on top of some more qualified DSO.

Good recovery yesterday. Was really surprised with the sell off the other day. Must have been longer term holders trying to cash in, or day traders getting in and seeing the price fall, bolted for the door. Weird.

(holding)

 

[YOUNG_TRADER]

Alan had a look,

Its a spec with a target, no drill holes nothing I could find to really back it up, no where near the same as DMM so not comparable at all


I've found some very interesting info on DMM today such as what do DMM SDL and AGO have in common?????

Answer = They all have the Insto PASSPORT CAPITAL http://www.passportcapital.com/ as a backer, go to the web page and you will see Passport is a $4Billion + Fund which no doubt has a very large research division

So ask yourself why would a large Multi Billion Dollar fund who has obviously spotted value in SDL and AGO waste its time with DMM?

Well it obviously see's something there of great value, SDL is a $500m mkt cap company, AGO now is over $1BILLION and DMM? ? ? $40m

I'm going to check to see what other Iron ore plays Passport has a stake in, so far they seem like advance $500m - $1Billion Mkt Cap companies which bodes well for what they must think of DMM