DMM - DMC Mining
- Thread starter Sean K
- Start date
-
- Tags
- dmc mining dmm
Thought I would post this up over here for scrutiny as well.
Alright here goes my attempt at valuing DMM.
It is really my first attempt at valuing resource stocks or stocks at all for the that matter. Im more use to real estate, but I will apply the same principals and see where it gets us.
Keep in mind these figures are EXTREMELY rough.
All the information is taken from the there recent presentation:
Production: 11 Mtpa - 4 years from now
Capex: $486,000,000
Opex: $22 / tonne
Revenue: $45 / tonne (lower end of their estimates)
Capex: 486,000,000
Revenue: 495,000,000
Opex: 242,000,000
Operating Profit: 253,000,000
Interest Payments on Capex (@ say 10%): 48,600,000 pa
Net Profit: 204,4000,000
Project 80% owned so profit to DMM: 163,520,000 (4 years from now)
Apply discount rate of 25% (fairly arbitrary if anyone knows a more realistic rate let me know) to future cash flow gives us a value of:
$66,980,000
No. of shares on Issue: 68,967,867.
Each share has a value of: $0.97 OR say $1.00.
Now everyone pick holes in my work!
Alright here goes my attempt at valuing DMM.
It is really my first attempt at valuing resource stocks or stocks at all for the that matter. Im more use to real estate, but I will apply the same principals and see where it gets us.
Keep in mind these figures are EXTREMELY rough.
All the information is taken from the there recent presentation:
Production: 11 Mtpa - 4 years from now
Capex: $486,000,000
Opex: $22 / tonne
Revenue: $45 / tonne (lower end of their estimates)
Capex: 486,000,000
Revenue: 495,000,000
Opex: 242,000,000
Operating Profit: 253,000,000
Interest Payments on Capex (@ say 10%): 48,600,000 pa
Net Profit: 204,4000,000
Project 80% owned so profit to DMM: 163,520,000 (4 years from now)
Apply discount rate of 25% (fairly arbitrary if anyone knows a more realistic rate let me know) to future cash flow gives us a value of:
$66,980,000
No. of shares on Issue: 68,967,867.
Each share has a value of: $0.97 OR say $1.00.
Now everyone pick holes in my work!
- Joined
- 25 January 2007
- Posts
- 165
- Reactions
- 0
Some one must have spotted this from yesterday.
"DMC Mining Limited requests a trading halt to be placed on the Company's securities effective immediately pending the release of an announcement by the Company regarding details of material capital raising."
Thoughts?
"DMC Mining Limited requests a trading halt to be placed on the Company's securities effective immediately pending the release of an announcement by the Company regarding details of material capital raising."
Thoughts?
- Joined
- 25 January 2007
- Posts
- 165
- Reactions
- 0
Trading Halt
"...pending the release of an announcement by the Company providing an update on exploration activities".
Drilling only started about a month ago but it must be something interesting to warrant going into a halt.
"...pending the release of an announcement by the Company providing an update on exploration activities".
Drilling only started about a month ago but it must be something interesting to warrant going into a halt.
Just look at me raise the roof on these deadwood stocks! I wonder who buys these things if nobody talks about them?
Well after selling their soul to CFE/Dempsey lets look at whats happened since:
- 30% increase in exploration target at Mayoko to 0.9 - 1.3 Billion tonnes
- Apparently drilling work is getting sent to W.A for metallurgic testing
- A director raked in 1,000,000 unlisted options
- That's about all...what a boring bunch.
They seriously need some PR work. And do to some work rather than handing out options and pay packets to people who do nothing
Maybe we can hope for a t/o? After all they pretty much have the infrastructure all set...just a little engine that can to get them over the line:
Well after selling their soul to CFE/Dempsey lets look at whats happened since:
- 30% increase in exploration target at Mayoko to 0.9 - 1.3 Billion tonnes
- Apparently drilling work is getting sent to W.A for metallurgic testing
- A director raked in 1,000,000 unlisted options
- That's about all...what a boring bunch.
They seriously need some PR work. And do to some work rather than handing out options and pay packets to people who do nothing
Maybe we can hope for a t/o? After all they pretty much have the infrastructure all set...just a little engine that can to get them over the line
:Well well well after much selling down, pumping up and selling down today we find that CFE is to offer 40c for each 1 DMM share. We have the resource - but no cash . They want the resource presumably to sell off and they have the cash.....
Announcement out about an hour ago.
Discuss - Pro's cons
Announcement out about an hour ago.
Discuss - Pro's cons
Laurie wherever you are...i now feel your pain.
Pretty livid with this lowball bid from CFE. Would have liked a bit of scrip in there as well. 40 cents is just crap.
Sadly, the bid will most likely go through as CFE already retain 32+ % of issued shares and have a member on the board. Looks like it's game over for DMM. Maybe I shouldn't have hoped for the t/o.
Correction...CFE own 36%...also I was right! DMM did sell their souls to CFE to survive.
But therein lies the question...would we really be around to receive 40 cents p/s if we had not received the convertible note?
Also, what are the plans of the directors etc? Would like to see their recco's...
It's interesting to note the potential size of the resource DMM were targetting as well the fact they had a lot of infrastructure in place. Was fairly 'advanced' in a sense when compared to other I/O hopefuls but was also a bit primitive as well (in respect of infrastructure etc)
No doubt CFE will package this up and send it on its way to the Chinese for a princely sum...
No love.
P.S there still lies an arbitage play here for 1 cent if anybody believes the deal will go through and are keen.
DYOR
But therein lies the question...would we really be around to receive 40 cents p/s if we had not received the convertible note?
Also, what are the plans of the directors etc? Would like to see their recco's...
It's interesting to note the potential size of the resource DMM were targetting as well the fact they had a lot of infrastructure in place. Was fairly 'advanced' in a sense when compared to other I/O hopefuls but was also a bit primitive as well (in respect of infrastructure etc)
No doubt CFE will package this up and send it on its way to the Chinese for a princely sum...
No love.
P.S there still lies an arbitage play here for 1 cent if anybody believes the deal will go through and are keen.
DYOR
Sean K
Moderator
- Joined
- 21 April 2006
- Posts
- 22,131
- Reactions
- 11,230
Was hard to see these guys going anywhere without the Chinese, or a takeover by a talented crew. Are CFE talented? Whatever, maybe a good result for more recent holders, but those jumping in around the $1.00 might not be so happy. And I agree JTLP, CFE will probably sort them out shake off the dead wood, get some backing and sell it off for a handsome sum.
I don't think CFE are talented in the fact that they would bring the project into production...that's not their game. They will probably just confirm a resource...get as far as a PFS or DFS...showing some pretty figures and projections and then flog it off. So maybe talented salesmen...not production crew.
Holders at $1 would be mad as cut snakes...I bought at a bit of a premium to the current SP and if I was keen as mustard i'd buy up big to lower my average and get the arbitage. But then I guess if it hasn't even hit the t/o price people don't believe in it or are just suckers?
The company has come out after market close and said to take NO ACTION...seems like this has come from nowhere from CFE? (don't see how...they have a friggen board member on DMM for crying out loud).
I don't see how a 30% or whatever CFE quoted premium to the current SP is a justifible amount? I guess they know that owning a vast majority of the co will stop others flirting with the possibility of a counter bid...hence the low ball and crap offer.
Frustrating as the project looked the goods but you're right Kennas...they really needed some heavy Chinese influence (JV or otherwise) or a better t/o offer to get this up and running...
Just my thoughts on DMM.
This looks to be a known but not expected t/o. Surely DMM had an inkling that CFE might make a tilt after getting an interest...just look at CFE's history and they have a member on DMMs board.. Whether they thought it would happen now is the question...and I suspect they didn't.
IMO and what DMM should so is to conduct an independent valuation report (much like DIO did with KPMG for the AVO t/o)...get the accountants to slap their usual over-valuation on it and take it back to CFE and say "We want 'x' not 40 cents'. Obviously the chances of getting the upper end valuation from the auditors report will be very slim to none but at least it gives DMM a roof for a price and they can work backwards to a better deal currently being offered from CFE. 40 cents p/s is no doubt a steal by CFE but I've mentioned before; CFE can play cheap because the odds of a white knight rescuing DMM when CFE hold over 36% are extremely slim.
Here's hoping the DMM board have got a better figure in mind also...
This looks to be a known but not expected t/o. Surely DMM had an inkling that CFE might make a tilt after getting an interest...just look at CFE's history and they have a member on DMMs board.. Whether they thought it would happen now is the question...and I suspect they didn't.
IMO and what DMM should so is to conduct an independent valuation report (much like DIO did with KPMG for the AVO t/o)...get the accountants to slap their usual over-valuation on it and take it back to CFE and say "We want 'x' not 40 cents'. Obviously the chances of getting the upper end valuation from the auditors report will be very slim to none but at least it gives DMM a roof for a price and they can work backwards to a better deal currently being offered from CFE. 40 cents p/s is no doubt a steal by CFE but I've mentioned before; CFE can play cheap because the odds of a white knight rescuing DMM when CFE hold over 36% are extremely slim.
Here's hoping the DMM board have got a better figure in mind also...
And there you have it...a superior offer of 46 cents per share. Not surprising that when the morning started and trading began it ran right up to 48 before coming down to 46 and what do you know...trading halt!
Can't really see CFE offering a superior bid. I'd actually prefer 10 cents a share + 1 CFE share but that won't be happening. Maybe the max this will get to is 50 cents...
Can't really see CFE offering a superior bid. I'd actually prefer 10 cents a share + 1 CFE share but that won't be happening. Maybe the max this will get to is 50 cents...
And there you have it...a superior offer of 46 cents per share. Not surprising that when the morning started and trading began it ran right up to 48 before coming down to 46 and what do you know...trading halt!
Can't really see CFE offering a superior bid. I'd actually prefer 10 cents a share + 1 CFE share but that won't be happening. Maybe the max this will get to is 50 cents...
Glad I hung onto my very small parcel of these.
50cents is my break even. Wouldn't that be nice to get my money back.
Glad I hung onto my very small parcel of these.
50cents is my break even. Wouldn't that be nice to get my money back.
Well Grace you could sell out for a less then 10% loss and maybe crystalize all that against your massive windfalls in the CSG sector
:DMM had so much going for it...sadly the directors didn't have the PR machine in mind and were happy to amble along...picking up pay cheques and partying in Africa (this may be a bit of a joke
)Wish they could have pushed harder to see how close production could get...would have been an interesting case if they actually got there.
Well Grace you could sell out for a less then 10% loss and maybe crystalize all that against your massive windfalls in the CSG sector
DMM had so much going for it...sadly the directors didn't have the PR machine in mind and were happy to amble along...picking up pay cheques and partying in Africa (this may be a bit of a joke
Wish they could have pushed harder to see how close production could get...would have been an interesting case if they actually got there.
So the current price of DMM is below that of the mystery bidder's 46 cents. Not a lot of confidence in that bid. CFE counter bid likely? Probably not. Let's face it...DMM aren't in that much of a commanding position...they sold their souls to CFE for money in the first place.
50 cents would be nice and i'd definitely take it too Grace. Time and bidders statements will tell...
So Tony Sage, big wig at CFE, has basically come out and said that CFE are determined to take DMC out and this Chinese bid is a surprise to them. He pretty much hints at an increased bid (note: does say that CFE do have a massive upperhand with their shareholding and haven't really looked through the opposing bid's terms yet)
The video can be found via this link: http://www.cnbc.com/id/15840232?video=1470386526&play=1
And the part that concerns DMM holder's is from 2:10 onwards.
The video can be found via this link: http://www.cnbc.com/id/15840232?video=1470386526&play=1
And the part that concerns DMM holder's is from 2:10 onwards.
I'm changing my tune big time on the boys at DMC.
They have come out with a Take Over Activity update (ann today on the ASX) and said that the offer from CFE is opportunistic. They are in the midst of preparing a target statement with an independent experts valuation (read - more money if bidders are prepared to come to the party).
Current valuations stand between 94 cents and $2.31 (this maximum range is from Tony Sage, CFE big wig himself, who valued DMC at a Market Cap of $200m!!!).
Good luck to holders and this war may just wage on a little longer...
P.S Grace you got your money back...you must have an angel on your side...
They have come out with a Take Over Activity update (ann today on the ASX) and said that the offer from CFE is opportunistic. They are in the midst of preparing a target statement with an independent experts valuation (read - more money if bidders are prepared to come to the party).
Current valuations stand between 94 cents and $2.31 (this maximum range is from Tony Sage, CFE big wig himself, who valued DMC at a Market Cap of $200m!!!).
Good luck to holders and this war may just wage on a little longer...
P.S Grace you got your money back...you must have an angel on your side...
You have to have a win sometimes.
I can't even say why I kept this - only the price was poor when I was getting rid of some dead wood and I really didn't think it was worth the brokerage to sell (my dead wood was GIR, BRM and UMC when I was thinking China was going to start caving - still hasn't happened - I get plenty of things wrong and have learnt now not to pre-empt the market).I have had a few die a natural death though. And yes, I often think someone was watching over me during the GFC - I was very naive to the market - but managed to survive and even do quite well all things considered.
