EQN - Equinox Minerals

[Schmuckie]

Just read on a Canadian forum that 9.7 million shares crossed (it appears to have been a single transaction) on Friday.

 

[Schmuckie]

News announcement:

http://www.cnxmarketlink.com/en/releases/archive/May2008/13/c7981.html

Light trading on Tuesday on the TSX, but a 5 million share block apparently was traded on Monday and, as I now understand it, a 9.7 million share block traded on Friday.

I wonder if there's any connection between First Quantum's holding of 97 million shares and 9.7 shares (out of the day's total of 14 million) in one trade?

 

[Schmuckie]

You may want to have a look at this interview clip on Canada's Business News Network:

http://watch.bnn.ca/commodities-report/may-2008/commodities-report-may-16-2008/#clip53388

 

[dj_420]

EQN chart looking very good, the past few weeks have shown strong buying support around the 4.70-4.80 mark. This point has been tested several times and held on each occasion.

Interesting that the MACD first crossed back over from the downtrend on the first touch of the support. At this point it looked very oversold on the Stochastics. From this support point EQN has consolidated around the 4.80-5.10 range with increasing volume.

EQN has moved up to the 5.50 mark where historically it has been a resistance/support level. I would like to see the sp move up through the 5.50 mark and form a new base from which to attack old highs.

Fundamentally this technical movement could coincide with mine commissioning and a high copper spot. As well as director buying on market and tax issues 'seeming' to be sorted.

IMO downside risk from here is 4.80, upside potential could be a move through the 5.50 mark and push to historic highs.

 

[MRC & Co]

Yes, after that micro double bottom I thought this one had a stack of confluence (accumulation, double bottom, great FA value).

It is one of the 3 I hold in my long-term portfolio and have as of late, shifted more funds accross to EQN based on the above paragraph. Been buying around the $5 level and attempted a couple trades which turned out a zero sum game with price fluctuating but no trend or decent swing emerging.

I have been waiting for EQN to breakout for some time now, this may just be the run!

One of the most undervalued and supressed stocks on the ASX IMHO.

 

[56gsa]

Has served me well in the past but with tax issues and upcoming commissioning there's some potential downside in the short-term... not withstanding the fact potential takeover will negate these to some extent

some interesting numbers below - sorry for the formatting (does anyone know how to save a table/chart as an image??)

basically it shows eqn is valued at the lower end cf other Cu hopefuls, but has the largest Cu reserves of them all (6278kt) cf IRN's portion of Tampakan which is 4800kt

Market valuation of in-situ metal
PanAust Cudeco CopperCo Zambezi Anvil Equinox Matrix EXCO Discovery Indophil
US$/lb Cu 0.54 0.48 0.46 0.31 0.27 0.22 0.11 0.11 0.1 0.04
kt Cu (attrib.) 1500 440 360 68 1769 6278 276 403 352 4800

 

[Sean K]

1217 [Dow Jones] Share price weakness for Equinox Minerals (EQN.AU) makes company attractive to potential acquirers, says Credit Suisse. Canada's First Quantum (FM.T) is in box seat, already holds 17.3%, might even be able to fund bid at 100% premium, using debt. Equinox share price falls to near 1-year low of A$3.70 this week, down 26% since late June. Company's Lumwana copper project in Zambia was supposed to be commissioned last month, but fire at transformer delays progress. CS says Equinox immediate outlook clouded by Zambian fiscal uncertainty, but medium-term "stellar." Lumwana is 170,000-ton mine, one of largest additions in copper market in stressed supply environment. Other possible suitors OZ Minerals (OZL.AU), Xstrata (XTA.LN), Lumwana already has offtake agreement with major Xstrata shareholder Glencore. (EFB)

 

[BSD]

The Canadians got excited by the takeover talk - up 10%

http://www.tsx.com/HttpController?G...=&QuoteSymbol_11=&QuoteSymbol_12=&Language=en

Touched C$4.50

Shorts getting hurt having to cover.

My heart bleeds

EQN trading at 50% of value because of a 4 month delay in starting a 37 year mine.

Efficient market?

 

[Sean K]

Anyone got an update on these tax laws?

The last I saw it had to be debated in parliament. They have parliaments in Zambia? Wow!

I notice this in their last presentation:

However, Equinox has a Development Agreement (“DA”)
Legally binding DA signed in Dec 2005 (already high Copper prices)
Lumwana is ‘greenfields’ development – unlike other mines that acquired existing operations and infrastructure
Equinox has not been making ‘windfall profits’ – it has been investing $800m
Zambian Government recognises that Lumwana is different
The terms of the Equinox DA have been applied to date and the Government continues to do so

So, new tax regime won't apply? Or what?

Certainly looks like a good deal after coming off so far. I just wonder how much further commods have to correct with the general market. Damn, wish I had a crystal ball to see a date for the bottom!

 

[Sean K]

Anyone got a handle on their debt and cash?

As at September 30, 2008, Equinox had cash resources of US$51.8 million and undrawn debt facilities of US$151.4 million which includes the New Loan Facility ($80 million) as described earlier and the $45 million Contingent Funding Facility. The outstanding capital commitments of the Company relating to the construction of the Lumwana Mine at September 30, 2008 are $55.1 million.

So, they have no cash left???

Absolutely fantastic project, if copper was tripple the price....

Can't believe it got to $1.00. Must have been some great survival/panic selling going on there. Unless, of course, it goes into moth balls along with every other resource project....

Maybe we can all chip in and buy this and OZL for a few bucks....

Looks like a sitting duck to me.

 

[speculator101]

Hey Kennas.

Been watching this stock since it was just a little IPO.
As you say, it is an amazing copper company when copper prices are triple what they are on spot.
I will give you some figures from Huntleys latest recommendation...

Copper Price FY09 NPAT FY09
Sensitivities (A$m) Interest Cover (x)
US$2.00/lb 158.8 4.5 …. “Safe….
US$1.75/lb 111.2 3.6 ….. “ok
US$1.50/lb 63.7 2.8 …… “not too bad
US$1.25/lb 16.1 2.0 ….. “mmmm… still want it higher
US$1.00/lb -31.4 1.2 …… “not good but could be worse
US$0.75/lb -78.9 0.4 ……. “Not good…

“they are my comments!! Ha) – im trying to be positive!!

Its kinda scary, and I wont even show your FY10!!!! no good.
Unless like all the analysts are still sticking too, is a return to better prices...
Maybe it will happen, i mean, how long can the US dollar really stay up...
They are the ones that started this mess, and sooner or later resources will go up.. but when...
EQN is a great company, was def T/O material before the turmoil, and surely, it is still a great company to grab... But, you would need 2.5 Billion to buy it and clear debts... NOT in my pockets!!!!
IMHO.

 

[Project Director]

BSD, you slightly under scored the 4 month delay mate, more like a entire copper boom and covering a key 9 months. These events were always on the cards with AAX involved. If you see a AAX project run.

 

[rustyheela]

EQN

Equinox Minerals' output to lag forecasts - analyst
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By: Reuters
26th June 2009

Updated 7 hours ago -TORONTO -

Equinox Minerals will likely miss production and cost targets at its Lumwana copper mine in Zambia this year, Macquarie Research said on Friday.

In a note, analyst Pierre Vaillancourt said heavy rains and other factors such as a lack of available trucks would likely keep Equinox from meeting its production goal of 170 000 t of copper in concentrate at a cost of $1,15 a pound for 2009.

"We estimate the downside range to be 130 000-140 000 tonnes at costs of C$1,31/lb," he said.

He said it could be a "challenge" for the company to produce 170 000 t - the company's long-term target for steady production - in 2010 as well, although that will depend heavily on the length of next year's rainy season, he said.

Macquarie now expects output of 139 000 t this year and 163 000 t in 2010.

Vaillancourt expects Equinox to achieve steady output of 170 000 t over the next 12 to 24 months and possibly expand from there. He said the mine offers "attractive upside".

Kevin Van Niekerk, Equinox's vice-president of investor relations, said the company has not revised its production expectations for this year.

"We have not presently changed that guidance," he said in an e-mail. He said the company is currently in its "quiet period" ahead of release of its second-quarter results late next month.

Lumwana, which Equinox says is Africa's largest open-pit copper mine, opened in December after a five-month delay caused by a fire at the site's processing plant.

The mine was shut down for about 18 hours last week and lost 500 t of copper production during a national blackout.

Equinox, which is 16 percent owned by Canada's First Quantum Minerals, also mines uranium from Lumwana and plans to build a uranium processing plant when prices recover.

Shares of Equinox, which is based in Australia, but trades in Toronto, were down 5 Canadian cents at C$2,73.

The shares have doubled so far this year, helped by copper prices that have rebounded somewhat from last year's crash.

Edited by:

 

[Gunlom]

Re: EQN

For me and I guess so many other people one of the major lessons of this crisis is to take what is written by analyst and other 'experts' with a grain of salt.

They can provide some useful background information.

Even on the reduced output, and increased cash costs, that the analyst thinks. They are still on a PE of about 5-6 currently in there ramp - up year. With lots of upside still to come

Personally I think the management have done a great job getting this project online, Every major enterprise has it up's and down's, they have done a good job navigating through them so far.

PS . Am a Holder

 

[rustyheela]

EQN

anybody got any thoughts on why equinox hasnt /isnt being rerated?
cashburn, sovereign risk, ignorance?

It’s All Smiles At Equinox As Copper Production At Lumwana Gets Into Its Stride, And The Uranium Stockpile Grows Ever Larger

By Our Man in Oz

In the black, on the podium, and stacking cash. Take your pick of that trifecta and you’ll understand why Equinox Minerals chief executive, Craig Williams, had a broad grin on his dial when Minesite’s Man in Oz caught up with him for a quick chat at the Diggers & Dealers forum in Kalgoorlie last week. “We’re certainly starting to make good progress”, was his cautious response to the standard questions of performance and outlook. When pressed for detail Craig begged off, citing the imminent filing of the June quarter report, which made it to the stock exchange on Friday. The wait was worthwhile, as Equinox reported a maiden profit, and rising copper production at its big Lumwana mine in Zambia. But, somewhat curiously, that was not the main reason for Craig’s big smile.
"I’ve waited 13 years for a chance to make a presentation at Diggers, and now I’ve got it”, he said. Why it took so long for one of Australia’s more successful explorer/miners to win a podium spot is one of the mining world’s more interesting stories, and it has more to do with the way the event is tightly-controlled by a group of Kalgoorlie “mates” than with the delivery of any deliberate snub. “I guess my problem is I didn’t go to Kalgoorlie primary school”, was Craig’s one-liner, delivered with a laugh. Another issue that companies have to overcome is that Diggers is a “gold heavy” event with a preference for anyone operating within 100 kilometres of Kalgoorlie. That’s a problem for an African copper miner, which also has a growing pile of stockpiled uranium ore.

History aside, the point is that Equinox got its moment of glory in Kalgoorlie, albeit that it was a few days before the formal lodging of a stock exchange report, making it a somewhat cautious presentation. Much more information came in the quarterly. This contained both positive and negative detail. On the positive side, Lumwana generated a maiden operating profit of US$36 million in the three months to 30th June. After financing and other costs this melted away to leave an accounting loss of US$38.7 million. But, that loss, and a slow ramp-up in mining operations, could not diminish the joyous fact that around 10 years after Lumwana emerged as a potential mine development it is in now production, posting operating profits, and getting set for at least 37 years of productive life.

In what is the project’s first “normal” quarter after a protracted completion phase, which came complete with a delayed start-up courtesy of fire and flood, Equinox reported the mining of three million tonnes of ore for the production of 62,603 tonnes of copper concentrate. That equates to 24,413 tonnes of copper metal, or 53.8 million pounds, produced at a cash cost of US$1.44 per pound. Problems in the pit rather than in the processing plant dogged operations in the latest quarter even though mine fleet availability rose from 71 per cent to 89 per cent. “This availability needs to further improve and be maintained to meet production targets”, Craig noted in his management discussion.

Analysts also singled out the mine fleet for careful comment, with Goldman Sachs telling clients that the market “remains concerned at the rate at which Lumwana will ramp-up to full scale”. Despite this remark Goldman remains a staunch supporter of Equinox, maintaining a “buy” recommendation on the company, and putting a 12 month price target of A$4.25 on the shares, which are currently trading at around A$3.06. The profit forecast from the broker is that Equinox will report a full year loss for calendar 2009 of A$57.1 million, but that that will rocket up to a profit next year of A$196 million, and effectively double again in 2011 to A$358.8 million. That best guess puts Equinox on a 2011 price to earnings ratio of just 4.8, an interestingly low number, given the long-term nature of the Lumwana mine.

It’s the scale of Lumwana which sometimes seems to be lost on armchair critics who look only at the speed at which the mine is achieving its potential. This is not a small mine. It is one of the world’s biggest, and it has decades of production ahead, not to mention additional exploration potential both for copper and uranium. For newcomers to the Equinox story, Lumwana is an orebody containing copper-rich and uranium-rich structures. The copper material is the first to be processed because there’s much more of it. The plan is for Lumwana to achieve annual copper production of 170,000 tonnes, or 375 million pounds, at a long-term cost of US$1.15 per pound. The uranium-rich ore is being stockpiled because it would contaminate the copper circuit. A decision on a uranium processing circuit will be made once the copper operations are bedded down.

Over the past year the uranium stockpile has been a “sleeper” on the Equinox books which has interested everyone who looks closely at the company. In fact, technically it is more than a sleeper - it is actually being treated as waste from an accounting perspective. But, this “waste” material is starting to become extremely interesting, hence the reference in the opening lines of this report to Equinox “stacking cash”. At 30th June the stockpile of uranium-rich ore stood at 345,000 tonnes of material grading 800 parts per million uranium, and 0.7% copper. Putting a value on that is not easy, but for argument’s sake assume there is currently about 300 tonnes of uranium, or about 600,000 pounds (using the US measuring system of 2,000 pounds to the ton) which, at the current spot market price of US$48.5 per pound is about US$29 million worth of uranium. There’s also an additional 3,000 tonnes of copper, which adds up to another US$15 million.

Goldman Sachs is starting to echo the view of Minesite’s Man in Oz that the Equinox uranium stockpile is becoming a little hard to ignore, especially as it appears to be growing at a rapid rate. The broker noted that the mine will have stockpiled three million tonnes of copper/uranium ore by the end of the calendar year, all awaiting treatment in a new uranium plant. “This is an acceleration from the mine plan which envisaged 1.7 million tonnes by the end of 2009,” Goldman said. This is making the stockpile almost as interesting to watch as the Lumwana mine itself, as Equinox gets its mine fleet up to speed, and shakes off the last of the commissioning and ramp-up issues which have distracted management and investors.

 

[Project Director]

and then they had the COO in country run away from the scene.

wonder how long it may take to appoint the right man for the mine now.

rule one thanks.

 

[rustyheela]

EQN

pushed through resistance @ $3.55, near close on high of day, probably a friday retracement to be expected, if on low volume, and base metals, pus up next week, i bein ridin, i will ride!! biggest worlddwide copper producer cummin on line now!! right phase, right product, rightnow!!!

im no ramper, just my thoughts, have faith in your own research

 

[Out Too Soon]

Quite correct Rustyheela, more info to back your statements is always a plus tho but when the sp does what you said it would then you can always say you weren't ramping you just couldn't be bothered posting the reams of research you've done. (charts a lazier approach )

Still looks bullish to me although it would have been nice to be in earlier I beleive from my chart that it has the legs to run to 4.30 & hopefully beyond.
I'm on it now & will be adjusting my upper exit sp over the next few days (I hope)

 

[thierry]

Anyone know of any reasons for the 8% jump today?

its just gone past the previous high (1yr).


Just need a few more characters now....

 

[Sean K]

Anyone know of any reasons for the 8% jump today?

its just gone past the previous high (1yr).


Just need a few more characters now....

OZ Minerals is looking to buy some add-on copper/gold assets. EQN is probably on the shopping list along with CDU. Not many other decent copper prospects.