GCR - Golden Cross Resources

goldmandane · 2 May 2008

Young trader,

I respect your opinion too, infact I really like reading your analysis, as it has value to it.

I just want to put point forward, instead of only looking at the upside.

I actually work at Goldmans myself, and we just aren't into speccys here, so i guess its ingrained in me a bit to look at the high risks. But I'm trying to get into adding some to my portfolio now, so really looking around at the poo brigade haha

YOUNG_TRADER · 2 May 2008

lol Dane so thats what the "Goldman" means and here I was thinking it had more to do with Autin Powers Goldmember,

I just think at current levels GCR is cheap, sure there's lots of risk but I'd say thats factored into the SP at current levels,

All valuations aside, I'm sure given the current Agri Euphoria if GCR released an Ann re its Phosphate project the stock would move up very strong on high volume as all the trading agri punters jumped in on it, its happened with MNM and STB both of which only have dirt with some possible agri in it, ie no actual deposit, also I'm sure sooner or later those who've made a killing on the 2 leaders of the poo brigade (ie MAK and RWD) will look for the next "Agri player" I don't know of anyother dirt cheap agri stocks with deposits than GCR, if there are others out there please PM me so I can research them

p.s. why are you so sceptical of the OTC Mkt, is it b/c its easy to maniupulate or something? I thought it was the US equiv of say London AIM

YOUNG_TRADER · 2 May 2008

I just realised I have been rather sloppy in the way in which I have presented information on GCR, I'll try and group everything together over the weekend but for now will group together the info I have on the 2 mian projects being Copper Hill and Mt Isa

Projects
Copper Hill Copper + Gold, 100%, NSW

JORC 133Mt's@0.31%Cu + 0.28g/t Au = 1g/t + Au Equiv

Now although the deposit is low grade its gold equiv grade is not too bad ie 1g/t Au, but the main Pros and Cons are as follows

http://www.goldencross.com.au/properties/copper-hill/default.html

Pros
- Exisiting infrastructure, rail, town, workforce, equipment etc etc
- Very low waste to ore ratio 0.6:1 this reduces the cost of hauling dirt, for example an operation grading say double Copper Hill but had a waste to Ore ratio of say 2:1 would be less economical as alot more dirt is required to be moved etc etc SO THIS IS A MAJOR FACTOR
- Copper Hill copper concentrates contain no deleterious elements and may attract a price premium. (further metallurgical test work is required)
- Current NPV indicates a very very large return
- Located in Australia = very safe and mining friendly nation to operate it albeit with Environmental green tape

Cons
- Huge Cap Ex = requires the backing of a major partner via either direct farm out or perhaps even offtake with commodity groups etc
- Low grade ore = high cost production (partially offset by low waster ratio) but = requires premium base metals prices to be profitable

NPV
Also here you will find the companies NPV calcs http://www.goldencross.com.au/properties/copper-hill/default.html

It is clearly shown that even using a $600 AUD Gold price vs Current $950+ and a $2.65 AUD Copper price vs current $4.20+ an 8Mt p.a. operation will generate an NPV of $270m ($600m - $330m)

Now even if GCR farmed out 80% of this project to be free carried, that would still = a Net Attributable NPV of $54m = 8.5c

IGV for interests sake
Copper Hill contains 1.2Moz's Gold 420kt's Copper
using current spot prices ($1000 AUD gold and $4.40 Copper)

I.G.V. Copper Hill = $5Billion

I'm not saying hey Copper Hill is worth Millions I'm just saying given the balance of the pros and cons I think you can just cross of Copper Hill as adding value to GCR, but do agree to really take the project seriously the funding via a JV or Offtake needs to be established.

p.s. There is also the EXPLORATION POTENTIAL at Copper Hill, I'd say they are looking to find higher grade satelite ore bodies etc

YOUNG_TRADER · 2 May 2008

Ok before I go any further I think its very important that anyone hoping to understand exactly what GCR's Phosphate potential is read this report

http://www.goldencross.com.au/properties/mount-isa/PDF/Phosphate-20071224.pdf

also more info can be found on the companies web page

Projects
Mt Isa Phosphate, 20% Free Carried by Legend Corp, Qld near Mt Isa and near to Incitecs exisitng Phosphate mine

Qld Govt Historic JORC 500Mt's@15%Phosphate

Now this is a historic resource and the only reason it deosn't meet the JORC standard is because it was defined prior to the existance of the JORC code, ie any deposits no matter how ell defined that were established prior to the JORC code don't meet it, but really its just a technicality

See for yoursefl on the Qld Govt Minerals Database
http://www.vizmap.com/NRM/Commodities/493685.htm
http://www.vizmap.com/NRM/Commodities/491206.htm
http://www.vizmap.com/NRM/Commodities/494076.htm
http://www.vizmap.com/NRM/Commodities/494100.htm

GCR's JV partner is Legend International a major Phosphate player in Aust, for more info on Legend see http://www.lgdi.net/

Now Legend are working towards getting the whole project area towards production, they recently completed a scoping study and have an updated presentation which shows cost etimates, margins, production scenarios and resulting profit scenarios as well as timelines etc well worth a look http://www.lgdi.net/pdf/Legend_Phosp...ril_2008v2.pdf

Valuing Mt Isa
EV
Now the task of putting a value on Mt Isa, my prefered method of valuation is to use an Enterprise Value or EV which simply gives a company a value per tonne of given resource

Now because the Poo sector is light on companies the easiest and most obvious way to extract an EV is to determine the EV being attibuted to GCR's big brother Legend

Legend current shareprice = $3.10 with 200m shares fully dilluted its MKT CAP is now $620m US = $680m AUD

Legend has a NET 1.3Bt's@15% Phosphate (1.4Bt's but 100mt's is GCR's)

$680m With 1.3Bt's@15%Phosphate = 52c per tonne ore @15% Phosphate or $3 per tonne Phosphate

GCR has 20% of 500Mt's@15%Phosphate = Net 100Mt's

@ 52c/t = $52m 8.2c GCR

To keep an eye on Legends share price ann's and mkt cap see http://www.lgdi.net/inc/redirect_share_price.php but remember the Mkt Cap given doesn't take into account the 20m or so options and thus is 10% under what it should be

A % OF IGV
Another methood used (though I'm not sure how credible) is to use 10% of a deposits IGV as the value attributable to a company. I AM NOT A FAN OF THIS METHOD

Mt Isa PHOSPHATE:
500Mt's@0.15%P = 75Mt's of Phosphate

The current spot price for Phosphate is $350-$400 US/t = say $400 AUD roughly

So I.G.V. Mt Isa = 75Mt's x $400/t (current Phosphate Price) = $30BILLION now even though GCR 20% they have a net attributable amount of $6Billion

10% IGV = $600m = 95c

Conclusions Mt Isa
- Based on my prefered valuation the EV GCR is worth 8c+ on Mt Isa alone
-GCR is one of only 4 ASX listed companies with an actual Agricultural deposit
IPL's mkt cap is $8Billion
MAK's mkt cap is $275m
RWD's mkt cap is $130m
GCR's mkt cap is $25m

- GCR's deposits are between 60kms-150kms from IPL's operating Phosphate Mine
- GCR's project is part of a bigger project for big brother Legend kinda like the CUL/AQA relationship, the big brother has the deep funding pockes and expertise needed to advance these projects to production allowing GCR to advance its many other projects

pattyp · 2 May 2008

You are speaking my language Young Trader...

Excellent & detailed change to your posting. If no-one else, you have at least convinced me to review this one in detail...

I like seeing the numbers laid out in front of me

Though corps under 10c make me yak every time they move against me

Cheers.
Pat

refined silver · 3 May 2008

goldmandane said:
Mate,

the copper hill property is a dud! Very unlikely they will get a developer on board, not economically feasible, it's too risky to think Au a and Cu will remain at an economically vialbe price for this

FIRST POST EVER HERE!

One of the daftest things I've read here, but you follow with more later!!!

I bought GCR solely for Copper Hill, as its assumptions on future gold prices were so low $450, (a bit higher now, but still way too low) that no wonder the project looked marginal. As I believe Au has a long way up to go yet, at some stage Copper Hill will be go from being thought of a nothing, to a superb project and will be re-rated quickly.

You also say you work for Goldman. They have an atrocious but understandable gold forecasting record for the last 8 years. They have continually been bearish on gold, always forecasting the future at lower prices than present, and been wrong every year as Au has gone up every year for the last 8. Goldman also are an agent for the Fed in shorting the gold market, and so its understandable why their forecasts are always bearish.

As for OTC being "bollocks markets" and trusting nothing from there. Would you suggest its better to trust bigger cos like Enron, Freddie and Fannie, Countrywide, Ambac, Bear Sterns, etc??

Maybe Goldman dismisses "speccies" becasue they are too small to get clients into or even get into themselves in a meangful way, but small caps have way outperformed large caps in general and are generally better value.

Read, Sell Goliath, Buy David By Aaron Gentzler for results of a very large study. Below is an excerpt.

http://www.howestreet.com/articles/index.php?article_id=6166

According to a 17-year study conducted by investment firm, Tweedy, Browne, low-valuation small-cap stocks dramatically outperformed their large-cap counterparts between1963 through1980. "One million dollars invested in the smallest fifth of the companies listed on the New York Stock Exchange, which were priced in the bottom fifth in terms of price/earnings ratios, would have increased to $19,500,000 over the 17-year study period," Tweedy, Browne concludes. "By comparison, $1,000,000 invested in the largest market capitalization stocks with the lowest price/earnings ratios would have increased to [only] $8,107,000 over the same period. During the period, the annual investment returns for the market capitalization weighted and equal weighted NYSE Indexes were 7.68% and 12.12%, respectively. One million dollars invested in the market capitalization weighted and equal weighted NYSE Indexes wou ld have increased to $3,518,000 and $6,992,000, respectively."

Overall, that's not too shabby a result for small cap stocks. But financial media coverage tends to ignore small-caps and focus primarily on large caps. That's too bad. Investors are missing out.

The Russell 2000 might not be shooting sparks at this very moment, but it is generally keeping pace with the year over year progress of the much bandied-about Dow Jones Industrial Average.

My point is this: Anyone you encounter who exclusively pushes the large-caps doesn't truly have your best interest in mind.

There are tons of strong deals out there in the small-cap world. Those who hype the large caps to the detriment of all other classes are the groupthink-ers and "conventional wisdom" followers who say Goliath could never lose and that nice guys always finish last.

Sean K · 3 May 2008

goldmandane said:
Young trader,

I respect your opinion too, infact I really like reading your analysis, as it has value to it.

I just want to put point forward, instead of only looking at the upside.

I actually work at Goldmans myself, and we just aren't into speccys here, so i guess its ingrained in me a bit to look at the high risks. But I'm trying to get into adding some to my portfolio now, so really looking around at the poo brigade haha

LOL, now we have Goldman ´s going off YT ´s tips. he he.

Just joking goldmandane.

If I may be so bold as to comment on YT ´s investment strategy, he probably wouldn ´t go near a Goldman recommendation with a 10 foot pole. It ´s all RR and at the microcap, before they are rerated, or even start mining. A long long long way from pe ´s and the like. That is the end of the market where you get multibaggers in short time, take the $$ and move on. Seems to work alright if you put in the research time like YT does.

So, you may not like this stock because it ´s ´risky ´but that is where the big money seems to be made IMO. It ´s obviously where big money can be lost too.

Uncle Festivus · 3 May 2008

kennas said:
So, you may not like this stock because it ´s ´risky ´but that is where the big money seems to be made IMO. It ´s obviously where big money can be lost too.

True, but @ 4c and now with some momentum behind them it's worth a penny punt . I have re loaded up, just need some timely announcements to bolster the enthusiasm & keep the thing on the boil (can't let those daytraders get bored eh ).

I also see China has severley restricted fertiliser exports too, and commensurate boost to global prices. Not good for food prices though.

YOUNG_TRADER · 3 May 2008

Hey Refined Silver,

Yeah I guess when looking at Copper Hill their just trying to be cautious
But I find it vry re-assuring that using $600 AUD Gold price vs Current $950+ and a $2.65 AUD Copper price vs current $4.20+ an 8Mt p.a. operation will generate an NPV of $270m ($600m - $330m)

It seems amazing given the precieved low grades but after doing a bit of reading I'm starting to realise that the waste to ore ratio is also a very important number to look at when examining open pit mines as it will determine how much dirt (and resulting cost) will be incurred to access the ore

As I have stated the Cap Ex is the big hurdle requiring the deep pockets of a JV partner or Offtake agreements in place,

Something interesting is that after considering Goldmans thoughts on Copper Hill I asked a perth based broker mate for his thoughts, whats interesting is that although he wasn't blown away at all by Copper Hill he reckons that GCR is apparantly in discussions or something for offtakes at Copper Hill THIS IS NOT CONFIRMED and I'm waiting for him to send me the links or article where he read this

If true this would be a real turning point for Copper Hill and GCR

YOUNG_TRADER said:
Projects
Copper Hill Copper + Gold, 100%, NSW

JORC 133Mt's@0.31%Cu + 0.28g/t Au = 1g/t + Au Equiv

Now although the deposit is low grade its gold equiv grade is not too bad ie 1g/t Au, but the main Pros and Cons are as follows

http://www.goldencross.com.au/properties/copper-hill/default.html

Pros
- Exisiting infrastructure, rail, town, workforce, equipment etc etc
- Very low waste to ore ratio 0.6:1 this reduces the cost of hauling dirt, for example an operation grading say double Copper Hill but had a waste to Ore ratio of say 2:1 would be less economical as alot more dirt is required to be moved etc etc SO THIS IS A MAJOR FACTOR
- Copper Hill copper concentrates contain no deleterious elements and may attract a price premium. (further metallurgical test work is required)
- Current NPV indicates a very very large return
- Located in Australia = very safe and mining friendly nation to operate it albeit with Environmental green tape

Cons
- Huge Cap Ex = requires the backing of a major partner via either direct farm out or perhaps even offtake with commodity groups etc
- Low grade ore = high cost production (partially offset by low waster ratio) but = requires premium base metals prices to be profitable

NPV
Also here you will find the companies NPV calcs http://www.goldencross.com.au/properties/copper-hill/default.html

It is clearly shown that even using a $600 AUD Gold price vs Current $950+ and a $2.65 AUD Copper price vs current $4.20+ an 8Mt p.a. operation will generate an NPV of $270m ($600m - $330m)

Now even if GCR farmed out 80% of this project to be free carried, that would still = a Net Attributable NPV of $54m = 8.5c

IGV for interests sake
Copper Hill contains 1.2Moz's Gold 420kt's Copper
using current spot prices ($1000 AUD gold and $4.40 Copper)

I.G.V. Copper Hill = $5Billion

I'm not saying hey Copper Hill is worth Millions I'm just saying given the balance of the pros and cons I think you can just cross of Copper Hill as adding value to GCR, but do agree to really take the project seriously the funding via a JV or Offtake needs to be established.

p.s. There is also the EXPLORATION POTENTIAL at Copper Hill, I'd say they are looking to find higher grade satelite ore bodies etc

refined silver · 3 May 2008

YOUNG_TRADER said:
Hey Refined Silver,

Yeah I guess when looking at Copper Hill their just trying to be cautious.

No, I appreciate your analysis, and bringing to light the fertiliser aspect which I have to admit I didn't know much about, I knew a lot more about the other lesser projects.

I've done similar analysis on pieces of paper at home before buying, but tend to present here in a much mroe abbreviated form, often not even spell checked. (For me its "typing checked" rather than "spell checked"!), let alone, set out nicely, highlighted, cloured etc. Well done, very easy to follow.

You've also done very well in laying out the value in IRC. Maybe I should send you a few more I have with v good value (IMO) and let you present them!

YOUNG_TRADER · 3 May 2008

Refined Silver and others thanks for the kind words, I enjoy doing it so its a pleasure really,

I'm still waiting to hear back from my friend re GCR in Offtake discussions for Copper Hill, has anyone else out there heard anything? As I said if this can be confirmed it would be a serious turning point for the company and the project as securing "Offtakes" can sort out the project funding issue

As soon as I hear anything I'll let you guys

goldmandane · 3 May 2008

guys,

Im the first to admit here, that investment banks with al there research is pretty much junk. Infact theres a great artile or book about a guy who worked for the big banks on wall street for like 30 years, and he said its all just bollocks, its only really good to use to collate information. I mean we have had so much on buys that has just gone to crap and theyve moed back down to hold. Eg, sundance was a buy at 35 cents, and it kept getting pummeled all the way down to like 15 and was changed to hold.

Ive come to the definate conclusion the best way to make decent short term gains, is with small caps that do not have much coverage in the media etc, that way value can be found, before the market realises. Infact Im looking at getting out of working where I do, and get more involved in the actual business stategy side, actually being a part of these companies and creating value, rather then just analysing them from a far. But hey, the money is good!

Anyway great analysis there YT, nice reading.

YOUNG_TRADER · 3 May 2008

Goldman what did you think of the stuff I put together on Copper Hill? (see below)

The low waste to ore ratio certainly improves the economics, obviously its still not gonna be the most profitable mine in the wrold, the low grades will no doubt place it in the higher cost curves globally making it more suceptible to base metal price weakness etc etc

Also can you check your grape vines to see if you've heard anything about this supposed offtake discussions?

YOUNG_TRADER said:
Projects
Copper Hill Copper + Gold, 100%, NSW

JORC 133Mt's@0.31%Cu + 0.28g/t Au = 1g/t + Au Equiv

Now although the deposit is low grade its gold equiv grade is not too bad ie 1g/t Au, but the main Pros and Cons are as follows

http://www.goldencross.com.au/properties/copper-hill/default.html

Pros
- Exisiting infrastructure, rail, town, workforce, equipment etc etc
- Very low waste to ore ratio 0.6:1 this reduces the cost of hauling dirt, for example an operation grading say double Copper Hill but had a waste to Ore ratio of say 2:1 would be less economical as alot more dirt is required to be moved etc etc SO THIS IS A MAJOR FACTOR
- Copper Hill copper concentrates contain no deleterious elements and may attract a price premium. (further metallurgical test work is required)
- Current NPV indicates a very very large return
- Located in Australia = very safe and mining friendly nation to operate it albeit with Environmental green tape

Cons
- Huge Cap Ex = requires the backing of a major partner via either direct farm out or perhaps even offtake with commodity groups etc
- Low grade ore = high cost production (partially offset by low waster ratio) but = requires premium base metals prices to be profitable

NPV
Also here you will find the companies NPV calcs http://www.goldencross.com.au/properties/copper-hill/default.html

It is clearly shown that even using a $600 AUD Gold price vs Current $950+ and a $2.65 AUD Copper price vs current $4.20+ an 8Mt p.a. operation will generate an NPV of $270m ($600m - $330m)

Now even if GCR farmed out 80% of this project to be free carried, that would still = a Net Attributable NPV of $54m = 8.5c

IGV for interests sake
Copper Hill contains 1.2Moz's Gold 420kt's Copper
using current spot prices ($1000 AUD gold and $4.40 Copper)

I.G.V. Copper Hill = $5Billion

I'm not saying hey Copper Hill is worth Millions I'm just saying given the balance of the pros and cons I think you can just cross of Copper Hill as adding value to GCR, but do agree to really take the project seriously the funding via a JV or Offtake needs to be established.

p.s. There is also the EXPLORATION POTENTIAL at Copper Hill, I'd say they are looking to find higher grade satelite ore bodies etc

goldmandane · 3 May 2008

Sorry YT, no grape vine to speak of when it comes to small frys like this. I can check when Im next at work on our trading software which has all news articles and asx information regarding the company released on it, and see if there's anyhing there, but last time i checked i dont remember seeing anything.

And I really do like your analysis, because its really hard to value these start up explorers, and I like the way you are douing it.

Infact im going to be starting my own research website in the very very near future, focusing on very small caps (all totally independent of goldmans, just a bit of fun on the side, will be free, just really posting my own research I will be doing, but will present it in well put together reports), and Im thinking of initiating coverage of GCR and certainly will be using some of these ideas.

Can I ask how old are you and what's your background (work wise)?

Whiskers · 3 May 2008

YOUNG_TRADER said:
Refined Silver and others thanks for the kind words, I enjoy doing it so its a pleasure really,

I'm still waiting to hear back from my friend re GCR in Offtake discussions for Copper Hill, has anyone else out there heard anything? As I said if this can be confirmed it would be a serious turning point for the company and the project as securing "Offtakes" can sort out the project funding issue

As soon as I hear anything I'll let you guys

There is no doubt they are seriously looking at some sort of JV partner YT. This first came to my attention in August last year (post #73).

I had a number of phone and email contacts with Kim, who confirmed that, as you say the CAPEX was beyound their means at the moment and they were showing some parties over the project. I haven't had contact for a few months, but I have no reason to believe they are not still open to or in discussions.

Whiskers said:
Well, finally some good news about Copper Hill.

GCR’s Managing Director, Kim Stanton-Cook, said today (ASX ann. inter-alia)

"The project has the capacity to deliver a steady stream of copper-in-concentrate for at least ten years at reasonable cost, so the big hurdle for GCR is the estimated capital cost. GCR will consider potential joint venturers requiring a steady supply of clean copper concentrate with gold credits and the financial capacity to fund the project through to start-up.”

Miner · 4 May 2008

goldmandane said:
Infact im going to be starting my own research website in the very very near future, focusing on very small caps (all totally independent of goldmans, just a bit of fun on the side, will be free, just really posting my own research I will be doing, but will present it in well put together reports), and Im thinking of initiating coverage of GCR and certainly will be using some of these ideas.
?

Goldmandane - i accidentally got into this thread and astonished the amazing value you, YT, Refined Silver and others have put here.
Your candid note on Goldman sachs and its crappy business is startling too.

How do we know about your website and appreciate if you please advise in this forum when you open it.

Regards

Gekko · 4 May 2008

Thats some of the best research ive seen on any forum YT. Thanks for making me regret not buying more

You show the potential clealy. good work

YOUNG_TRADER · 4 May 2008

Hey guys little bit hung over today but I have some very good news

On Friday GCR's big brother Legend has continued its very strong rally and on Friday closed at an all time high of $3.90

Valuing Mt Isa
EV

Legend current shareprice = $3.90 with 200m shares fully dilluted its MKT CAP is now $780m US = $860m AUD

Legend has a NET 1.3Bt's@15% Phosphate (1.4Bt's but 100mt's is GCR's)

$860m With 1.3Bt's@15%Phosphate = 66c per tonne ore @15% Phosphate

GCR has 20% of 500Mt's@15%Phosphate = Net 100Mt's

@ 66c/t = $66m 10.5c GCR

To keep an eye on Legends share price ann's and mkt cap see http://www.lgdi.net/inc/redirect_share_price.php but remember the Mkt Cap given doesn't take into account the 20m or so options and thus is 10% under what it should be

So GCR's Current Implied EV on Mt Isa alone is 10.5c how long can it stay at 4c?

later on I'm going to try and put everything together and come up with a reasonable price target based on everything

YOUNG_TRADER said:
Ok before I go any further I think its very important that anyone hoping to understand exactly what GCR's Phosphate potential is read this report

http://www.goldencross.com.au/properties/mount-isa/PDF/Phosphate-20071224.pdf

also more info can be found on the companies web page

Projects
Mt Isa Phosphate, 20% Free Carried by Legend Corp, Qld near Mt Isa and near to Incitecs exisitng Phosphate mine

Qld Govt Historic JORC 500Mt's@15%Phosphate

Now this is a historic resource and the only reason it deosn't meet the JORC standard is because it was defined prior to the existance of the JORC code, ie any deposits no matter how ell defined that were established prior to the JORC code don't meet it, but really its just a technicality

See for yoursefl on the Qld Govt Minerals Database
http://www.vizmap.com/NRM/Commodities/493685.htm
http://www.vizmap.com/NRM/Commodities/491206.htm
http://www.vizmap.com/NRM/Commodities/494076.htm
http://www.vizmap.com/NRM/Commodities/494100.htm

GCR's JV partner is Legend International a major Phosphate player in Aust, for more info on Legend see http://www.lgdi.net/

Now Legend are working towards getting the whole project area towards production, they recently completed a scoping study and have an updated presentation which shows cost etimates, margins, production scenarios and resulting profit scenarios as well as timelines etc well worth a look http://www.lgdi.net/pdf/Legend_Phosp...ril_2008v2.pdf

Valuing Mt Isa
EV
Now the task of putting a value on Mt Isa, my prefered method of valuation is to use an Enterprise Value or EV which simply gives a company a value per tonne of given resource

Now because the Poo sector is light on companies the easiest and most obvious way to extract an EV is to determine the EV being attibuted to GCR's big brother Legend

Legend current shareprice = $3.10 with 200m shares fully dilluted its MKT CAP is now $620m US = $680m AUD

Legend has a NET 1.3Bt's@15% Phosphate (1.4Bt's but 100mt's is GCR's)

$680m With 1.3Bt's@15%Phosphate = 52c per tonne ore @15% Phosphate or $3 per tonne Phosphate

GCR has 20% of 500Mt's@15%Phosphate = Net 100Mt's

@ 52c/t = $52m 8.2c GCR

To keep an eye on Legends share price ann's and mkt cap see http://www.lgdi.net/inc/redirect_share_price.php but remember the Mkt Cap given doesn't take into account the 20m or so options and thus is 10% under what it should be

A % OF IGV
Another methood used (though I'm not sure how credible) is to use 10% of a deposits IGV as the value attributable to a company. I AM NOT A FAN OF THIS METHOD

Mt Isa PHOSPHATE:
500Mt's@0.15%P = 75Mt's of Phosphate

The current spot price for Phosphate is $350-$400 US/t = say $400 AUD roughly

So I.G.V. Mt Isa = 75Mt's x $400/t (current Phosphate Price) = $30BILLION now even though GCR 20% they have a net attributable amount of $6Billion

10% IGV = $600m = 95c

Conclusions Mt Isa
- Based on my prefered valuation the EV GCR is worth 8c+ on Mt Isa alone
-GCR is one of only 4 ASX listed companies with an actual Agricultural deposit
IPL's mkt cap is $8Billion
MAK's mkt cap is $275m
RWD's mkt cap is $130m
GCR's mkt cap is $25m

- GCR's deposits are between 60kms-150kms from IPL's operating Phosphate Mine
- GCR's project is part of a bigger project for big brother Legend kinda like the CUL/AQA relationship, the big brother has the deep funding pockes and expertise needed to advance these projects to production allowing GCR to advance its many other projects

goldmandane · 4 May 2008

Miner said:
Goldmandane - i accidentally got into this thread and astonished the amazing value you, YT, Refined Silver and others have put here.
Your candid note on Goldman sachs and its crappy business is startling too.

How do we know about your website and appreciate if you please advise in this forum when you open it.

Regards

Look, to say its junk is a bit harsh. Fundamentally and long term the research is generally pretty good. My main problem is that they dont take into account the mind of the market, you can have a damn strong company but if the market sentiment is bad and the cash isnt there, the share price wont reflect its value. Really Goldmans takes a long term view to investing, which is what everyone should do, so in actual fact the research is very good. Just go expecting to make 100% overnight, its a long term thing. And the good thing is they don't purport to be anything else, with claims of ridiculous claims you see made by companies like "chartwell", etc.

michael_selway · 4 May 2008

YOUNG_TRADER said:
Hey guys little bit hung over today but I have some very good news

On Friday GCR's big brother Legend has continued its very strong rally and on Friday closed at an all time high of $3.90

Valuing Mt Isa
EV

Legend current shareprice = $3.90 with 200m shares fully dilluted its MKT CAP is now $780m US = $860m AUD

Legend has a NET 1.3Bt's@15% Phosphate (1.4Bt's but 100mt's is GCR's)

$860m With 1.3Bt's@15%Phosphate = 66c per tonne ore @15% Phosphate

GCR has 20% of 500Mt's@15%Phosphate = Net 100Mt's

@ 66c/t = $66m 10.5c GCR

To keep an eye on Legends share price ann's and mkt cap see http://www.lgdi.net/inc/redirect_share_price.php but remember the Mkt Cap given doesn't take into account the 20m or so options and thus is 10% under what it should be

So GCR's Current Implied EV on Mt Isa alone is 10.5c how long can it stay at 4c?

later on I'm going to try and put everything together and come up with a reasonable price target based on everything

Hey great info thanks, it will be interesting your price target for GCR woudl be

thx

MS

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