ok guys here is my analysis, i like this one a lot.
GDM – Goldstream Mining
http://www.goldstreammining.com.au/
Summary
GDM’s business strategy is to create shareholder value through a diversified portfolio. The Company maintains maximum exposure for shareholders through their multi commodity portfolio approach, coupled with geographical diversity. In 2007, GDM shareholders will be exposed to AU$19 million in exploration through joint ventures and companies in which GDM is the major shareholder, with only AU$1.5 million of that expenditure being sourced from their own funds.
The GDM board is working seeking to maximize shareholder value through a mixture of core projects, where it may take the project through to development, and spin-offs & joint ventures, where the board feels it is important to bring in specialist expertise or extended funding or where keeping the assets in GDM would not maximize shareholder value.
The core focus is to broaden the Company’s core project portfolio primarily in copper, nickel, Platinum Group Elements (PGE) and iron ore with the objective of developing cashflow and company making assets.
GDM’s modus operandi is “Delivering value through diversity, discipline and development”.
Structure
160mill shares @ 50c = $80mill market cap.
@ 60c = $96mill
@ 65c = $104mill
$7.5mill cash at bank
Holds 39.5% of Uranex = 32mill UNX shares = $35.5 mill (@ $1.10)
Holds 51% of Continental Nickel (TSX : CNI) = 13.7mill shares =
$51mill (@ AU$3.70)
Therefore total of
$94mill in investments and cash
Projects
Cairn Hill
“The Company has identified magnetite - copper - gold mineralisation
which preliminary metallurgy indicates can produce a niche product that does not require pelletisation. Goldstream has done significant feasibility work is currently pursuing opportunities to commercialise the project.”
Supposed to be in the midst of a feasibility study which was due June, but I cant find an announcement about it.
In Situ (Undiluted)
Initial Pit
Indicated 10.0mt 51.9% magnetite 0.40%Cu 0.12g/tAu
40000tonnes copper = $360mill
12000 grams gold = $8.4mill
5Mt Iron ore = (not sure how to value this) conservatively $300mill???
Total Insitu = $670mill
They are planning to have first shipment before mid year 08, so will be up and running relatively quickly.
They say the high quality is good as it doent need to be pelletised (??), but I don’t know much about iron.
They are planning a 10yr mine life at 1.4Mtpa.
Currently trying to find a cornerstone/off take in order to fund the mine
Mt. Woods
Near prominent hill. Doesn’t seem to be too advanced but one project is going for Palladium, platinum and gold, with results so far of:
22m @ 0.95g/t Pt+Pd+Au
Other Mt. Wood project is looking for IOCG copper/gpld, similar to what Oxiana has hit and is developing in that area. Not very good results so far with average grades of only about .4% cu.
Lets say very conservatively that the Mt. Wood project should add another $10mill onto the market cap even if just for potential or sale.
Management
Two of the directors have AZC connections. One has been on the board previously the other is still a non-exec director. I know of them and that they seem to be true to their word and don’t overstate things unlike some other mining co’s.
Cons
Seem to have found support at 50c, and there is a big stack at 53 and 54c, not sure if they are real or not, but if it can clear these it looks set for a good run.
I think it will need a good announcement to get it back on the radar, but hopefully they will be forthcoming.
Conclusion
So heres the totals:
$94mill cash and shares
$70mill (10% of in situ) for Cairn Hill
$10mill for Mt wood
Total =
$174mill
=
$1.08 cents per share is what I would say its worth fundamentally.
I think that figure is relatively conservative especially as they are planning to be shipping iron within a year. It also doesnt take into account further exploration upgrades, which seem quite likely ezpecially at Cairn Hill.
They don’t seem to have recovered from the correction and I think 50c presents a great buying opportunity for a mid – long term hold. A few announcements should be coming up with the extended cairn hill drilling plus CNI’s drilling could hit something. Also could expect a corporate announcement with regards to funding, or the feasibility study before dec I would think.
Enjoy!