IMA - Image Resources

[grace]

Unfortunately the trading halt is to do with the mess at Opes Prime. I am guessing ANZ wish to sell the shares held as collateral to Opes' debt. Massive selling at very discount prices will take place in the coming days/weeks, many probably off market (i.e. out of the average investor's grasp). Image has requested the halt to negotiate with the bank the manner/timing (my guess) in which ANZ liquidate the shares. An announcement about the result of this will come out before the halt is lifted.

This timing has me a bit perplexed.

If ANZ decide to sell off their image shares when the halt is lifted, then this little gem can be grabbed up for a sweet discount before the Jorc comes out.

However, if they wait for the report to come out to begin selling, then their sales would add more liquidity at current prices thus limiting share growth potential.

If the banks are smart they would wait a couple of days to sell. I don't think they will.

They do not need the price to go up, they would sell and know they have recovered their debt. I've read about them selling other shares at 50% discounts off market already. This is a shame. If they were to sell at fair price they may have some cash left over for the mums and dad's who have fallen victim to Opes Prime's receivership.

With regards to Image's price rise, I'm pleased. I wish there was more depth in the market to offer more of a sustainable growth scenario for the Jorc, but i must again remember image is classed as a high risk investment, even though at this point i do not believe so.

With the sub prime uncertainty going on i can see a few large finance companies gearing up to pump and dump image to make some quick cash to cover margin losses elsewhere. Another unfortunate event potentially hindering share price growth.

Image has been on the ASX for 6 years now, they have done so much. Let me propose a question to the forum.

Do you think George and his team actually intend to set up mining operations of their own, or do you you think they intend to sell the company before?



By the way, these are my humble thoughts, i am no pro.

Tukker

Hi Tukker. Notice the loan is with ANZ (which is better news than Merryl because ANZ said at least they are in no hurry to sell generally.....Merryl have done the big discounting to my knowledge and have already sold off the majority of their holdings).

I think George will spin off Cooljarloo and C/North as a separate company and work on the balance with Image as a s/holder in the new formed one. Then Cooljarloo/North will be available for all sorts of things.

Would also love to hear others' thoughts though.

I'm a little anxious about Wednesday, but at least it seems it is not the Directors where other company's have their Directors with the big margin loans etc

 

[Tukker]

Hi Tukker. Notice the loan is with ANZ (which is better news than Merryl because ANZ said at least they are in no hurry to sell generally.....Merryl have done the big discounting to my knowledge and have already sold off the majority of their holdings).

I think George will spin off Cooljarloo and C/North as a separate company and work on the balance with Image as a s/holder in the new formed one. Then Cooljarloo/North will be available for all sorts of things.

Would also love to hear others' thoughts though.

I'm a little anxious about Wednesday, but at least it seems it is not the Directors where other company's have their Directors with the big margin loans etc

Well the announcement appears to be stating the facts. From what I understand from the legal jargon it would appear George has bought 5.5mil shares through Opes' now infamous margin lending practice.

Owing to the margin George used to buy these shares, and ultimately with the collapse of Opes Prime, ANZ appointed receivers have maintained the shares aren't George's and will be sold as payment for Opes' outstanding debt.
George is fighting this (assumption) on the grounds that he had no outstanding margin call and (my assumptions here) there were irregularities between the contract and the FSG when he signed up (I've read one says they own the shares, the other says they don't).

If this does not work he has told them he can repay the loan to retain his shares. ANZ don't want this of course because the money they can make selling the shares is way larger than what his repayment would be.

In either case ANZ will not be taking any prisoners right now. They will sell all the Image shares it has control over now, which evidently is more than just George's share; roughly 300,000 more.

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00828447

This means 5.9 million shares are to be sold. Given that Image has an average trading volume of about 50,000 over the last year. This would take more than 115 days to complete. Hate to sound off the bad news but this will decimate share price growth potential for 2008.

Savior will be an off market transaction but to be realistic, in the current state of credit markets, do you think George can find someone with AUD$8million+ who wants to buy Image shares in 3 days ????

Bah Humbug.

Your thoughts?

 

[grace]

Hi Tukker, well if that initial jorc were out by now, George would have had more bargaining power. If I was a Director I would have got that out to market! pronto...

Let's hope those Singapore businessmen want a further chunck!

 

[Tukker]

Hi Tukker, well if that initial jorc were out by now, George would have had more bargaining power. If I was a Director I would have got that out to market! pronto...

Let's hope those Singapore businessmen want a further chunck!

I have a sneaky suspicion the Jorc Report has helped him get the suspension till the 4th. Just a feeling.

 

[Tukker]

Well they have done it . The outstanding shares have all been sold off market. I'm pleased George and his team were able to resolve the opes issue out. Did anyone catch whether all the 5 mil shares were sold to one entity or whether there were more than one buyer? Would be interested what price they payed as well. I will check the course of sales tomorrow in any case.

Seems the Jorc report is delayed, good news for the share price, might gain some momentum now.

Fingers crossed

Tukker

 

[grace]

Tukker, it is all in the course of sales this am at $1.10 and it says to international and domestic buyers. I rang and got George this morning at the office but he was very busy. Wasn't allowed to tell me about the transactions.

A change in Director's holdings will come through, but does he have 48 hrs for disclosure of that? Hope he still holds some, although, I thought perhaps he might not have been allowed to buy because of arguments over non-arms length transactions in relation to realisation of value. Whoever bought at $1.10, that is dirt cheap. I wouldn't sell mine for that.......George must be dissapointed!

 

[Tukker]

Share price held up pretty good today, balancing off at 1.39. All things considered i think i will make some cash ready to buy more if it gets to 1.30 or 1.20. Of course i would have loved to buy at 1.10 Hope these guys who did aren't selling them straight away at that beautiful 20odd% profit. That would sure look good on a broker's report card right about now. see what happens.

Jorc delayed, i like that. Maybe there is a lot to talk about Fingers crossed for this month.

 

[Tukker]

Called Image's office today, they say they suffered a delay in posting the JORC due to the Opes stuff. They now say it should be out before the end of this month. Bah Patience is not my best attribute.

 

[grace]

Called Image's office today, they say they suffered a delay in posting the JORC due to the Opes stuff. They now say it should be out before the end of this month. Bah Patience is not my best attribute.

Thanks Tukker. I see after ANZ sold all of those shares (opes), the next day 1 000 000 shares went through at $1.10. Just my thoughts, but my guess that was George buying some back. We should have director holdings notices out any tick of the clock I would have thought!

Also, last nights fat phophets, I think one of the five mentioned could have been Image. The fit sounded right.

 

[Tukker]

Thanks Tukker. I see after ANZ sold all of those shares (opes), the next day 1 000 000 shares went through at $1.10. Just my thoughts, but my guess that was George buying some back. We should have director holdings notices out any tick of the clock I would have thought!

Also, last nights fat phophets, I think one of the five mentioned could have been Image. The fit sounded right.

Yes I think your right on both accounts. Poor George trying to get back a little piece of his work before the potentially good news comes out, and those fat prophets have preached this little gem again. Volume has still been low, lol as i say that a 22K order goes through and share price hops up 2%.

If the JORC looks anything like the consistently high quality reports we have grown accustomed to getting from Image, i would venture the reason its late is because they are putting alot of attractive presentations within it. Image has always marketed itself well and I expect this Jorc should be one hell of a term paper.

Too excited to sleep

 

[grace]

George's "ceasing to be a substancial holder" notice is out. Still hold some shares and plenty of options which is good. News of the 1 000 000 transaction may come in tomorrow my guess.

 

[Tukker]

George's "ceasing to be a substancial holder" notice is out. Still hold some shares and plenty of options which is good. News of the 1 000 000 transaction may come in tomorrow my guess.

Wish I could say that 1mil was me . I'm glad George is still in there. Wonder if he is delaying the JORC so he can find some cash to buy back in?

Speaking of this JORC. If it is as good as we all think its gonna be, then it should be good news for the other projects as well

If the Jorc reveals strong similarities between the aeromagnetic/ground magnetic surveys (strongly believed in by Image) to the drilling estimates, and hence the Resource Statement, then what does that say for their Bidaminna targets and the Cooljarloo extensions?

Massive 18km long channel/strand target at Bidaminna.... Geopiko classified Bidaminna as an "Indicated Resource" totaling 44Mt @ 3% Heavy Minerals.

I think Bidaminna hasn't been calculated fairly into Image's value.

To top it off this report is only a small portion of what Image "thinks" it has found to date. Institutional and sophisticated investors have shown significant interest I don't see much downside at the moment. I'm buying more next week if its still around $1.25-1.30.

Very exciting times to come I think.

 

[grace]

Note that Bidaminna jorc resource is what they bought next door from the neighbours. They are to start drilling their deposit April/May 18km long and 500 metres wide.

What about Diatreme - 28km long x 9km wide! Cooljarloo is a baby compared to this! Can't wait until they get stuck into that!

It is amazing, we did a sattelite search and found the Cooljarloo Mine (owned by Iluka) from the air. It is of course mostly drilled out and that is why you can see it!

 

[Tukker]

Note that Bidaminna jorc resource is what they bought next door from the neighbours. They are to start drilling their deposit April/May 18km long and 500 metres wide.

What about Diatreme - 28km long x 9km wide! Cooljarloo is a baby compared to this! Can't wait until they get stuck into that!

It is amazing, we did a sattelite search and found the Cooljarloo Mine (owned by Iluka) from the air. It is of course mostly drilled out and that is why you can see it!

Ye 28km is pretty amazing, if the Cooljarloo North Jorc comes out a beauty i will probably drop dead from how beautiful Diatreme will look

Nice job finding the satellite image of the mine, I wouldn't have the slightest idea where to start looking for it, can you attach it to a post maybe?

Without researching too far into it I'd say Iluka will have enough resources on its plate fairly soon. I don't think they will be taking up Image's finds anytime this year, that Jacinth-Ambrosia project is gonna keep them very busy.

I really have to comment on the team at Image. Its top notch. Every time i call them, the phone is answered on the first or second ring, the reports are always very thorough and 'mostly' on time. George has a really good handle on this project.


I look forward to the future.

 

[Tukker]

Up 7% today with only about $170,000 injected. Shares seem to be more tightly held now. Should be a good week.

 

[Tukker]

10 days left till the first Jorc is due to come out. Been quiet on the forum recently, SP showing support at 1.30, depth has been thin, in a good way. A friend of mine is talking with his broker about buying US$50K of Image. Interesting to hear what he does.

Rum and coca cola sales are up 19% today partially thanks to the 2 trolly loads i took from the super market this afternoon. Gonna be a good weekend.

 

[Tukker]

I was doing some tinkering the other day while home from work with a bum knee and came up with an "uneducated" calculation of what Cooljarloo means to Image.

I used the drilling results of target 2 posted in the quarterly report which was a part of the claimed 100% image owned 120km of HM targets in Cooljarloo.

Now don't quote me on this as i have no idea of all the factors involved in the estimate process, i only used my humble logic.

Variables:

L= Length; 120km announced

W= Width; Median width from a couple of news reports ~ 30m (news reports claimed 20-70meters, can't find the link where is saw that now )

D= Depth; Using an average depth of HM drilling by the 192 drilling results. Average from report = 6.182291667

Simple volume calculation to start with, all units converted to meters (m):

V= L x W x D
V= 120,000 x 30 x 6.18
= 22,248,000m ³

Average % Heavy Minerals of the samples retrieved from the 192 holes was 5.957291667, so:

Volume of HM = 0.0596 x 22,248,000
=1,325,980.8cm ³

A little research and i learn mineral sands have on average 4.5 times the specific gravity of water. Which entails that if 1m ³ of water weighs 1 ton then 70,852m ³ of HM equals:

70,852 x 4.5 = 5,966,913 tonnes

O.K. so this would be the perfect result, i know thats not likely so I'll take half of that. 2,983,456 tonnes. Thats still ridiculous!

If you change the HM% grade to a low grade 1.1%, you get 244,728m ³ ~1,101,276tonnes.

Using this low grade guesstimate and using average distribution shown on Wiki http://en.wikipedia.org/wiki/Mineral_sands

Zircon 10% = 110,127 @ $400/ton ($800 spot price)= 44,050,800
Rutile 10% = 110,127 @ $250/ton ($500spot) = 27,531,750
Ilmenite 20% = 220,255 @ $44/ton ($88spot) = 9,691,220
Luexcoxene 5% = 55,063 @ $211/ton ($422spot) = 11,618,293
Junk 55% = 605,701
Total = $92,892,063

I have no idea how much it costs to mine the stuff nor do i have any idea how mining companies value the estimates, nor do i know how the distribution of the mineral content should be, but considering this is only the first discovery and the others are supposed to be even bigger i think its a pretty good sign.

Undiluted shares are knocking around 82,214,642 as at Dec 2007. Market value for the company at this time is around $106mil ($1.30).

This is my first attempt at this, I would be interested to hear what you think .
I welcome the criticism.
Tukker

 

[treefrog]

70,852 x 4.5 = 5,966,913 tonnes

might be a slight slip in calcs about here?? - not sure about the remainder as didn't look too hard but this one was apparent

 

[Tukker]

might be a slight slip in calcs about here?? - not sure about the remainder as didn't look too hard but this one was apparent

Indeed you are correct, seems i forgot to change the #'s around when i adjusted the channel length.

Simple volume calculation to start with, all units converted to meters (m):

V= L x W x D
V= 120,000 x 30 x 6.18
= 22,248,000m ³

Average % Heavy Minerals of the samples retrieved from the 192 holes was 5.957291667, so:

Volume of HM = 0.0596 x 22,248,000
=1,325,980.8m ³

A little research and i learn mineral sands have on average 4.5 times the specific gravity of water. Which entails that if 1m ³ of water weighs 1 ton then 1,325,980.8m ³ of HM equals:

replaced the 70,852m ³ with the correct value 1,325,980.8m ³, so..
1,325,980.8 x 4.5 = 5,966,913 tonnes

I had originally done the calculations using a channel length of only 60km instead of 120km, thats why i had that 70,852m ³. The remainder of the calculations remain correct to my understanding, which doesn't really account for a whole lot ::.

 

[prawn_86]

Hey Tukker,

Nice to see another fundy contributing

One idea for costings might be to look at other MS producers and see what they had in the way of expenses.

You could also try to find another co with a similar ore body structue (from my understanding mineral sands are all fairly similar) and then see how their JORC worked out against their initial target etc

Prawn