IMA - Image Resources

[Tukker]

Thanks for the input prawn, Ill have a look later, any idea of similar MS companies out there? I've heard people comparing Image to Iluka back when it was starting up, would that really be fair?

Tukker

 

[grace]

Thanks for the input prawn, Ill have a look later, any idea of similar MS companies out there? I've heard people comparing Image to Iluka back when it was starting up, would that really be fair?

Tukker

Market valuation aside, it was always my thought that George would never let this go for a song due to his substancial holding....mmm....what does that mean now after the Opes episode?

I think Image now is very open for the crows.....I just hope all holders realise the great value will come in those large deposits we haven't even started drilling!

 

[Tukker]

Too right Grace, I still think Image has a lot more work to be done. Hope George will be the one to complete it. I did some more math.

First resource estimate (Target 1, aka Hyperon) of a total of 7 targets in Cooljarloo, should be coming out soon. This will be based on a 4.5km channel of their total 120km target?? I think this 4.5km channel could have around 250,000tones of HM, roughly $14mil - $20mil worth (given a 70% cost for extraction). ~this is my punt in the dark.

On another topic:
Got this off the news store website

THE struggling mineral sands miner Iluka Resources revealed it is dependent on an iron ore mine royalty, land sales and the sale of its interest in a coal mine to keep it profitable while its core operations are in a transitional phase.

Besides Iluka what other companies would be interested in Image?


My Disclosure:
This is my first speculative share, it was recommended to me by a family member when it was around 50cents. I have since then been trying to learn more about the mining industry to become more proficient with fundamental analysis.

This forum has been a wealth of knowledge to me, and props should be given to the administrators, moderators, and everyone who contributes.

I look forward to future good news.

Tukker

 

[grace]

A broker a LONG time ago gave Cooljarloo an estimated resource of 100 -200 million tonne of ore grading at about 5%HM. It is possibly on the website a long time ago.

Given that this was perhaps up to one year ago, I would say we should be at the 200 million tonne at 5%, which gives HM of 10 million tonne. I wouldn't be surprised if the grade is higher than this (they said they had a large core grading at least 10%).

Rework the figures on 10 million tonne thanks.

 

[treefrog]

c.f. bemax (new producer really struggling against strong $A) has Reserves and resources of 12.6Mt and 98.8Mt of contained HM

 

[Tukker]

A broker a LONG time ago gave Cooljarloo an estimated resource of 100 -200 million tonne of ore grading at about 5%HM. It is possibly on the website a long time ago.

Given that this was perhaps up to one year ago, I would say we should be at the 200 million tonne at 5%, which gives HM of 10 million tonne. I wouldn't be surprised if the grade is higher than this (they said they had a large core grading at least 10%).

I guess i've gone and made things more complicated than i need to. Thats something i was always prone to in school as well.
Let me work this out more simply.

Volume = Length x Width x Depth
V = 120,000 x 30 x 10
= 36milion m ³ of HM sand

Now 1m ³ of this sand is roughly = 4 times the weight of an equal amount of water, and 1 m ³ of water = 1 ton
So.....

36mil x 4 = 144mil tons of sand

At 5% grade thats 7.2mil
At 6% thats 8.64mil
At 10% thats 14.4mil

Cute side point, that values image $3/share
Ok so does that puts us somewhere near the scale of the discovery of the Coburn deposit by Gunson Resources? Which evidently boosted its sp 300% that year.

c.f. bemax (new producer really struggling against strong $A) has Reserves and resources of 12.6Mt and 98.8Mt of contained HM

Yes i saw them somewhere, they look pretty good also. That currency challenge was with the price hedged, yet they also enjoyed increases in profit through sales and production.

If we theorize that the $AU has peaked, then can we not assume there is more upside to mineral sand deposits in Oz in the years to come?

 

[WRONG'UN]

Hi Tukker
Check your sand density (SG) - sands are normally in the range 1.5 - 2.0, depending on whether they are loose or dense. For what it's worth, concrete is 2.4, aluminium is 2.7, steel is 7.85, and gold is 19.3

 

[Tukker]

Hi Tukker
Check your sand density (SG) - sands are normally in the range 1.5 - 2.0, depending on whether they are loose or dense. For what it's worth, concrete is 2.4, aluminium is 2.7, steel is 7.85, and gold is 19.3

I had a look at that, I decided that relative density was more easy to work with. Less calculations. I have no idea whether the sand is loose or dense so I can't make assessments using that. Your usual run of the day sands made up from Quarts have a specific gravity of around 2-2.5, heavy minerals 4.5+ depending on the grade. Owing to how complicated i could really take that, and how that has run me into very complicated and strange equations i decided to simplify it and sacrifice completely accuracy. Using 4 to get the average eased the estimate greatly albeit potentially erroneously.

I still think I've overestimated, but I only did it to learn more about the process, the scientist will bring out the results soon enough.

thanks for the input

Tukker

 

[Tukker]

Some Steady volumes the past couple of days, around $100K crossing the board on average during the last 10 days, up around $70K more prior to the opes sale, with less downward movement. I have a feeling some people gearing up to make a quick buck.... Support found at $1.30

 

[Tukker]

Up 6.15% today on no news. Getting close to the end of the month now, JORC estimates should be coming out any day. Can't email them now to see if its expected on time, will do later.

 

[grace]

Target drill kms increased to 247km (from 120km).

To my knowledge, this looks to exclude the deposit next to Diatreme, which is the biggest by far.

Importantly, is Image's ability to convert ground mags to resources!

A comprehensive reinterpretation of Image’s existing ground magnetic data and of recently completed ground magnetic surveys in the North Perth Basin has highlighted a major increase in cumulative target length from 120km to 247km.

It is relevant to point out that to date Image has delineated an aggregate strike length of some 38km of mineralised strands, largely based on drilling of ground magnetic targets. Based on these results it is anticipated that a significant proportion of the 247km of targets identified in the review are likely to convert to resources when they are drilled.

Looks like the market doesn't care too much. Perhaps they have to find some more phoshate, or potash to attract some buying. Remember, the Chinese fit their houses out with white tiles. They don't like carpet. What is needed to make white tiles?

 

[Tukker]

thats a big change. With 2 producing mines in the area, the unusually high grades Image seems to find, and the very fast nature in which these resources can be mined, I see some pretty numbers forming.

 

[grace]

The Daily Reckoning makes mention of a small australian company holder of fossil beaches in the North Perth Basin in their recommendations for tonights report. I think it is Image after today's announcement. What do you think?

 

[Tukker]

The Daily Reckoning makes mention of a small australian company holder of fossil beaches in the North Perth Basin in their recommendations for tonights report. I think it is Image after today's announcement. What do you think?

Maybe

A comprehensive reinterpretation of Image’s existing ground magnetic data and of recently completed ground magnetic surveys in the North Perth Basin has highlighted a major increase in cumulative target length from 120km to 247km.

I saw this announcement in the finance news section of Yahoo.com.au today. First time I have ever seen anything from Image there.

I have a question for ya grace. The channels identified (excluding Diatreme) do not constitute large areas individually, they seem like high quality patches. Will that be problematic when mining?

I'll go out on a limb here and say they should have 200-250mil tones HMS now without considering the whopper that is Diatreme.

Considering image shares value the company at $106mil ($1.30/share), I would say its quite cheap.

Gotta mention here that the JORC coming out soon is only a small portion of this 247km find. Only 49km, 20%. Although i believe you can use it to estimate the rest of the resource given the magnetic techniques used by Image.

I attached an exel file with how I have been estimating. Take a look and tell me if you think its complete crap.View attachment 20437

P.S. Nice new look for the forum!

 

[grace]

Tukker, I don't think their deposits would be hard to mine. They are close to surface so far. The fact that they have quite a few really does not matter too much. They just put in those big dredge machines and away they go. I think individually, you will find that they are still quite substancial in any case!

I am pretty sure that The Daily Reckoning is pushing Image and here is another extract I just received....

--Is bauxite the next iron ore? Or is zircon the next bauxite? We just wrapped up our investigation into Australia's mineral sands industry. A long-line of prospective new producers are lining up. But most of them have yet to really define their resource base, much less put out a realistic valuation to shareholders based on the market price for zircon, ilmenite, and rutile (the two main feedstocks of titanium dioxide pigment).

--But even Rio Tinto has noticed zircon prices are rising. Zircon is what we'd call an "element of urbanisation." It's used to glaze ceramics and glass. Demand is driven by the big demographic trends in China and India, where people are moving off the farm and into the city.

--Assuming the world doesn't starve itself by overproducing people and underproducing food, demand for zircon, ilmenite, and rutile is going to grow. That means more producers will be needed in Australia, which already has the world's largest economically defined resource of mineral sands and is the world's leading producer.

--The hot regions for new production and exploration are the Murray Basin and the Eucla Basin. After careful investigation, though, we reckon the North Perth Basin is where the real action will be. After all, that's where all the action has been in the last 40 years. There are some familiar patterns emerging where new companies are accumulating tenements and drilling on properties right next door to known mineral sands mines. It's a pretty clever strategy. Will it work? We'll keep you posted.

There was also comment in last nights report too that appeared to match up. I emailed George and he said it could be Image as there are not many companies in the North Perth Basin.

And as I have stated before, the Chinese put in white tiles NOT CARPET!

 

[Tukker]

Nice deduction. Sure looks like they are pointing to image. My uncle has a significant holding in image and he has regular chats with the board, he says he is cautiously optimistic about the next couple of months. Being a stern conservative I'd say he is pretty upbeat on it.

Interesting to see Image hold a share price higher than some producers'. Do you think thats the takeover value factored in Grace?

 

[grace]

Nice deduction. Sure looks like they are pointing to image. My uncle has a significant holding in image and he has regular chats with the board, he says he is cautiously optimistic about the next couple of months. Being a stern conservative I'd say he is pretty upbeat on it.

Interesting to see Image hold a share price higher than some producers'. Do you think thats the takeover value factored in Grace?

Their MC is less than half of what it used to be, and they have found so much since it was double! The very high grades will make for very profitable mining. Perhaps they have the best in Australia....only time will tell.

Here is the BRR from Thursday.

http://ss01.boardroomradio.com/files/IMA/IMA20080424.mp3

Interesting that
- 247 km EXCLUDES drilling to date!- only 32% of ground mags done to find this 247km
- amptitiude of magnetics should lead to better grades than Cooljarloo per George....very interesting!
- Qtrly about to come out with $7mill in bank.
- Bidaminna looking much bigger than all at Cooljarloo per George...

How long has your Uncle held shares....if it is not too nosy?

 

[Tukker]

Well, last time i spoke with him he was still holding. He has been in it since 2002 or 3 i think.


Hmm something interesting George mentioned there towards the end. $7 million cash on hand. Considering they just doubled the amount of targets to be assessed and have only completed 32% of the initial targets, I wouldn't think this is only enough to get half of it done. Could that mean JV/Farmout, rights issue?

Cooljarloo North (way north), Bootine and Cape West the next drilling. Did i hear him correctly that some of the targets in Bidamina are 200meters wide? Thats insane.

^^ wish i had more capital.

 

[Tukker]

Got an email from Image's secretary linking a nice little write up on the future potential for the mineral sands, and Image Resources by Port Phillip Publishing. Its basically confirming what grace has been preaching for a long time now: the Chinese lay tiles not carpet

http://www.imageres.com.au/broker%20research/200804ASI_1.pdf

 

[grace]

Initial jorc out and it looks good. Will do an In Ground Value calc now. Note this is just a tiny portion the overall deposits.

Indicated and Inferred Resources in an initial 7 deposits total 260Mt @2.4%HM (heavy minerals), containing 6.4Mt of HM.

• The resources defined so far contain a total of:
- 340,000 tonnes of leucoxene and rutile
- 4,500,000 tonnes of ilmenite
- 545,000 tonnes of zircon
- 390,000 tonnes of garnet
• A high valuable heavy mineral content of 87%.

• The resources outlined to date are contained within 60km of ground
magnetic targets, comprising only 20% of the 300km of magnetic targets
defined so far. The remaining 247 km of targets have yet to be drilled and
some 68% of the project area remains to be surveyed, indicating a high
probability of further significant discoveries increasing the resource base.

IN US Dollars
Zircon 750 000 tonnes @ $750 = $562.5 million US
Rutile & Leucoxene 340 000 tonnes @ $450 = $153 million US
Garnet 390 000 tonnes @ $70 = $27.3 million US
Illeminate 4 500 000 tonnes @ $100 = $450 million

Total IGV $US = $1.193 billion
$AUS = $1.269 billion (@0.94)

Not bad for the initial jorc and only 20% drilled of amount surveyed. 68% not yet surveyed.