IMA - Image Resources

[Tukker]

I like the coverage, too soon to tell if its a turnaround i think. Still i doubt there is any bad news to come out. Apart from the turmoil in the global economics there is nothing wrong with this sector in my opinion. Also with Image being so close to the massive manufacturing plants, well geez, what more do you want? To me its a wait and see. Markets all took a shock this week, which i think everyone expected, yet Image seemed to hold support.

 

[Tukker]

$50,000 worth traded yesterday raising the price a little during one crappy day. Someone accumulating? Hmmm George maybe?

 

[Tukker]

David Robb, Iluka's Managing Director stated: ".....I believe we are on the threshold of a new era for our industry, driven by the forces of growth and urbanisation in emerging economies - most particularly China. Demand for the products Iluka produces is strengthening at a time when we are preparing to bring on high quality, long life new zircon and rutile production sources. When added to our advantageous geographical position, a tremendous opportunity lies ahead."

Oh you don't say?! So basically Heavy Minerals are starting to pick up demand? Sounds good to me.

Question, can Image find the necessary funding in 2009 to continue its projects? In the past capital raising has been over subscribed, i wonder if that trend will help it, or maybe the 90% retreat of its share price might speak otherwise.

Although im no longer a holder, Image has always been a little darling to me, I keep watch as she grows inch by inch.

 

[Tukker]

POSITIVE SCOPING STUDY OUTCOME

Conclusions
The results of the various scenarios considered were:
• Stand alone 400tph dry mining NPV (10% discount, before tax) of $16M-
$39M (IRR 39%-67%) including capital of $37M.
• Stand alone 800tph dredge mining NPV of $47M-$87M (IRR 73%-105%)
including capital of $49M.
• The stand alone scenarios do not take into account that the balance of the
resources could be attractive to third parties with NPVs to them in the
range of $47M-$86M (disregarding any uplift for SR ilmenite).
• Incremental case 800tph dry mining NPV of $56M-$89M (IRR 446%-
543%) including capital of $23M.
• Incremental case 800tph dredge mining NPV of $63M-$102M (IRR 88%-
118%) including capital of $65M.
• Incremental case 2,000tph dredge, 800tph dry mining combination NPV of
$106M-$180M (IRR 241%-294%) including capital of $46M.
• Potential for very substantial increases in the NPV in all cases with SR
ilmenite premiums.

Share price jumps 28% on very low volume, about $50k. Good news, but better would be if it has secured further funding to advance its drilling schedule. Sadly, no one cares about explorers at the moment, even really good ones. Even grace seems absent from this thread. I'm not a holder, just really like what the company has done so far. My capital is locked away in trading systems atm but i will rejoin image when i feel the time is right. Good luck to the holders.

 

[grace]

POSITIVE SCOPING STUDY OUTCOME

Conclusions
The results of the various scenarios considered were:
• Stand alone 400tph dry mining NPV (10% discount, before tax) of $16M-
$39M (IRR 39%-67%) including capital of $37M.
• Stand alone 800tph dredge mining NPV of $47M-$87M (IRR 73%-105%)
including capital of $49M.
• The stand alone scenarios do not take into account that the balance of the
resources could be attractive to third parties with NPVs to them in the
range of $47M-$86M (disregarding any uplift for SR ilmenite).
• Incremental case 800tph dry mining NPV of $56M-$89M (IRR 446%-
543%) including capital of $23M.
• Incremental case 800tph dredge mining NPV of $63M-$102M (IRR 88%-
118%) including capital of $65M.
• Incremental case 2,000tph dredge, 800tph dry mining combination NPV of
$106M-$180M (IRR 241%-294%) including capital of $46M.
• Potential for very substantial increases in the NPV in all cases with SR
ilmenite premiums.

Share price jumps 28% on very low volume, about $50k. Good news, but better would be if it has secured further funding to advance its drilling schedule. Sadly, no one cares about explorers at the moment, even really good ones. Even grace seems absent from this thread. I'm not a holder, just really like what the company has done so far. My capital is locked away in trading systems atm but i will rejoin image when i feel the time is right. Good luck to the holders.

Hi Tukker, I guess I got sick of talking to myself.

Yes, good Scoping Study. Just need some capital to bring the project on-line.

I can only hope that both Iluka, Ti-West, and everyone else in the area are also interested in Images fantastic deposits to tip some capital Images direction.

George looks a long way from the Opes debacle finalisation unfortunately for him.

I am still holding although it has been painful.

 

[Tukker]

Nice to see you again grace, thought i would post Iluka's views on the prices and supply/demand for 2009. They are adamant about the supply being short for 2009 even with the global slowdown. Food for thought anyway.

MD David Robb
As most people in the industry are aware, Iluka’s view is that there are grounds for
zircon and high grade titanium dioxide prices to increase “appreciably” in 2009.
2
First, we have experienced continued strong demand for zircon, rutile and
synthetic rutile during the year, with our marketing efforts successfully capturing
new customers and, in China, increased zircon sales penetration. This was
facilitated by investment in building our capability to deliver product in ways other
than the traditional large lot basis, including containerisation, warehousing and
bagging product.
Second, a number of factors (including the typical production decline experienced
by mature producers; the Western Australian gas outage; and the decline of
Indonesian zircon concentrate supply) mean that, in our view, underlying zircon
market supply fell well short of demand in 2008. Strong demand was met, not by
new supply, but by Iluka drawing down the majority of its inventory.
Third, concerns about supply exist also in high grade TiO2 markets as mooted new
projects are delayed or fail to perform.

http://www.corporatefile.com.au/documents/OB/MD on Mineral Sands Market Conditions 25.11.08.pdf

 

[grace]

Gee, there was a pretty big transaction there in image today 933 000 shares.

Wonder what it could do to the share price if it was Iluka taking a holding?

Just pure speculation on my part, but let's see what the future brings.

 

[grace]

Well, it seems UBS was our big seller in Image....and now George is a buyer at long last!

Here is The Austalian today

AT one stage, Swiss bank UBS held about 4 million shares in mineral sands play Image Resources (IMA).

It started selling late last year at around the $2 mark, having accumulated some of that stock for as little as 25c a share.

It was a happy move for UBS in terms of turning a good profit but it was only a partial sell-down. The Swiss kept a presence on the Image register presumably waiting to see how the heavy minerals find worked out.

Since then, of course, things have turned a little sticky at the Zurich office. Not only has UBS pulled out of the commodities business but, thanks to the global financial collapse, there was a sudden and urgent need to lay hands on as many readies as possible.

Well, UBS has now sold the last of its shares in Image. As of Friday's close, there were only 35,000 IMA shares being offered for sale -- about $13,600 worth -- but a good queue of buyers. Most juniors would sell their mothers to get some buyers, so Image is now back in a happy position. The stock closed at 39c on Friday, moving upward from its 23c low last month.

This column has gone a bit quiet this year about Image after having talked up the Cooljarloo mineral sands project in Western Australia. The grinding slide of the share price generated a few doubts in our mind.

But there was reassurance during the week with the release of a scoping study for this North Perth Basin project. It shows that the project is a goer and the company has options -- stand-alone dry mining or dredging or bringing one of the heavy mineral majors already operating the neighbourhood. And this study covers only 20 per cent of Image's landholding in thearea.

It can be made more attractive if further exploration establishes there's enough high-quality ilmenite to sustain synthetic rutile production, but in the meantime there is plenty of zircon there. Zircon is almost alone among metals as having the potential to put on further price gains next year.

It is not so much that demand is soaring, but that supply can't keep up with orders. According to Perth-based titanium sector analyst TZ Minerals International, zircon is likely to average between $US760 a tonne and $US800/tonne in the second half of 2008, but is looking like being between $US900/t and $US940/t next year. Iluka Resources (ILU) produces 37 per cent of the world's zircon and its stockpiles are close to exhausted.

The global shortage has been exacerbated by the gas explosion in the west and a permanent decline in Indonesian production. At the other end of the supply chain, there is still robust buying by Asian ceramics and Chinese zirconia manufacturers.

Mind you, Image, which is still exploring, will need to get a wriggle on. TZ is predicting zircon will come into surplus by 2012. One big contributor to this will be Iluka bringing its big Eucla Basin discovery into operation.

 

[prawn_86]

While this deposit seems massive and has a lot of potential it is worth noting that mineral sands are notoriously difficult to get up and running and commissioned properly at full capacity.

Small/fine product makes it difficult to filter/seive etc. Obviously a lot depends on the previous experience that management have, but it can be a long process

 

[grace]

While this deposit seems massive and has a lot of potential it is worth noting that mineral sands are notoriously difficult to get up and running and commissioned properly at full capacity.

Small/fine product makes it difficult to filter/seive etc. Obviously a lot depends on the previous experience that management have, but it can be a long process

From what I have seen/read, the product is not what you would call fine. Iluka and Ti-west are also mining the same product next door.

The grades are very high on Image and at surface.

 

[Tukker]

....Mind you, Image, which is still exploring, will need to get a wriggle on. TZ is predicting zircon will come into surplus by 2012. One big contributor to this will be Iluka bringing its big Eucla Basin discovery into operation.

That was a big point of that story to me. Whatever happens to Image will be decided next year sometime. Their time-line has shrunk. They will have to get a lot done in 2009; hopefully lots of positive news. I only question if they have the funds to do it.

 

[Garpal Gumnut]

The chart looks inviting, but this pattern has been played out at higher prices and it has still declined.

A bit of volume today though on the upswing.

gg

 

[grace]

George has been a busy boy over Christmas. MOU's with local producers (which would be Iluka and Ti-west I would think).


By the way, Iluka was in the top 10 best performers on the ASX200 this year.

MOUs SIGNED WITH LOCAL PRODUCERS
______________________________________________________
Image Resources is pleased to report that following separate Memoranda of
Understanding (MOUs) being reached with two local mineral sands producers, Image has agreed to release composite samples from, and resource models of, its North Perth Basin project to enable the producers to further assess these resources.

Image considers that the MOUs endorse the project, confirm industry interest therein and establish a sound basis on which to engage in discussion with the producers about the possible commercialisation of the project.

The objective of the MOUs is to facilitate the formulation and negotiation of possible transactions. Image’s scoping study (released 1 December 2008) demonstrated that Image’s significant resources can potentially be exploited:
1 on a standalone basis; or
2 by an established producer(s); or
3 a combination of the above.

Existing West Australian producers, with established infrastructure and expertise, have diminishing reserves but an apparent limited ability to replace the same from their local exploration endeavours thus presenting a compelling case for them and Image to examine how to best take advantage of the parties’ respective competitive advantages.

The producers not only have significant infrastructure (which, if not already underutilised, is likely in the near term to become under-utilised) but they also have mining and processing expertise all of which could deliver real cost savings in any mining of Image’s large (and likely expanding) resource base.

The MOUs limit the producers’ freedom to acquire Image shares, however, each producer may at any time acquire up to 5% of Image’s issued capital. Image considers that the MOUs potentially represent a significant step towards the commercialisation of its North Perth Basin resources while keeping open the option of developing the resources on a stand alone basis.

 

[grace]

Well, George is buying more (good on you George), and news from The Australian today (at least they are getting some coverage)

"THE spike early last month in shares of Image Resources (IMA) broke the drought on the sell side, and all the stale bulls came rushing to the party. The stock got another boost last week with news of memorandums of understanding with two local mineral sands producers to get involved in developing Image's large West Australian resource. Everyone seems to have jumped to the conclusion that the two are Iluka Resources (ILU) and the TiWest joint venture.

But we hear that two foreign mineral sands operators in the state, Saudi Arabia's Cristal Australia and Japan's Doral Mineral Sands, should be not be ruled out."

It would be nice to have a four way fight on our hands....

 

[grace]

Haven't posted for a while but George has continued to do deals with various parties MOU's - all with the restriction that they can only buy up to 5% of the issued capital. As George is no longer a substancial holder (although he is working on it), I guess this is his way to ensure that a takeover does not happen when the sp is so weak.

Some more positive news today....

UP TO 45% ZIRCON IN EUCLA HM ASSEMBLAGE
________________________________________________________
HIGHLIGHTS
• A high value mineral assemblage containing up to 45% zircon with
a combined zircon and leucoxene content ranging from 81% to
90% indicated from limited sampling
• Three mineralised zones identified ranging from 300m to 700m in
width and from at least 1.6km to 2.5km in length, with potential to
extend into an unexplored tenement to the south. Better grades
include 10m at 5.3%HM from 12m, 24m at 3.0%HM from 4m and
10m at 5.0%HM from 20m
• A fourth mineralised zone identified 25km to the east with little
exploration completed between these zones
• A very low slime content of 4% for the shallower mineralisation,
indicating amenability to low cost mining with high recoveries
• The zircon market continues to improve with prices around
US$900/t

 

[Tukker]

Im looking to get back in now. Gonna put an order to buy 20k worth over the next few days. Although i don't think it will be filled for < $0.65

Nice to see it rise steadily regardless of market sentiment

 

[grace]

Im looking to get back in now. Gonna put an order to buy 20k worth over the next few days. Although i don't think it will be filled for < $0.65

Nice to see it rise steadily regardless of market sentiment

It will be nice to have someone to chat to here too.

George must be getting close to his settlement from Opes, and then I hope he starts buying in bigger chunks. I hope we see $1 soon.

 

[speves]

Your not alone in the world Grace...from today's Australian......

The other news worth noting this week came out of Image Resources . This Perth-based junior has just announced that a second Chinese player, a private financial group based in Beijing, has signed a memorandum of understanding covering Image’s heavy minerals deposit in the North Perth Basin, with its high zircon grades. In February an MOU was also signed with a company associated with the Hainan provincial government in southern China.

Image has made some extraordinary discoveries in the basin, much of it near the operations of Iluka and the foreign-controlled Tiwest joint venture. Extraordinary in size as well as grade. (Meanehile, Image has also returned zircon grades up to 45 per cent in the Eucla Basin.)

It was only a matter of time before these heavy minerals assets became the subject of a bidding war, or a takeover of Image.

Consider the prize: all of 6.4 million tonnes of contained heavy mineral (limonite, zircon, rutile/leucoxene), most of that at the advanced Cooljarloo deposit. Image is targeting 20 million contained tonnes across all its properties. It is on its way: at the Atlas deposit there is an open-ended 900m high grade zone near the surface.

Watch this space!

 

[Tukker]

The shares i was planning to sell to buy into image just jumped 50% in one day, and 35% the next so i might not be able to buy image for another week... What a strange market. But don't worry ill add to the buyers side soooon and compete with George.

Everything is going as we expected with image - UP!

 

[Tukker]

Placement for 3 mil, i think everyone was expecting this.

55cents, lucky sophisticates.

Wonder if we are gonna see a weakening of the price now.