MGT - Magnetite Mines

[sandybeachs]

Re: unjustly and unfairly being sold down

looking at the assets below and considering Royals approx $35mm market cap. one might say potentialy has plenty of upside if exploration hits the target.

especially given the map provided yesterday of Railway Project (Iron Ore) Pilbra, nice having neighours such as Rio Tinto, FMG & Hancock Prospecting. i wonder if Railway comes up trumps whether one of the previous companys consider a Joint Venture..


IRON ORE

Pilbara Iron Ore Projects
[Pilbara, Western Australia]

Warriedar Joint Venture Project
[Midwest, Western Australia]

Plateau Ironstone Project
[Midwest, Western Australia]

Tallering Project
[Midwest, Western Australia]

URANIUM

Egnar Uranium Project
[Colorado, USA]

Wray Mesa Uranium Project
[Colorado, Utah, USA]

La Sal Project
[Colorado & Utah, USA]

Thirtynine Mile Volcanic Field
[Colorado, USA]

 

[greggy]

Re: unjustly and unfairly being sold down

we'll see what happens in the 1st half of 2008..

keep this post and if i'm wrong then you can call me wrong..

Warriedar Joint Venture Project

i'd be expecting further good drilling results (Lister & Gap)

having said that, Warriedar is just a good starting platform for Royal

Royal will move forward with it's Pilbra assets (Railroad & Prairie Downs projects)

http://www.royalresources.com.au/project_details.asp?id=37

also with the following Iron Ore assets:

Plateau Ironstone Project

http://www.royalresources.com.au/project_details.asp?id=32

Tallering Project

http://www.royalresources.com.au/project_details.asp?id=33

as well as it's Uranium assets, which we know they are currently drilling Egnar Uranium Project

http://www.royalresources.com.au/project_details.asp?id=35

Sandybeachs,

"Without doubt one of the best up and coming Junior companys on the ASX" you say. Big statement here, but just providing little more than a rushed list of projects just doesn't stack up. There are a number of promising junior companies out there who already have more advanced projects.

 

[sandybeachs]

Re: unjustly and unfairly being sold down

hi greggy

i think i provided sufficent links and maps for people to make an informed decision about Royal.

many people believe Royal have excellent assets and management.

IMO it's only a matter of being patient and investors will be rewarded.

 

[YOUNG_TRADER]

Re: ROY - Royal Resources

Greggy,

I reckon ROY is one of the most undervalued Fe juniors based on the fact that they will get a JORC at their Warriedar GBG JV and that this DSO ore will be used by GBG.



Mkt Structure
100m shares +40m 20c options

Cash = $10m + $8m from 20c opies (if exercised) = $18m

Mkt Cap un-diluted @ 30c = $30m with $10m cash, so EV = $20m

Mkt Cap fully-dilluted @ 30c = $42m with $18m cash so EV = $24M

It has a few Iron Ore projects,

Warriedar which is near GBG's Kara and thus GBG farmed in for a 60% interest,

Intial drill results, with more to come anyime now
Hole SNC 002 60 metres @ 62.6% Fe from 59 metres
Hole SNC 005 27 metres @ 63.1% Fe from 55 metres
Hole SNC 008 22 metres @ 63.9% Fe from 44 metres

Those are some very very meaty hits and there is no infrastructure issues as the JV will just use GBG's stuff


Plateau project which they drilled and had multiple 5m hits of 56%Fe ore at surface

Tallering is a prospective project that is adjacent to Mount Gibsons Tallering project

Pilbara The company also has a few good Pilbara Iron Ore projects surrounded by RIO/FMG/BHP-Hamersley

US UraniumThe company also has a very large US Uranium focus similar (though far less advanced) to BLR


Its interesting to note that the Russian Nickel giant Norisk Nickel owns 2% of the shares

 

[sandybeachs]

Royal hunting for elephants

from recent Open Briefing

""This is where the elephants often hide.""

Chairman Phil Crabb
As I have mentioned, this is managed by Gindalbie and they have indicated to us that the next round of drilling will commence early in the 2008. Some of the holes for the next program have been approved, however additional holes will be
required and the regulatory approval for these is now being sought. So the upshot of this is that there are logistical issues and although it would be expedient to be able to continue drilling there are these other matters that we need to co-ordinate.
The next phase of drilling will be to fill the gaps of the present drilling, bring the line spacing down to 100 metres and start looking further along strike under areas of cover. This is where the elephants often hide.

 

[pan]

Re: ROY - Royal Resources

Thanks sandy but when is this announcement due that you have been talking about? I thought it was meant to be out before christmas.

 

[sandybeachs]

Re: ROY - Royal Resources

Thanks sandy but when is this announcement due that you have been talking about? I thought it was meant to be out before christmas.

very very long delays with getting Lab assay results, every man and his dog wants their results yesterday.

it can be frustrating but those with patiences will be rewarded.

i've got a feeling plenty will happen this year all of it being good, especially when they've appointed a managing director.

 

[Go Nuke]

Re: ROY - Royal Resources

Gee YT...you must think this is an absolute BARGAN right now!!!

I do..but no money to put where my mouth is

One of the only companies on my watchlist to end down!!!

 

[gilbertw]

Re: ROY - Royal Resources

Yes Go Nuke, I agree.

Very weak demand at the moment however. This doesn't seem to have bounced back after the ASX rebound... people chasing less risk I think, but if you buy at 21 cents how much risk is that? Its already 40% down on a month ago... The question is where will it be in 12 months? I don't think 21 cents, ROY has more potential than that.

 

[Surly]

Re: ROY - Royal Resources

Greggy,

I reckon ROY is one of the most undervalued Fe juniors based on the fact that they will get a JORC at their Warriedar GBG JV and that this DSO ore will be used by GBG.


Mkt Structure
100m shares +40m 20c options

Cash = $10m + $8m from 20c opies (if exercised) = $18m

Mkt Cap un-diluted @ 30c = $30m with $10m cash, so EV = $20m

Mkt Cap fully-dilluted @ 30c = $42m with $18m cash so EV = $24M

YT,

If the above facts haven't changed, with a market cap presently at 18m it is being valued at its cash value only??

cheers
Surly

 

[YOUNG_TRADER]

Re: ROY - Royal Resources

Greggy,

I reckon ROY is one of the most undervalued Fe juniors based on the fact that they will get a JORC at their Warriedar GBG JV and that this DSO ore will be used by GBG.



Mkt Structure
100m shares +40m 20c options

Cash = $10m + $8m from 20c opies (if exercised) = $18m

Mkt Cap un-diluted @ 20c = $20m with $10m cash, so EV = $10m

Mkt Cap fully-dilluted @ 30c = $28m with $18m cash so EV = $10M

So basically the EV of $10m means that you are paying $10m for the following

Warriedar which is near GBG's Kara and thus GBG farmed in for a 60% interest,

Hole SNC 002 60 metres @ 62.6% Fe from 59 metres
Hole SNC 005 27 metres @ 63.1% Fe from 55 metres
Hole SNC 008 22 metres @ 63.9% Fe from 44 metres

At shine per the map I have potential 450m length by a 100m width, the avg hits were 30m's and the S.G. is 4.5, 450x100x30x4.5 = 65Mt's@60%Fe+

This deposit would be very valuable to ROY as they can use their JV partners GBG's plant and rail etc etc

@ $10/t and a 40% interest = Net EV of $150m to ROY

As its still an exploration target I'll give it a 10% probability that still = $15m

Additionally, they had further success at the Gap and Lister prospects,

Gap Prospect: GPC004 with 7 metres @ 57.3% Fe from 9 metres.
Lister Prospect: LRC002 with 6 metres @ 60.1% Fe from 38 metres and 19 metres @ 60.1% Fe from 52 metres.



Plateau project which they drilled and had multiple 5m hits of 56%Fe ore at surface

Tallering is a prospective project that is adjacent to Mount Gibsons Tallering project

Pilbara The company also has a few good Pilbara Iron Ore projects surrounded by RIO/FMG/BHP-Hamersley

US UraniumThe company also has a very large US Uranium focus similar (though far less advanced) to BLR


Norisk Nickel owns 2% of the shares

I am holding and waiting for vindication of my analysis

 

[Sean K]

Re: ROY - Royal Resources

65Mt's@60%Fe+[/B]

YT, it looks a little deeper than 30m to me, mineralisation starts from close to surface and goes to 120m, and open...I might be reading this cross section incorrectly. And the strike looks to be about 600m to me. Where'd you get an S.G of 4.5 from?

Ugly chart. MC will be less than cash on hand soon. With potentially 65Mt + haematite?

 

[Sean K]

Re: ROY - Royal Resources

Holy Toledo Batman, Any bottom fishers out there? Check the last few posts with details on their tenaments and drill results, to this chart.....

(not holding, but thinking about dirtying the fingers)

 

[crombo97]

Re: ROY - Royal Resources

Yeah Kennas ive been watching this one close lately.
Ive been buying the heads and oppies on the recent soft prices.
I believe at this price its great buying IMO.

 

[Synergy]

Re: ROY - Royal Resources

I think if it can push up above 22.5c I'll look to get in. If it goes below .185 I don't think I'll be buying in the near future. That's my dodgy effort at some technical analysis.

 

[Go Nuke]

Re: ROY - Royal Resources

Yeah I cant believe how low these are going too

Being a bullish man on Uranium I think they have great potential in that area in the future year or so.....but of course not only that but the Iron Ore.

I dont get it really... but as per usual Im already sitting on a loss with ROY and no cash to average down so Im just keen to hold longer term

This has to be ready to reverse soon wouldn't you think???

 

[YOUNG_TRADER]

Re: ROY - Royal Resources

Well we knew it was cheap

And we've watched it get even cheaper of late

So its about time someone realised it was a good takeover target,

Also the proposed Uranium spin off should at a few cents of value depending on the exact in specie distribution ratio

(p.s. this is from another forum, I must give credit to another poster who found this article)


From mergermarket

Royal Resources, the listed Australian metals explorer, would seriously evaluate takeover approaches from potential bidders in May or June, said a company source.He said that while the company has actively spoken to some players in China, potential bidders could also include players such as Gindalbie Metals and Sinosteel. Royal would appeal to downstream players located in China and Japan that have steel mills, he explained. The company intends to participate in the ongoing industry consolidation, he continued. He said that the company owns 40% equity in the Warriedar Project and it would alone have a valuation of AUD 100m (USD 90m). Besides this, the company is also in the process of building the value of its other iron ore assets, he continued. The company has a 100% interest in eight tenements in the Pilbara region and has secured necessary approvals to drill at its tenements, he said. He mentioned that the management, Board and associates hold approximately 25% equity in the company. The company plans to drill at its projects in February and March, evaluate assay results by May and assess takeover approaches in May or June. Patersons are the company's corporate advisors.


In the meantime, the company is also likely to spin off its uranium assets in an IPO and list on either the ASX or TSX, he said. The company is actively looking to acquire uranium tenements in Colorado and Utah, he added. The IPO would see Royal shareholders receive an in-specie distribution and settling down with equity in the new company of 30%-40%, he said. The IPO size is likely to be in the range of USD 15m-20m and the company is looking to draw a US company as a cornerstone investor who would be interested in acquiring 25%-30% equity in the new company at the IPO stage, he said. The prospectus for the proposed IPO and a shareholders approval to proceed
with the IPO should be complete in six months time, he continued. Royal Resources has an approximate market cap of AUD 16.3m (USD 15m). by Surabhi Choudhary in Singapore

 

[YOUNG_TRADER]

Re: ROY - Royal Resources

Well given the article which points to the spin off and in specie distribution of the company's Uranium division followed by the takeover/sale of the rest of the company I have updated my research to include new info

ROY​

Mkt Structure
100m shares +40m 20c options

Cash = $10m + $8m from 20c opies (if exercised) = $18m

Mkt Cap un-diluted @ 20c = $20m with $10m cash, so EV = $10m

Mkt Cap fully-dilluted @ 30c = $28m with $18m cash so EV = $10M

So basically the EV of $10m means that you are paying $10m for the following

Warriedar which is near GBG's Kara and thus GBG farmed in for a 60% interest,

Hole SNC 002 60 metres @ 62.6% Fe from 59 metres
Hole SNC 005 27 metres @ 63.1% Fe from 55 metres
Hole SNC 008 22 metres @ 63.9% Fe from 44 metres

Additionally, they had further success at the Gap and Lister prospects,

Gap Prospect: GPC004 with 7 metres @ 57.3% Fe from 9 metres.
Lister Prospect: LRC002 with 6 metres @ 60.1% Fe from 38 metres and 19 metres @ 60.1% Fe from 52 metres.


Regardless of whatever figures I put forward, a company source (as quoted in the article) has estimated ROY's share to potentially be worth $100m

We are currently trading at 10% of this value

So cash of $10m + 10% EV of potential value of Warriedar to ROY ie $10 = $20m or current mkt cap

THAT MEANS THE FOLLOWING PROJECTS ARE BEING GIVEN 0 VALUE

Plateau project which they drilled and had multiple 5m hits of 56%Fe ore at surface

Tallering is a prospective project that is adjacent to Mount Gibsons Tallering project

Pilbara The company also has a few good Pilbara Iron Ore projects surrounded by RIO/FMG/BHP-Hamersley


US UraniumThe company also has a very large US Uranium focus similar (though far less advanced) to BLR

Now the article quotes a company source stating that these Uranium projects will be IPO'd off into a new entity with ROY shareholders recieving an in-specie distribution of free shares.

The IPO would see Royal shareholders receive an in-specie distribution and settling down with equity in the new company of 30%-40%, he said.

The IPO size is likely to be in the range of USD 15m-20m

So I'd assume they will look to raise between 75m shares at 20c 100m shares at 20c, if we assume 100m at 20c ie $20m for simplicity and assuming ROY opts for the lower 305 holding to distribute the company would issue around 40m free shares = an inspecie distribution of 1 share for every 2.5 held and because they are 20c shares we could assume a value of say 8c per each in-specie

These are all very rough figure but as you can see ROY does offer alot of upside as I have always felt, moreover this article alludes to exactly what I believed, namely that should ROY not be appropriately value it will get taken over and the most likely candidate IMO would be its JV partner GBG

Thoughts?

 

[zt3000]

Re: ROY - Royal Resources

Thoughts?

YT,

nice research yet again. The problem with all of this, is IMO mkt uncertainty. Pre-Subprime many would have jumped on this without a flash.

The Uranium spin off is probably not as attractive as it was a year ago and thus i dont beleive it a big factor for the investor/speculator.

In regards to GBG, not sure they would try to aquire ROY after SDL. But then again who knows what the ____ is going on at the moment ahaha. We may get a chinese backer and then who knows. Maybe if the BHP RIO deal falls through we may get BHP aquiring some of these smaller exploration companies.

Only time will tell

 

[Riles]

Re: ROY - Royal Resources

Regardless of whatever figures I put forward, a company source (as quoted in the article) has estimated ROY's share to potentially be worth $100m

I read the quote in the article differently:

"He said that the company owns 40% equity in the Warriedar Project and it would alone have a valuation of AUD 100m."

To me that means the whole Warriedar project valued at $100m and so ROY's share to be 40% of that - $40m.

A moot point but worth clarifying.