MMC - Marengo Mining

Ruprect said:

Pre Feas/Conceptual Mining Study results just announced.

Has found the project to be economic, will now move to Bankable Feas Study. Good news.

From the announcement:

Summary
Key outcomes of the Yandera Project CMS include:
•
a conceptual open pit encompassing 406Mt to underpin an initial 10-year mine life;
•
initial mining rate of 25Mtpa for the first two years increasing to 40Mtpa;
•
production of 112,000t and 88,000t of contained copper for the first two years, increasing to an average of 124,000tpa from the third year onwards.
•
production of 4,200t of contained molybdenum for the first two years, increasing to an average of 6,700tpa from year three onwards.
•
initial US$942M capital cost estimate with additional US$198M to complete the ramp-up to 40Mtpa;
•
forecast cash operating costs of US$10.09/tonne (US$0.75/lb) for the first two years, and US$9.09/tonne (US$0.86/lb) at 40Mtpa;
•
strong economic parameters using a copper price of US$1.50/lb and a molybdenum price of US$15.00/lb.
The CMS has confirmed the potential of the Yandera Project to become a very significant strategic source of copper and molybdenum production in global terms, with a successful development expected to generate substantial value for Marengo shareholders and the nation of PNG.

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UPKA said:

give it few days, it'll pop up over the news headlines, then we'll see some serious SP movements!

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onshow said:

when these feasibilty studies comes out later in the year im sure it will send the share price throgh he roof!

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UPKA said:

Anything to back up thisi claim? as far as I know, when their pre-feasibility study came out with capex of over 1.6b (if i remembered correctly), especially under the current economy condition it'll be hard to get funding or joint venture partners that has that sort of cash... BHP has once explored on the tenant before, pulled out due out due to the huge capex and low grade of the mine (higher production cost).

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UPKA said:

Anything to back up thisi claim? as far as I know, when their pre-feasibility study came out with capex of over 1.6b (if i remembered correctly), especially under the current economy condition it'll be hard to get funding or joint venture partners that has that sort of cash... BHP has once explored on the tenant before, pulled out due out due to the huge capex and low grade of the mine (higher production cost).

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YOUNG_TRADER said:

MGO​

Mkt Structure

Shares
125m
65m 20c 28/2/08 Options

Mkt Cap @ 20c = $38m (Includes $13m worth of options)
Mkt Cap @ 30c = $57m (Includes $13m worth of options)
Mkt Cap @ 40c = $76m (Includes $13m worth of options)
Mkt Cap @ 50c = $95m (Includes $13m worth of options)


Cash
$8m + $13m from opies = $21m


Projects

Yandeera Copper/Moly + Gold, 100%, PNG

This project has had something like $30m spent on it be previous explorers such as BHP who left the project in the 1970's due to very low commodity prices,

BHP outlined a resource of 1.143 Billion tonnes @ 0.33% Copper + 0.015% Moly = 0.5% Copper Equiv

Marengo did some intial work last year to confirm all the previous work and estimates and came out with a first pass intial JORC of 371Mt @0.35% Cu + 0.014% Moly = 0.49% Cu Equiv

A new JORC is due out very shortly and should be in the order of say 500Mt-600Mt@0.5-0.6% Cu Equiv

Its only a matter of time however before MGO deliver a 1Billion tonne + JORC grading 0.5% Cu Equiv as we know its there, its just not JORC compliant as the estimation was done pre 2004 when the JORC code was introduced.

Of significant importance is the fact that about 30kms to the North, Chinese firms are developing the large Ramu Nickel Mine and thus alot of the infrastructure costs such as power roads and even transport are mostly taken care of.




Value Comparison
The most obvious comparison is with PMH, Pac Mag which went from 20c - 60c over 2 days after releasing a JORC for its Ann Mason deposit in Nevada, it was 810Mt@ 0.44% Cu Equiv, HOWEVER PMH's deposit has about 100m - 200m of overburden soil, ie the mineralisation doesn't really start until you get 100-200m down, thats alot of top soil/waste soil

In contrast MGO's Yandeera's mineralisation is from surface! ie very very low waste and top soil

Now PMH at 50c = Mkt Cap of $75m
@ 75m MGO should be at 40c


Yandeera EV (Take Over value)

Now the best way to value a large Copper deposit is on an EV per lb basis, generaly speaking large copper deposits have an EV per lb basis of between 2.5c as an absolute minimum all the way up to say 25c per lb based on grade, how deep the deposit is, infrastrucutre, risk and so on



Using the lowest EV of 2.5c per lb and Yandeera's current 4Billion lb's Copper Equiv = $100m = 50c MGO

Assuming the New JORC comes in at say 500Mt@0.5% Cu Equiv = 5.5Billion lb's Cu Equiv @ 2.5c per lb = $137.5m = 72c MGO



Valuation

Current EV Yandeera = $100m
Expected New JORC = $137.5m

Cash + Options = $21m



Current Value = $121m = 63c

Expected New Value = $158.5m = 83c



Summary

There is alot of info on MGO's web page so if your curious where I got alot of my information from go there,

There is also a few articles out there that recommend MGO as the next Tethyan Copper type takeover,

For some reason the Aussie Mkt sees PNG as risky which is crap, the country depends on mining for its GDP so it will always assist, moreover it is corrupt so if you allign Govt and Company interests you won't have any problems, the PNG gov't super fund has invested in MGO so I'd say the Gov't will ensure MGO gets approvals for everything they need so as to maximise MGO value

Finally MGO is looking to list on the TSX or North American mkt later this year, management have been told that given their current position where they listed on say the TSX their Mkt Cap would be 2-3x what it is now.

I expect a NEW JORC soon as well as more spectacular drilling intersections ie 81m at 2.39% Cu Equiv

Enjoy

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