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Re: MTN - Marathon Resources

Kimo= I don't know if you guys noticed, but CITIC and THG have a entered into an MOU and THG has now become an associate of CITIC and another announcement has just come out that CITIC now has a 19.9% stake in MTN.

It's the same deal by my understanding kimo. CITIC and THG have been in cahoots for a while in Australia. Google them and you'll see what they're up to. I think Southern Gold is another joint investment.
 
Re: MTN - Marathon Resources

Marathon Resources

Reflecting strong corporate interest in the uranium sector and the quality of its Mt Gee uranium deposit, Marathon Resources continues to trade well in advance of Crosby's $3.52 a share takeover offer. We see little downside for shareholders given current circumstances, including the possibility of rival bidders emerging. Reflecting its confidence, Marathon has appointed one of Australia's most experienced resource executives as its new CEO.

Fat Prophets first recommended Marathon Resources at 72 cents in March 2006 (Fat Mining 16). Our last review of this stock was in February (Fat Mining 68).

Since our last review in March, there has been a clear acceleration of the upward trend. As a result, the stock achieved a new all-time high of $6.42 last week. This represents a gain of 145% in just one month.

Following such rapid gains, the upward trend of any stock would be at risk of pausing for consolidation. Marathon is no exception. In the near term, we anticipate further consolidation with last week's low of $5.10 providing initial support.
Given the strength of the longer term trend, we believe the outlook for Marathon remains positive. In time, we expect prices to extend to new highs above $6.42.

As we have commented in our recent reports on Marathon, corporate activity in the uranium sector in Australia has grown to reach fever pitch. The best recent example of this is the takeover bid of Summit Resources by one of our uranium favourites, Paladin Resources.

Of course, Marathon Resources, with its large, flagship Mt Gee uranium deposit in South Australia, has been one of the companies in the best position of all to benefit from the frenetic sentiment in the sector.

Indeed, Crosby Capital Partners announced a substantial increase its cash takeover bid for Marathon, boosting its bid from $0.68 a share to $3.52 a share.

Marathon's directors have encouraged their shareholders to follow our advice and ignore the Crosby takeover bid.
Like us, they believe the offer price is inadequate compared to other recent uranium transactions, is opportunistic, and does not represent fair value for what is one of Australia's biggest undeveloped uranium deposits.

As we commented in our last note on Marathon, Crosby says its revised offer is in response to the strong increase in the price of uranium and the resulting strong performance of the uranium sector as a whole, particularly in Australia. Interestingly, they also believe the underlying fundamentals of Marathon have not changed since their original offer.

Our interpretation of all of this is that Crosby is trying to downplay any contribution that Marathon management has made in terms of adding value, as they push the line that the surging Marathon share price is due only to higher uranium pricing and favourable sentiment.

We reiterate our view that this is misplaced. Of course, uranium prices have surged to a record high of US$113 a pound and sentiment in the sector has never been better. But to suggest that Marathon management has done little to add value is laughable.

Marathon has made substantial progress in the development of its Mt Gee Project over the past six months. In particular, it has completed a major drilling program at Mt Gee and the Scoping Study is well advanced.

Management believes that the ongoing development at Mt Gee, with the announcement of a new resource estimate in around three months, along with the surging price of uranium, clearly reflects the opportunistic nature of Crosby's offer.
As we pointed out last time, Marathon is at an important stage. It is involved in an aggressive program of work to increase the confidence in the Mt Gee resource from Inferred to Indicated status, which is a major step towards a full Feasibility Study to assess mining options.

Earlier this month, the company provided an update on the progress of the Scoping Study being prepared by Coffey Mining. The results so far apparently reinforce the company's view of the development potential of the Mt Gee deposit.
The report examines a number of open-pit and underground mining and processing options, with the most prospective so far being underground mining. Furthermore, given the strong uranium price and high uranium grades, the best returns are likely to come from a leach processing facility situated on site.

The block model developed by Coffey mining for the report indicates that a cut-off grade of 400ppm U3O8 is viable for an underground operation targeting a production rate of over 1,000 tonnes U3O8 annually.

This estimate is also based on Marathon's August 2006 Inferred Resource estimate of 45.5 million tonnes of uranium mineralisation averaging 0.068% U3O8, or 69 million pounds of contained U3O8. This figure will be updated further following assessment of the results of the recent Mt Gee drilling program, and incorporation into a new resource estimate.

Uranium resource experts Hellman & Schofield will complete the new resource estimate, which Marathon anticipates will increase the deposit with respect to grade, tonnage and confidence. We anticipate the progressive release of drilling results to market, followed by completion of the resource upgrade within a three-month timeframe.

As our Members know, Mt Gee is in fact one of the biggest undeveloped uranium deposits in Australia, which is continuing to grow in size. It has the major added benefit of being located in South Australia, one of only two states in Australia amenable to uranium mining.

Marathon management began adding value very early on in the piece, when it essentially compiled the current Mt Gee uranium resource without drilling, through the clever utilisation of extensive historical data compiled by previous explorers from the 1960s to the late-1990s.

This data was of sufficient quality to enable Marathon to generate a 3D model of the Mt Gee deposit and the current +30,000 tonne U3O8 resource estimate. Marathon then commissioned independent industry experts, Hellman and Schofield, for an independent assessment of the robustness of its resource estimates, which was positive and verified the resource size.
Mt Gee is part of the 11-12km long uranium-rich Paralana Mineral System that falls within Marathon's 100%-owned EL 3258.
Adding to investor confidence is the fact that Marathon recently appointed Stuart Hall as its new Chief Executive Officer. He has more than 30 years experience in the resources industry in Australia, Africa and Europe, including senior positions with BHP Billiton, WMC Resources and Rio Tinto.

Given the way uranium prices are edging ever higher, along with the unprecedented level of corporate interest in the uranium sector in Australia, we believe Members should maintain their position in Marathon Resources. They are holding one of the sector's best uranium exposures in our opinion.

Accordingly, Marathon Resources will remain held within the Fat Prophets Mining & Resource portfolio.
 
Re: MTN - Marathon Resources

Punter said:
Currently the mkt cap of mtn 'prices in' a lot of those risks. If it was $1bn mkt cap then fair enough it would be very RISKY. but risk is relative to the price. At the current price people are only concentrating on the resources/quality/size, not on the next part which will be covered in scoping/ BFS etc. As the latter parts scoping/BFS/permitting are slowly ticked off the share price will almost certainly rise.

Re: grade. one has to also look at the thicknesses/widths of the orebody as well. these are as /more important than grade. Borschoff says the world needs large tonnage mines. MTN is a large tonnage mine with over 50million tonnes of mineralisation. It is the 3rd largest deposit in australia and one of the largest deposits of its type (hard rock) in the world. Most of the drill results so far have averaged well over the 600ppm odd average grade, so will be upgraded. The thicknesses of the orebody are also quite good.

So far so good for MTN. I await the full report. Its better to get the facts from the company than speculate ourselves, best to concentrate on whats 'in the price' and thats resources only.
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(Borschoff says the world needs large tonnage mines)
Borschoff said that the world needs low grade/large tonnage mines to be exact Punter and that isn't what MTN has. Sorry to be objective however it's best to input correct info. Actually its BMN that is low grade/large tonnage, well at the moment anyway. We'll see how it all pans out in the coming months as they reveal more of the potential resource.
:)
 
Re: MTN - Marathon Resources

Apparently CITIC and Talbot Holdings both purchased 19% each of MTN on Friday. Potentially we have 2 bidders going to war over MTN next week.

Article in this mornings Courier Mail business section. The online version doesnt carry it though.
 
Re: MTN - Marathon Resources

TheAbyss said:
Apparently CITIC and Talbot Holdings both purchased 19% each of MTN on Friday. Potentially we have 2 bidders going to war over MTN next week.

Article in this mornings Courier Mail business section. The online version doesnt carry it though.
Click to expand...

Actually CITIC and Talbot have created a joint venture in which they have pooled their holdings together. The 19% figure you see is the holding owned by the JV between CITIC and Talbot. They are both required to report that 19% figure. But they both don't own 19% each, in total they do. The purpose of this is clear - to act as a blocking stake in the case of a takeover. They see Mt Gee as valuable.
 
Re: MTN - Marathon Resources

MTN's been a bit bearish the past few weeks since over extending itself. It's descending towards a longer term up trend line that might give it some support to turn up. Support at $5.10 ish might hold it up too. It could break one way or the other if it does culminate around the green circle. It's not very convincing yet though. Needs to be reviewed.
 

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Re: MTN - Marathon Resources

kennas said:
MTN's been a bit bearish the past few weeks since over extending itself. It's descending towards a longer term up trend line that might give it some support to turn up. Support at $5.10 ish might hold it up too. It could break one way or the other if it does culminate around the green circle. It's not very convincing yet though. Needs to be reviewed.
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Now MTN is a REAL uranium resource kennas ;) , cheap too. Technicals can only show so much, but in a rising commodity market, conditions could not be better to develop Mt Gee mine and resources. Hope mngmt get stuff going, its been a while between drinks {burp}, when was the last drill announcement?
 
Re: MTN - Marathon Resources

Punter said:
Now MTN is a REAL uranium resource kennas ;) , cheap too. Technicals can only show so much, but in a rising commodity market, conditions could not be better to develop Mt Gee mine and resources. Hope mngmt get stuff going, its been a while between drinks {burp}, when was the last drill announcement?
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I believe it was 14th of march....... It's over due for an update....... Must reach 100 word limit....... :)
 
Re: MTN - Marathon Resources

Stock looks like its breaking down, along with every single u junior on the mkt :banghead:, cept its correcting when the company fundamentals could not be better :banghead:
 
Re: MTN - Marathon Resources

Latest drill results as attached. Market does not give a **** about these right now, for whatever reason. But I care about my companies and I feel its good progress being done, although mkt does not recognise. That's fine with me.
 
Re: MTN - Marathon Resources

So what does everyone think of the downturn in share price considering the results of drilling from MTN and the fact that the spot price of U is about to change? Why is the price on a downturn?
 

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Re: MTN - Marathon Resources

guys uranium stocks are all out of favour at the moment.

AGS, TOE, CUY, MTN, PNN, all been hit in last week or so. most down 10-15%

funnily enough its has happened all on the back of 3 mine policy been scrapped!

i would not worry to much about it, ive only recently entered CUY, am in the red now but there will be a turnaround soon.

also actually made an entry on URA since it has dropped 20%
 
Re: MTN - Marathon Resources

dj_420 said:
guys uranium stocks are all out of favour at the moment.

AGS, TOE, CUY, MTN, PNN, all been hit in last week or so. most down 10-15%

funnily enough its has happened all on the back of 3 mine policy been scrapped!

i would not worry to much about it, ive only recently entered CUY, am in the red now but there will be a turnaround soon.

also actually made an entry on URA since it has dropped 20%
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Thanks dj, agree with your comments on this point. I don't see them coming out of this rut, until every other stock on the ASX gets overvalued, then people will start to see some value :confused:
 
Re: MTN - Marathon Resources

kennas said:
MTN's been a bit bearish the past few weeks since over extending itself. It's descending towards a longer term up trend line that might give it some support to turn up. Support at $5.10 ish might hold it up too. It could break one way or the other if it does culminate around the green circle. It's not very convincing yet though. Needs to be reviewed.
Click to expand...
Looks to have found support as indicated. Starting to turn perhaps, but maybe too early to tell. Wait for EOD confirmation perhaps. I'm concerned at this stage that general market consolidation/weakness will turn the TA on it's head.
 

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Re: MTN - Marathon Resources

kennas said:
Looks to have found support as indicated. Starting to turn perhaps, but maybe too early to tell. Wait for EOD confirmation perhaps. I'm concerned at this stage that general market consolidation/weakness will turn the TA on it's head.
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Failed badly intra day at 5.50 and dropped back. 5.50 estab as a bit of resistance. Currently dropped below 5.00 uptrend and horizontal support, which is of concern. Currently 4.85, next stop 4.00 perhaps. Will be interesting to see how it's supported today and if there's any 'technical' buying. Not sure if that can relate to MTN but we shall see. I'm still holding free carried from selling at the top - fortunate, and maybe lucky.
 

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Re: MTN - Marathon Resources

yeah, i'm free carried on this too, but i am free carrying a LOT! :eek:
my uptrend line found support at 4.80ish... but yours is more accurate...

in that case, 5 buck close is key... excluding an intraday spike down.
 
Re: MTN - Marathon Resources

Rafa said:
yeah, i'm free carried on this too, but i am free carrying a LOT! :eek:
my uptrend line found support at 4.80ish... but yours is more accurate...

in that case, 5 buck close is key... excluding an intraday spike down.
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Has been well supported intra day which is encouraging. Initial bounce off 4.81. Still early, and I don't like calling things intraday, as it normally leads to embarrassment. I see where you get the 4.80 from. Perhaps that's more accurate? Seems to be at the moment.
 
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