QOL - Queensland Ores

[doogie_goes_off]

I have been a little concerned at the lack of news with regard to exploration for new Moly/Tungsten near mine and at Bamford Hill. This is what the money should have been for so it's back to the calculator for me to see if they can make money for long enough to make a profit over the next 2 years that's worth hanging on for. SP is woeful, QOLOA was a waste of spec money too.

 

[nioka]

I have been a little concerned at the lack of news with regard to exploration for new Moly/Tungsten near mine and at Bamford Hill. This is what the money should have been for so it's back to the calculator for me to see if they can make money for long enough to make a profit over the next 2 years that's worth hanging on for. SP is woeful, QOLOA was a waste of spec money too.

A little news would be appreciated. The SP certainly isn't showing the improvement expected when a company finally gets into Production. Maybe the old saying that no news is good news applies. We can only hope that it does in this case.

 

[shinobi346]

You'll be pleased to hear then that the first Tungsten Concentrates have been sen to Brisbane ready for export once they are signed off.

 

[StatsMan]

You'll be pleased to hear then that the first Tungsten Concentrates have been sen to Brisbane ready for export once they are signed off.

What is going on? QOL have made their first shipment of Tungsten and the share price has gone down!!! I bought in at 7 cents because I viewed that as good value, but the stock is now below 6 cents - is this a serious bargain? We are talking about a company that is mining and processing tungsten for the Chinese with some good contracts in place. Looks to me as though the market capitalisation is pretty low relative to the earnings from the tungsten being produced - any thoughts anyone?

 

[ands]

Maybe people are waiting for that report that shows they are cashflow positive. You would hate to buy into a company and then find out is an India Resources...

 

[Pingu]

Maybe people are waiting for that report that shows they are cashflow positive.

I would think that they will be cashflow positive. According to their 29/05/08 presentation they forecast $9.0 million a year surplus cash flow. Since then I am not aware of any event that would have changed this. They had some problem with the processing which is why the first shipment was not made in July as they forecast, but I believe they have resolved this.

I actually spoke to one of the directors of QOL the other day. He said that their primary focus at the moment will be on extending the mine life through exploration. I also asked when they expect to get paid for their first shipment, he said that normally it would take up to a couple of months but at the moment they are in negotiations for trade finance so that they can get paid earlier. I guess that this will allow them to quickly focus on extending the mine life through exploration.

I cannot understand why the current share price is so low. I thought that there must be something that I did not know which is why I rang the company. I guess its just people scared about the current financial crises.

 

[StatsMan]

I would think that they will be cashflow positive. According to their 29/05/08 presentation they forecast $9.0 million a year surplus cash flow. Since then I am not aware of any event that would have changed this. They had some problem with the processing which is why the first shipment was not made in July as they forecast, but I believe they have resolved this.

I actually spoke to one of the directors of QOL the other day. He said that their primary focus at the moment will be on extending the mine life through exploration. I also asked when they expect to get paid for their first shipment, he said that normally it would take up to a couple of months but at the moment they are in negotiations for trade finance so that they can get paid earlier. I guess that this will allow them to quickly focus on extending the mine life through exploration.

I cannot understand why the current share price is so low. I thought that there must be something that I did not know which is why I rang the company. I guess its just people scared about the current financial crises.

Hi Pingu,

What you are saying makes perfect sense to me - the company looks set to be making a good profit over the next few years from this mine and further their exploration and other ventures. Hopefully this will lead to further company growth. Good to know that somebody else things the current share price isn't a true reflection of the company.

 

[doogie_goes_off]

Supply of shares is drying up, looks like the dumpers have finally got out and a couple of rises in a row for QOL holders

 

[Pingu]

Upon rereading their last announcement about the first shipment, I think the shipment is sitting at the dock waiting for the quality to be confirmed by an independent party. Maybe when this is confirmed and the shipment actually 'ships' we will see some reaction in the price.

 

[Pingu]

Heres a brief summary of their financials as at the end of the last quarter.
Cash in bank ~$8 mill, current market cap ~$12 mill, no debt, forecast surplus cash flow $9 mill. Plus they have only just made their first shipment (sitting at the dock) with a cost of production for the year of ~$20 mill.

 

[doogie_goes_off]

Those figures don't make QOL profitable over the longer term though, they need to get on with some near mine exploration and find some more resources or very quickly 2-3 yrs of mine life will turn into a processing plant fire sale.

 

[Pingu]

True they need to extend the mine life, although I believe they are reasonably confident of doing this and the free cashflow should allow them to carry out this exploration. In the medium term they also have the Mount Cavendish (spelling?) tenement.

 

[jman2007]

True they need to extend the mine life, although I believe they are reasonably confident of doing this and the free cashflow should allow them to carry out this exploration. In the medium term they also have the Mount Cavendish (spelling?) tenement.

It isn't good enough for a company to be "reasonably confident" Pingu, we need hard numbers, and they need the extra tonnes in the ground. Solution: get in there with a grade control rig, and make a frickin' pin-cushion out of it.

Those figures don't make QOL profitable over the longer term though, they need to get on with some near mine exploration and find some more resources or very quickly 2-3 yrs of mine life will turn into a processing plant fire sale.

That's true doogie,

$8M in the bank isn't really anything to write home about by any means. It's also difficult to say which way operating costs will go in the over the next few years, but it would be a brave man who would predict that they would decrease (industry wide that is). We've heard very little of Mt Cannindah recently, with Wolfram being the prime focus for the company... some suggestion that there were some teething problems with the first round of ore processing (?).. I thought the first shipment was scheduled to be sent some weeks ago. It certainly didn't look like much material in those little bulka bags, I guess it's still a bit of a milestone though...

jman

 

[CityMiner]

Anyone know why all Molybdenum stocks have taken a massive hit in recent times ?

Anyone know if the Chinese contract QOL has is in AUD$ ?

 

[doogie_goes_off]

No answer, moly seems to be holding it's value pretty well and I am now inclined to think this one is going too cheaply. Where to now? I'm guessing this one will creep back to 5c plus. How may times can I be wrong?

 

[AnDy62]

I'm out of QOL, and all spec holdings, too risky in this environment.
Will be back to buy if they can make it through to being cash flow positive with adequate financing, they will be a worthy punt then IMO. I read about a possible oil and gas pipeline between Russia and China - mmm a lot of moly!
Best of luck to those holding.

 

[jman2007]

I'm very concerned about the well-being of QOL

In my opinion, it has become clear to me that the commissioning problems experienced since the handover have been more serious than we have been led to believe. The other bone of contention is that QOL have made repeated reference to the fact that their cash supplies will be exhausted by Jan 2009, but management "remain confident" that they will be able to source addtional funds. Well the market appears to be somewhat sceptical of this, and this looks to have been factored into the current sp. I'm also wondering if they have the right kind of people on site with the skills to fix these kind of process issues.

If they can't get the cash then it will be game over (obviously). The way in which the trial ore shipment was first exported to China to determine it's suitability for the Chinese market also struck me as a little odd. That was almost one month ago now. Where does that leave QOL in the meantime, pottering around the minesite and doing maintenance while they wait to hear back to see if their product is up to spec? Very strange if you ask me.

Sorry guys, but my prognosis here is a bit bleak.

jman

 

[nick2fish]

Well Done Jman .... write on the money and I hope that your post may have stopped someone from dipping thier toe in the water..... well done Cheers

 

[Family_Guy]

Well....there goes the neighbourhood. I got out early at a small loss.

Sydney - Tuesday - November 18: (RWE Aust Business News) - Queensland Ores (QOL) has suspended operations at Wolfram Camp, north Queensland, to conserve cash while some mining and metallurgical issues are addressed.

This decision has been reinforced in the light of weakness in the molybdenum price and global market conditions.

The mine has not yet been able to achieve target head-feed grade and low recoveries in the treatment plant have been experienced.

To safeguard the future of the company the board has deemed it necessary to reduce the cash expenditure associated with current operations.

The company continues to puruse a number of options, including additional funding and will make a statement regarding these in the near future.

 

[prawn_86]

yep, another small miner bites the dust.

I guess there is a reason these guys were micro caps...

VRE, TMR, MON, QOL lots of boom market high flyers going bust.