RHK - Red Hawk Mining

[Spaghetti]

early results are out, as you'd expect they found iron ore but the grades are very ordinary and with high impurities at depth

would want to get a whole lot better to justify this market cap

The highest grade 56.7% returned a p% over 1%. My understanding (refer geologist thread) is that p% need to be well under 1% or it is not saleable. The only indication I could find (from an old post here) was that it needed to be under .08%. I was surprised to see it green actually, maybe all my hours of trying to my head around all these numbers was in vain lol. From my understanding though the impurities are high. If I do have the right information then it could be viewed as misleading to compare to FMG serenity deposit because they have not got any reserves for that deposit yet as far I know.

 

[Broadside]

maybe FMG can blend their Serenity ore, I don't know, but those drill results (I know it's early days) don't look like an economic deposit, the depth means a high strip ratio and costs for very mediocre grade ore.

 

[matt1987]

can you guys please explain what is meant by the p% ?

isnt a grade of 56% not too bad ?

the sp is jumping up and down like a yo-yo

 

[Broadside]

P% is the phosphorus impurity - you want it as low as possible

also look at high AL2O3 impurity compared to Serenity

the biggest problem to me is the depth, you get 5-10m intersections of mediocre grade (not DSO: direct shipping ore) but you have to clear 50-60m of rock above it...dubious economics at best. That's why you'd want much much better results from here on (imo) or else the stock's got problems.

 

[matt1987]

thanks

yeh my outlook on this one has certainly decreased
............ bugger

i suppose it doesnt help either that all those who bought in at 1c would be having a field day sellin anywhere above 10c

 

[Touch of Gold]

Correct me if I'm wrong, the P% results is being miss read . The highest reading is .12 %. Isn't that just over 0.1 of 1 % which is about 1/10th of 1 %.

 

[Spaghetti]

can you guys please explain what is meant by the p% ?

isnt a grade of 56% not too bad ?

the sp is jumping up and down like a yo-yo

It is complicated and I am no expert so maybe google and read the geology thread. My opinion based on summary of what I have read is that once you have issues with quality you need to spend a lot on processing. For this to be viable you need a huge resource. Having a huge resource in the pilbara means you will need to have enough for mass production that will support a rail and port construction (ala FMG) as emerging juniors will be restricted to small operations using existing infrastructure.

With high p% I cannot find definitive % other than considerably less than 1% to be economic other than a forum member making mention some time ago it should be less than .08. (links on geology thread). The phosphorus can be removed to a degree but takes significant iron ore with it reducing grade. So I would expect the ore needs to be very high grade to begin with. RIO may do this, or have in the past or will do in the future (bit hazy) I believe then the final product is pig iron. Not sure what sales price that compares to DSO.

Aluminum never seen so high so have not read up on that, maybe they mine for the aluminium lol.

The s/p was over priced also when compared to other explorers based on successfull drill results so they really did need to surprise to the upside. The stock appears to have been ramped by traders who probably like the liquidity and the meangingless announcements by the company. You need to careful with this stock as Prawn as suggested.

Plus, maybe terribly bearish of me, think iron ore speculation has ended. I cannot see too many explorers being succesfull. I see none as good value..again may change next week if some hype returns . Have many on my watchlist as I have done all this research so would like to put it to good use.

 

[GeraldFord]

Hi all.

Great thread (fantastic Geo thread as well).

I just had a question (might be more one for the Geo's out there):

Lining up the drill holes with the tenement maps from other announcements (6 June Hamersley Drilling expected to commence in the third week of June 2008 for instance), the first three holes seem to have been for areas marked as 'Interpereted Channel Iron Deposits' yet the next batch of holes (HRC 8,10,11,12) seem to be for areas marked as 'Late tertiary sand and gravel'.

Is there any particular reason why they would be looking for their next round of drilling results to come from non CID drill holes? Sub question, what is 'Late tertiary sand and gravel' in relation to IO? Is it higher\lower lieklyhood\more pure etc?

 

[lizardlegs]

These are 3 holes drilled out of 250. Too early to tell anything. A speccie stock with as much possible upside as downside. Go to boardroom radio and have a listen to the md. ( i hold FMS)

 

[prawn_86]

You dont think the MD has an obligation to talk his company up? I dont think i have ever heard a BRR where an MD says "nah we dont have anything good, lets give up...". lol.

I have met Kevin Wills and he does like to talk thats for sure.

 

[matt1987]

sold out today at 12c ........ call me a spooked investor but there are just too many shares on issue for my liking.

also imo by the time that they finish their drilling and define their resource etc ... the iron ore boom will probably have cooled down. with bhp, rio and fmg pumping their production to the max, their has to be a point where supplies increase enough to slow the demand.

 

[Spaghetti]

Correct me if I'm wrong, the P% results is being miss read . The highest reading is .12 %. Isn't that just over 0.1 of 1 % which is about 1/10th of 1 %.

Sorry .1%. Hard to find good information but my advice is to keep an eye on results. I have read that RIO have suggested iron ore reserves in Australia could double with low cost removal of phosphorus but then that would mean explosion in resources in pilbara with no capacity to ship it. RIO have hismelt subsidiary I ahve learned so seems easier than once was. One refererence I could find is on Iron Ore Holdings prospectus a paragragh reads...

Four grab samples taken by the independent geologist during a recent site visit averaged: 60.17% iron; 3.97% SiO2; 2.23 % Al2O3; 0.100% P and 7.08% LOI. The iron content is very high for this type of deposit and the parameters other than phosphorous are all of export grade. The high phosphorous average content was caused by one sample with a high phosphorus reading

So from that we could at least draw a conclusion that it is not export quality if it averages around .1% ;The average may reduce with more holes but if it increases be armed with as much knowledge as you can. The sell off the other day would have been those could understand the results and they would have got a higher price than now.

At least market cap not so out of place compared to other explorers as it was. It did look weird being valued so highly purely on nearology. It will never have the economy of scale RIO and FMG have that allows for low cost operations and recovery of capex.

sold out today at 12c ........ call me a spooked investor but there are just too many shares on issue for my liking.

also imo by the time that they finish their drilling and define their resource etc ... the iron ore boom will probably have cooled down. with bhp, rio and fmg pumping their production to the max, their has to be a point where supplies increase enough to slow the demand

Matt1987, would be hard decision to sell or buy right now. You know they will do a lot of marketing to have options converted but then if drill results are poor maybe a mad exit. One you would have to watch fairly constantly..though that applies to blue chips also in current market.

 

[Spaghetti]

Hi all.

Is there any particular reason why they would be looking for their next round of drilling results to come from non CID drill holes? Sub question, what is 'Late tertiary sand and gravel' in relation to IO? Is it higher\lower lieklyhood\more pure etc?

I have no idea but will take a guess that maybe detrital ore. This ore can range widely in grade but average quite low normally. The ore is easy to extract though reducing costs. Not usually very large quantity but normally found in conjunction with CID.

 

[Touch of Gold]

sold out today at 12c ........ call me a spooked investor but there are just too many shares on issue for my liking.

also imo by the time that they finish their drilling and define their resource etc ... the iron ore boom will probably have cooled down. with bhp, rio and fmg pumping their production to the max, their has to be a point where supplies increase enough to slow the demand.

Matti , I respect your decision and only time will tell if you made the right chioce......
I,m doing the opposite and buying on pullback. Sure the big three are pumpimg more IO but prices are still rising. You would think the price would at least stabilize, not almost double annually and most resource analyst are predicting the demand will be around for another 10-15yrs. NB:I hold FMS....

 

[matt1987]

i am in no way an expert at this ... very much still an amatuer. the one thingthat was making things difficult was that i didnt have time to monitor the market constantly, so chances are i could miss opportunities to buy and sell. a better place for me at the moment is cash or long term stocks (which i do not regards fms to be - but i wouldnt be surprised if im proved wrong, wouldnt be the first time)

thanks for your opinions guys

 

[Hendrik]

Im in the same boat as matt, i went too long on my initial buy at 20, then lowered my avg at 16 in anticipation for August results and obviously made the common mistake of not following the daily trends, wont make the mistake again.

My interest has now moved on to FMG, using my amateur technical analysis, i have a good feeling about it..

 

[joeyjoejoe]

i bought in 50,000 units @ 17 cents........rode the highs of the mid 20's

and sold out for 14 cents in july if memory serves me.

i thinking of getting back in perhaps 100,000 units @ 0.089c

reason being this was the price after the biggest increase of 790% that day back in nov/dec.....

seems like a good starting block..............

ud be no better/worse off than if u bought when all the hype stated..

after all......... only 3/250 holes so far........cant be all bad......

even if nothing good is found.. i sure there will be some waves to ride..

 

[GeraldFord]

I have no idea but will take a guess that maybe detrital ore. This ore can range widely in grade but average quite low normally. The ore is easy to extract though reducing costs. Not usually very large quantity but normally found in conjunction with CID.

That was where my mind was heading. Just seems strange that you release disappointing results to the market and then follow it up with a batch of -in the bigger picture- potentially meaningless but equally as off putting results. Id be inclined to roll the dice again on some more Area E CID deposits and hope that your luck is better the second time (P% does appear to vary a bit in that area)

Speaking of which, anyone seen the second round of these weekly updates yet?

Oh. NB..... I hold FMS (and formerly FMSOA)

 

[Mikey26]

Whats going on with Flinders today? Markets up almost 4% but Flinders hasnt moved a bit, in fact its even dropped a few times.

I can understand the financials are dominating but there has been no movement whatsoever.

Hopefully things change in the next couple hours.

NB: I hold FMS shares

 

[Broadside]

expect a retraction of the page 21 graph, very misleading, I don't expect some of the other IO stocks named would be impressed.

For starters FMS resource isn't inferred yet, it's only a target and they are comparing it to inferred resources. BRM resource is only its DSO but their total resource is much greater, etc etc.

If this is a broker presentation it probably did more harm than good.