RMI - Resource Mining Corporation

[moneymajix]

Yes. Up over 26% today.

It has been pumped before.

As news seems to be due farily soon, I am hoping that it is a good ann. which is moving the share price.

LOL to all holders especially the longer term ones.

 

[YOUNG_TRADER]

After taking profits on YML yesterday and a few CUL today I finally bought a proper position in RMI today, I paid up to buying the bulk of my position at 7.4c-7.5c, I know I should have waited but when 2m is on the sell I take it,

I have watched this stock and traded it on and off for 9- 12months,

However I believe that the upcoming assays due from Wowo will cause a re-rating of this stock,

Anyway I will post up some detailed research soon, although Prawn hs already done some excellent analysis on the company and in part his research is what caused me to jump into RMI so soon

 

[Snakey]

After taking profits on YML yesterday and a few CUL today I finally bought a proper position in RMI today, I paid up to buying the bulk of my position at 7.4c-7.5c, I know I should have waited but when 2m is on the sell I take it,

I have watched this stock and traded it on and off for 9- 12months,

However I believe that the upcoming assays due from Wowo will cause a re-rating of this stock,

Anyway I will post up some detailed research soon, although Prawn hs already done some excellent analysis on the company and in part his research is what caused me to jump into RMI so soon

Nice to know that a stock im holding has the yt stamp of approval
That should help the price a bit

 

[YOUNG_TRADER]

Well looking at the chart I really wish I had bought some yesterday or the day before or any day before, lol I really paid up at 7.5c but well at least I got my fill there as I'd be paying up even more now,

To begin with I recommend that everyone take a visit to the Res Min web page and read the latest report by Patersons

http://www.resmin.com.au/Investor-Centre/Broker-Research-and-Presentations.aspx

Stock has run hard today, so if your thinking of buying, I'd say at the very least take a look at the charts, the way it trades etc etc and then decide, traders may exit tomorrow who knows, just please please don't rush and buy because I am posting on it.

I will do a full write up soon, I really see a re-rating once Wowo assays are back and have alot more confidence in the Wowo project after doing some detailed research on it via PNG archives etc etc

 

[YOUNG_TRADER]

Guys sorry it took me so long to get this done, but have been trying to trade while researching/typing etc etc

RMI​

Mkt Structure

Shares
430m
Mkt Cap @ 7c = $30m Current
Mkt Cap @ 15c = $65m Target 1
Mkt Cap @ 20c = $86m Target 2

TOP 20 = 52%
Substantial Shareholders
Sinom (Hong Kon Stell/Iron ore Insto Group) 13.4%
ANZ 8.4%
Mount Gibson Iron MGX 7.4%


Cash
$2m not alot so will obviously need more down the track


Projects



Wowo Gap Nickel, 100%, PNG
120mT@1.2%Ni + 0.1%Co = 1.7%Ni Equiv

Note that my research on Wowo Gap has found that based on all the historical work, the PNG government is confident to quote a JORC of
300Mt@1.6%Ni Equiv

Valuation
As its a laterite Project I'd say once the JORC is firmed up a $1000/t EV is appropriate (Note Spot $35k - $50k/t)

For now until we recieve assays and confirmation of the mineralisation I will use $100/t Ni EV

120Mt@1.7%Ni Equiv = 2Mt+ Ni @ $100 = $200m = 47c RMI

Now the mian points are
1. Although the current JORC has a low confidence level, detailed research of PNG databases has revealed a JORC of 300Mt@1.6%Ni Equiv is being quoted, so there is plenty of upside to the jorc, this in turn has greatly increased my confidence in the project.

2. Given the huge technical and infrastructure costs, a JV with a major is a must! = Farming out/down of interest, but see HIG, they sold a majority stake in Ramu (145Mt@1.5%Ni Equiv) to the Chinese so a JV partner shouldn't be a problem


Blackstone/Michael Hills Ni/Cu/PGE/PGM, 25% Free Carried by RDS, Musgrave Province W.A.
The project is 30Km's away from WMC's Babel and Nebo Nickel Sulphide deposits,

While its early stages, Patersons are highly encouraged by the work so far and belive that RDS/RMI are onto something quite promising here

Valuation
I like Patersons fully agree that the bulk of RDS's current mkt cap is attributable to these projects,
Hence a comparative valuation can be made

RDS 90m shares @ $1.40 = $26m for 75% Interest

Thus RMI's 25% Interst is worth $42m = 9-10c approx RMI


Argyle Iron, 75%, W.A. near Wyndham
JORC 17Mt@55%Fe

Unfortuantely this deposit is somewhat stranded and RMI will need to show a clearer path to development before I will value it properly,

However apparantly their has been strong Chinese interest in a potential JV, once one appears I will re value this project

Valuation
As stated, due to development uncertainty the project only deserves an EV of $2.50/t vs $5/t I was happy to use for CUL's

17Mt@55%Fe = 9.35Mt, 75% Interest = Net 7Mt's Fe
7Mt's Fe @ $2.50/t = $17.5m = 4c RMI

If a chinese JV or clearer path to development appears I will be happy to use $5/t = 8c RMI




Qld 3 Rivers Ni/Cu, 10% Free Carried by SRL, Greenvale Qld
SRL should have drilled 3 deep holes to test for NI/Cu sulphides, not sure where this project is at



Summary

- WOWO could be a company making project, remember JRV's run? 400% in a month based on its huge laterite Nickel Project
- The RDS JV underwrites/implies an SP of 9c-10c
- The Argyle Iron Ore Project adds 4c in spec value (8c once I see JV etc)


Total Value I see pre Wowo Gap rerating = 23c
After more confidence in Wowo = 40c+

 

[ideaforlife]

Just small piece of information. One of the directors Zhang Chi is the founder of Sinom (the largest shareholder so far).

 

[kromey]

Hi YT do you see better value in RMI or CUL? They both are interesting i posted on the 26th June on HC for opinions. Cheers in advance.

 

[skiper]

Well looking at the chart I really wish I had bought some yesterday or the day before or any day before, lol I really paid up at 7.5c but well at least I got my fill there as I'd be paying up even more now,

To begin with I recommend that everyone take a visit to the Res Min web page and read the latest report by Patersons

http://www.resmin.com.au/Investor-Centre/Broker-Research-and-Presentations.aspx

Stock has run hard today, so if your thinking of buying, I'd say at the very least take a look at the charts, the way it trades etc etc and then decide, traders may exit tomorrow who knows, just please please don't rush and buy because I am posting on it.

I will do a full write up soon, I really see a re-rating once Wowo assays are back and have alot more confidence in the Wowo project after doing some detailed research on it via PNG archives etc etc

Nice YT, Nice, thanks for your input yet again, interesting day tomorrow, especially the open i would have thought.

Cheers

 

[prawn_86]

funny how the market reacts to YT's research and not mine lol. the only ppl who listen to me are my dad and a friend.

but seriously it is good to see what has happened today and hopefully with the upcoming ann it sustains the current price, although i wouldnt be suprised to see a bit of a drop in the next couple days to around 8c maybe.

just my opinion

 

[mobcat]

Guys this ones a nice package hey with a great balance of spec to give it a edge always a positive IMO for a good earner .

i tried to ring my brother tonight he,s a pilot in PNG but hes working with the fuzzies and will get back to me with the local goss on RMI,s play he,s up to his lips in FNT with me and after todays info and movement i went in hard on RMI had a dabble in march with it and picked up a few but today i jumped into it with the movement and YT,s reco was lucky enough to pick up a large parcel @ 7.5 av so i am nicely positioned ATM cant wait for the opening could be a nice one to watch all the signs are their up 36% on 56 mil vol count me in for the long haul in the 30,s is my target good luck all

 

[spottygoose]

funny how the market reacts to YT's research and not mine lol. the only ppl who listen to me are my dad and a friend.

but seriously it is good to see what has happened today and hopefully with the upcoming ann it sustains the current price, although i wouldnt be suprised to see a bit of a drop in the next couple days to around 8c maybe.

just my opinion

Aww Prawn I read your research and you did a great job in bringing it to our attention. YT's the man of the moment ... but even he has acknowledged the job you did here. So well done and thank you Mr Prawn!

 

[prawn_86]

lol thanks goose.

im not complaining. YT has am uch better track record than me, hell i'd probably listen to him over me!

its just good to see my research being justified

happy investing/trading

 

[mobcat]

Yeah good stuff prawn job well done both you and yt i waved this one on before you guys pointed out the fundies i will look at a prawn a lot diffrently from now on before i shove it in my gob or on the barbie LOL thanks again guys good fortune for all holders

 

[cuttlefish]

looked at RMI a while back as well. The nickel resource is massive but it is laterite and its in the middle of nowhere from memory. To develop it will likely cost billions just on location alone (infrastructure to get the ore to the coast over/through mountains etc. Building a port/terminal to load the ore or concentrate onto ships, power supply needs to come from somewhere etc. Then on top of that its a laterite deposit and a lot of it low grade. Laterite is difficult to process, requires leaching etc. its not sulphides - recovery rates are lower. All this means it will be a very long time and a lot of dollars/dilution via either capital raisings or joint ventures before anyone's producing nickel from wowo. Add to that questionable management and potential political issues from PNG govt - though precedent has been set with the other project being approved. I do recall at the time thinking that the iron ore project was more likely to be a source of value for this stock than the nickel project.

That being said, $50 billion in-ground nickel value has a speculative attraction about it and I'm sure big figures like that will have plenty jumping on board. But if you're looking at a real return its a long way off, and who know's what nickel prices will be looking like by then.

Not wanting to throw water on anyone's fire but this is true spec I would have thought (again except potentially for the iron ore - though I think grades are at the lower end of what would be desirable for iron ore, and I don't know if any metallurgy has been done etc. so thats also a long way from being anything concrete).

There's other significant Ni Laterite deposits around, including in Australia near infrastructure, that are far more likely to be developed in the near term than wowo I would have thought.

 

[Tiberium]

Valuation
As its a laterite Project I'd say once the JORC is firmed up a $1000/t EV is appropriate (Note Spot $35k - $50k/t)

For now until we recieve assays and confirmation of the mineralisation I will use $100/t Ni EV

120Mt@1.7%Ni Equiv = 2Mt+ Ni @ $100 = $200m = 47c RMI

Hi YT,
Could you please explain a bit more on how did you get $1000/t or $100/t Ni EV from? How did you calculate it?
Thanking you in advance.
Best Regards,
Tiberium

 

[YOUNG_TRADER]

Most Nickel Sulphide miners/producers/soon to be producers trade on an EV of $10,000 /t, for RMI = $20 Billion

But RMI is not a sulphide play its a laterite play,

As such I think due to the inherent technological and processing risks, 10% EV of what the sulphides get is appropriate


But @ 10% that would still = $2 Billion to RMI

And given their is a low confidence in the JORC etc (even though the PNG Gov't quote a JORC 2.5x the size that RMI are, and like MGO its based on historical so we know its there, ie the ore didn't just get up and walk away, its not really that low confidence) but for arguments sake lets say 10% confidence in the JORC and 10% confidence in the development options,

IE applying only a 1% EV value to Wowo as it stands = $200m = 46.5c RMI

So as you can see Wowo is the real company making project!

But as Patersons said in their report, paying up to 9c for RMI only values its RDS JV and gives 0 value to Argyle or Wowo Gap project!

Note report is found on web page here http://www.resmin.com.au/Investor-Ce...entations.aspx

 

[cuttlefish]

metallical minerals has over 200,000 tonnes of contained Ni laterite in a low grade deposit in QLD near infrastructure - they're doing metallurgical testing at the moment. Extraction target is 60-80% extraction rate after 4 to 9 months heap leaching utilising 300-500 kg acid per tonne. Its an expensive and time consuming process.

There are other Australian base Ni laterite deposits larger and of higher grade than MLM's as well (in smaller capped companies than MLM or RMI).

 

[prawn_86]

cuttlefish, problems with laterite mines are one of the disadvantages i listed in my initial analysis.

admittedly i dont know too much about them, all i know is that they cost a heap and are difficult to get going.

however, i generally dont hold stocks like to see them come into production. i would rather hold for the medium term and once what i believe a good value has been reached to move to something else. FNT is an example, as it is many years and problems away from mining but still offers good potential for the shareholders to make money.

but thankyou for pointing out what is probably RMI's biggest problem if they were to ever start mining

 

[YOUNG_TRADER]

Hey Prawn,

Forgot to say thanks, as I said, I have been watching and trading in and out of RMI for ages, but I never really committed to a proper position, however your research prompted me to take another look as RMI was one I always wanted to have a proper position in as well,

After reading the Pato's report I realised that regardless of Wowo, RMI should trade at minimum 10c,

9c based on RDS JV and 4c based on Argyle, 10c-13c

So really buying RMI below 9c say was really a no brainer and haveing taken some profits on YML and CUL the other day I decided it was time to get set with RMI, unfortunately I hesitated with buying up and had to eventually pay up to 7.5C but Long Term it doesn't bother me and I even grabbed a few more today,

Cuttle Fish hence why I used a 1% of potential EV of Wowo and not 5% or 10%, I think 1% seems reasonable.

In any event right now its getting attributed 0% value

 

[YOUNG_TRADER]

Well it was good to see RMI close at days high of 9.2c,

Volume today was 40m, compared with 50m yesterday, but given the higher price the $ that changed hands was probably greater today,

Certainly has confirmed its breakout ie not another pump and dump and given the buy depth and charts I'd say 8c seems like support,

What do others reckon?