RMI - Resource Mining Corporation

[mobcat]

Yeah sure was nice to watch today guys some serious off screen plays went through 7 mil at 3oclock give or take a mil tomorrow is our day i hope bang the volume up and run for ten thats the hurdle at this stage imo if we can break it tomorrow and then find a perch to sit i will be a very happy camper the sentiment pre wowo is a mystery and joy to behold if it swings our way on no ann we can be in for some fun.

I spoke to my brother today in PNG and he's going to check it out for us he's heard info on it but cant really remember he was saying FNT is hot in PNG atm with the locals and some of the rumours are huge as per usual with PNG good stuff hey............................. sorting the ship from the clay over their is a art.
I am actually heading over to PNG in August for a fishing trip and booze up with the groovers over there great fun to be had in a crazy part of the world hope i come back full of goss because i will be asking the questions we all want answered, and flying around PNG with my brother you sure get some good answers anyway good luck all and i hope tomorrow brings what we all want $$$$$$

 

[prawn_86]

any techies out there wanna share their thoughts?

closing on a high 2 days in a row is a good thing right?

thanks in advance

 

[nomore4s]

any techies out there wanna share their thoughts?

closing on a high 2 days in a row is a good thing right?

thanks in advance

Prawn

T/A wise it looks very, very good. Broke out of a trading range in May, consolidated for a couple of months in an acsending triangle before breaking out very strongly with massive volume. The closes on the high with such large range bars is very positive - demand looking for supply and willing to pay for it too.
I would trade this purely off the chart thats how good it looks, pity I didn't see this earlier.

It may pull back a little or consoildate for a while at the current level but with the massive vol of the last 2 days it could just keep running, although I imagine that 10c will provide a bit of resistance.

Good spot Prawn well done.

Good luck to holders.

 

[jtb]

Yeah sure was nice to watch today guys some serious off screen plays went through 7 mil at 3oclock give or take a mil

Very very few orders were for more than 100K shares either yesterday or today .
0.075 was the exception yesterday with an average vol' of about double that.

The volume weighted avg however is up a cent over yesterday (0.087 : 0.078) which shows the buyers are chasing the sellers.

Not in , just watching

 

[YOUNG_TRADER]

I used todays weakness to buy up another 1m shares,

For now company looks to be in a stale mate but the buyers appear to be gathering between 8c-8.4c

I don't get why people buy like that, me if I see a sell big enough to fill my desired buy I come offscreen and take it, I guess these people are just hoping a reall really big seller comes along,

If CUL was anything to go by, we can expect a bit of consolidation which is good before an eventual push up towards 10c,

As I have already said, I see buying below 9c as low risk given that the JV with RDS implies this as a minimum, So rigth now Argyle and Wowo are free

 

[YOUNG_TRADER]

Heres some of the info I used in doing my research

See here http://www.pecc.org/community/minerals-shanxi-2005/papers/howard-lole(paper).pdf

WOWO GAP (NICKEL LATERITE)
LOCATION: Wowo, Oro Province
OPERATOR: Niugini Nickels Ltd.
OWNERSHIP: Niugini Nickels Ltd 100%
STATUS: EL 1165 (94.4km²),
YEAR GRANTED: 1996
BACKGROUND
The Wowo Gap Project is huge laterite deposit with a potential for a global resource of in access of 300 Mt of lateritic and saprolitic ore that has developed over a peridotite breccia. There is lot of potential outside the current project area as well. Within the project area previous exploration of Wowo Gap laterite nickel deposit has outlined a resource of 62 Mt @1.8% Ni equivalent
The project area under exploration licence (EL1165) granted to Niugni Nickels in 1996 was first discovered in 1958. Several exploration companies had explored it since and a prefeasiility was carried out in 1972 found the deposit uneconomic. The metallurgy, stripping characteristics and location of Wowo Gap compares favourably with other lateric nickel deposits. Further drilling and pitting are required to bring the project to the feasibility study stage.
The Wowo Gap Project is located about 200 kilometres east of Port Moresby, and 35 kilometres from the towns of Safia, near the Musa River and Wanigela, situated on Collingwood Bay. The deposit is located at the eastern end of the Didana Range in a topographic saddle some 700 meters above sea level. The area is drained by the Musa River and its various tributaries, the largest of which is Bereruma Creek which flows north from the deposit.
CURRENT STATUS
Since the granting of the Licence Niugini Nickel NL has undertaken review of past data and there were periods of low activity corresponding to low commodity price and the asian economic crisis. The drilling completed in 2003 was only within the laterite developed on the foliated ultramafic. Drilling of the Sivai Breccia was completed in 2004. Soil and young volcanic ash overlies limonite- and saprolite-laterite profiles.
The limonite profile, 1 to 10 metres, thick consists of clay with iron oxides. Commonly this material in the diamond core contains no boulders. At similar depths in the pits there are small weathered boulders, particularly at the bottom of the profile. It is probable that the diamond bit has pushed the small boulders away in the limonite-clay rich material. Only when the boulders are large enough to resist the downward thrust of the drill stem have they been penetrated.
The saprolite profile, 1 to 15 metres thick, consists of serpentine and garnierite with clay. This material also contains significant sections of boulders. The boulders are interspersed with the saprolite material. This lower section of the profile was previously not seen in the pits or wacker drilling, as this material was too hard to have been previously penetrated
16
Sources of Saprolite include: New Caledonia, Philippines and Indonesia. Saprolite is used as a direct feed for the production of Ferronickel with Ferronickel accounting for approximately 38% of the world’s primary nickel production.
Ferronickel smelters are located throughout the world with significant production centres situated in New Caledonia, Indonesia, and Japan. The latter relies 100% on imported material to satisfy demand, with the three smelters in Japan importing approximately 3.0 Mtpa of Saprolite averaging 2.35% Ni. RMC understands that +2.0% Ni grade Saprolite ore sells for +US$35.00/wmt. RMC has initiated discussions with selected Japanese companies involved in the Saprolite trade to determine interest in Wowo Gap’s role as a potential Saprolite ore source of the future.
Planning is underway for the commencement of a Wacker drilling programme at Awariobo once the Wowo Gap drilling is complete.
WOWO GAP REOURCES
The reported “inferred resource with a0.8% nickel cutt off from pits, previous diamond drilling and wacker drilling is;
Central Zone Limonite 30.9Mt @ 1.09% Ni and 0.11%Co
Saprolite 17.9Mt @ 1.44% Ni and 0.04%Co
Northern Zone Limonite 18.0Mt @ 1.02% Ni and 0.11%Co
Total 66.8Mt @ 1.17% Ni and 0.09%Co
However comparisons of work by Niugini Nickel indicate that limonite profile of limonite were twice as thick and as a result potentially doubles the resource potential of the limonite drilled area.
Limited drilling in the Central Zone indicated that with further drilling there is a potential to conceptually increase the increase significantly from 18Mt, as as no saprolite ore has been factored into this resource. The Ther is significant resource open to the north and south and will be furter teste by continuing the current drilling program across s the Sivai Breccia and immendiately to the north and south.
Comparing the Wowo Gap nickel deposit with the Ramu nickel deposit you can see that the global resource at Ramu is 143 Mt @ 1.01% Nickel and 0.01% cobalt.

 

[YOUNG_TRADER]

And below is an extract of a Map from that report (link above) which shows Wowo's location,

It also compares Wowo to Ramu, which is important as many thought Ramu would not get off the ground due to infrastrucutre requirments etc etc but then the Chinese came along and bought a huge stake in Ramu and guaranteed funding and so began the Ramu development story

 

[KIWIKARLOS]

Well certainly looks like they have potential. Their reserves appear to be potentially much larger and quite higher in grade. So i take it they need to do alot more drilling to prove up the resource.

The only thing against it is the topography, very steep terrain? Is there any existing infrastructure near by?

 

[cuttlefish]

Another thing I remember about reading about the wowo project is the environmental concerns. I'm no greenie and I know all mining at the end of the day has a pretty serious impact on the environment - but this one sounds like it has the potential to be one of those headlining sort of environmental impacts that affect a region and its population.

Here's an extract about it:
Since 1998, the Ramu Mine has been the subject of considerable controversy in both Papua New Guinea and Australia, in particular due to concerns that its ocean dumping (submarine tailings disposal or STD) operation could adversely affect the ecology of Astrolabe Bay. Local people along the Madang coastline are dependant on the ecological health of the region and the wider Astrolabe Bay, which now supports an extensive tuna fishery. River communities downstream of the mine hold similar concerns over the potential impacts on their resources. For these reasons, the New Guinean National Fisheries Authority wrote in an report that,“The Ramu Nickel Mine Project is an unsustainable project socially, economically, and environmentally; and cannot be allowed to proceed.”(http://www.mpi.org.au/regions/pacific/png/ramu/)

wowo is in a different location to ramu - not sure of the topology of the area or access to deep harbour. Capex estimate for ramu $1 billion. Thats a lot of dilution via JV or capital raising.

 

[cuttlefish]

note the information in the above post is in relation to the Ramu project which was approved earlier last year but is pertinent to wowo as they are both similar size, grade Ni laterite resources in png.

 

[YOUNG_TRADER]

Kiwik, don't think there's much, but then that was the case with Ramu and the Chinese are taking care of it

Cuttlefish, yeah large mining projects always have environmental and I know this sounds bad but thats why I like PNG, you see PNG unlike Australia is heavily and I mean heavily dependent on Mining as a source of Government Revenue and employment, as such they let projects go through that are damaging to the environment etc,

See MGO is also near Ramu and if Ramu had environmental implications, then arguably so to does MGO's, but I have no doubt they'll get their project going regardless of the impact. I mean MGO is partly owned by the PNG Govt Superfunds, get the picture.

The point I'm trying to make is in regards to PNG, very few things stand in the way of mining (apart from Feasibility and Spot Prices)

As I calculated, based on RMI's last JORC Wowo contains 2Mt's of Nickel, if we tak a long term price of $20k AUD/t vs current $40k/t and assume an operating margin of 25% = Operating Cash Flows of $5k/t for 2Mts = $10Billion, so even if Cap Ex was $1Billion you can see the value would be $9Billion

As for financing I THINK THERES IS ABSOLUTELY NO WAY RMI CAN DEVELOP THIS PROJECT ON ITS OWN, NO WAY AT ALL!

But then I'm 90% positive that with a higher confidence in the JORC (ie after drill assays) a major like Xstrata if not the Chinese will JV with RMI,

An ideal outcome would be a 20% Free Carried Interest or something like that

 

[KIWIKARLOS]

Yeah i was actually just looking into another company BOC bouganville copper mine or something which i believe is a sub of rio or BHP or something. Back in 1989 the PNG gov forced them to close the mine becasue of environmental concerns and it actually wiped about 20% of PNGs GDP at the Time!

After Ok tedi and so on i think they still ahve environmental concerns and if you know anything about this ocean dumping of mining waste it actually is nasty stuff! it destroys entire ecosystems. Morally i dont like to support such projects but simply not buying into a company because of that isn't going to effect anything well not with my tiny bank balance anyway

 

[cuttlefish]

kiwi - buying into a company has the effect of supporting or enhancing its price. The higher a companies share price and the better supported the more easily they can raise capital and continue in the direction they're going - so in effect buying shares can have an effect on whether a project goes ahead or not. (in the same way that in theory your vote could cause a change of govt).

To me the wowo project is not so much about the discovery but about the funding and development. Whoever funds it will effectively end up owning it - RMI would get some return for supplying the ground but not much more. Also whoever funds it effectively controls it and can leave RMI (or more significantly its shareholders) in the cold. Examples of ways this happens are just issuing more capital to the JV partner ad infinitum as the project progresses diluting holdings of the minor shareholders.

 

[YOUNG_TRADER]

To me the wowo project is not so much about the discovery but about the funding and development. Whoever funds it will effectively end up owning it - RMI would get some return for supplying the ground but not much more. Also whoever funds it effectively controls it and can leave RMI (or more significantly its shareholders) in the cold. Examples of ways this happens are just issuing more capital to the JV partner ad infinitum as the project progresses diluting holdings of the minor shareholders.

You could arguably say this about any company that JV's its projects to a major, the point I'm making is that acheiving the JV will make the mkt take RMI more seriously, the Mkt Cap at 8c is like $35m, and per my Calcs a 10% Interest in Wowo would be worth at least $500m so the upside is huge, if you don't like the leverage to rewards thats fine, but hey I do and given Wowo is not costing me anything when I buy well then it makes it all the sweeter,

I also found a report done by Warrick Grigor of Fare East Capital on Cobar Resources in 2002 when they owned Wowo Gap

http://www.fareastcapital.com.au/imagesDB\research\CobraFECNovVersion2.pdf

Makes for an interesting read, especially because the Ni Price used was $2.25 per lb

 

[YOUNG_TRADER]

Hey Kiwik, re infrastructre, this is what the report said

"Infrastructure Both Goro and Halmahera projects have similar locations and infrastructure configurations as Wowo Gap."

I'm assuming this implies if they can get going no reason why Wowo can't,
It also makes it a point to to assert

"Resource needs to be expanded to qualify
as a major project: Wowo Gap needs to be more like 100 mt in size and 1.3% Ni to appear attractive. Anything in excess of this, where the ratio of saprolitic ore to limonite remains at approximately 1:2, will add to the likelihood of development."

Now because this was based on a Ni spot price of $2.25/lb vs Current $15/lb maybe this 100Mt threshold can drop, but to be safe I'd think minimum 60Mt's would be needed as a Measured JORC to get thins going, especially since operating and Cap Ex costs have blown out!

Also the report does another very interesting comparison of Nickel Laterite deposits

 

[KIWIKARLOS]

So the 300MT is an inferred resource which needs drilling and assays to "prove" and they already have got about 60MT "proven" ?
I assume that this is their priority at the moment, i haven't had a achance to read the latest activities report yet are they currently in the process of drilling?

I wouldn't anticipate Nickle prices staying so high but even at $10 per lb its still 4 times the value when these previous calcs were done. The Chinese have certainly been flexing their muscles in the south pacific eg. PNG fiji etc too. They have alot of cash to buy up strategic resources and you need nickle to make steel

 

[prawn_86]

I assume that this is their priority at the moment, i haven't had a achance to read the latest activities report yet are they currently in the process of drilling?

check a few pages back in this thread i posted a response from the MD as to what their activities are at the moment

 

[moses]

this is for YT. I doubt if tonight's SMA chart provides a useful indicator for tomorrow, but here it is as requested. Perhaps it suggests some time out for consolidation, but the signal is pretty weak at best.

 

[Sean K]

Long term chart looks very good. Huge rounded bottom that in all probabilities should continue up the other side. Currently short term trending up nicely, with stages of consolidation. This could now consolidate as has been mentioned by others, perhaps within the green circle, and even hit the previous resistance, now support, to the downside which is around 6.4c, but you could expect the upward trend line to be respected, so perhaps 7 cents to the downside more likely. Indicators here look very promising. Historical longer term resistance has been hit, so adds to potential for further consolidation instead of going parabolic in the short term, but I wouldn't discount the YT factor.

(holding)

 

[YOUNG_TRADER]

Hey Kennarico!

I was confused by your chart at first, but then realised that it was a weekly and not daily,

I don't know if this will fall below 7c let alone 8c over the next month,

I looked at how CUL traded, once it launched from its base of 5c and once it borke 6.4c that acted as support,

Well for RMI the base I see is 6c and it broke out at 7.7c/8c so now I see that as support I doubt that it will drop below 7.7c/8c over the next few weeks,

In fact I expect it to consolidate between 8c and 9.5c pre Wowo assays before it makes it push out above 10c,

Thats my call