Australian (ASX) Stock Market Forum

RWD - Reward Minerals

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Tourist said:
I read that the native title decision will be made this month re: access to Lake Dissapointment, so I guess no doubt that'll influence the price for RWD. Wait and see..
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I can not imagine the traditional owners not allowing mining in the end. They've just initially gone too far in demand for their beer and birdswood money. I think they will see the rationality of gazillions of royalties for doing nothing during the arbitration and RWD will be able to develop quite a little money spinner.
 
I believe we have a breakout!!! up 39%

wish I had some of these! oh well at least I have it as my pick in this months stock tipping comp. running on the last day - classic
 
kennas said:
They've just initially gone too far in demand for their beer and birdswood money.
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lol Kenna thats mean :p:

RWD do look very very interesting, especially since they seem more advanced than MAK in terms of their Potash projects,

Its amazing, these potash companies seem to be the next big thing, after all everyones gotta eat right?
 
MAK don't have any potash, they have phosphate, and it has minimal capital expenditure and infrastructure development.

RWD have probably a bit more to do, but they still have stunning potential for spinning off cash.
 
YOUNG_TRADER said:
lol Kenna thats mean :p:

RWD do look very very interesting,
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Was a pretty good bet I reckon. Now looks to be pushing on after a breakout a couple of days ago. MAK running away, again, as well. :)
 

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Hey thanks sigmadelta for clearing up my misunderstanding

RWD trading at highs now and yeah noticed good old MAK running hard to, go the poo (fertilizer) brigade
 
Great ann from RWD, price of PooTash is up strong


Great Salt Lake Minerals Corp (GSL) a subsidiary of Compass Minerals (USA) has announced an average price rise of USD $72 per short ton for it’s range of Sulfate of Potash (SOP) products. Compass Minerals announced – quote
“The list price for standard non granulated SOP will now be USD$ 658 per short ton ex works and the granulated SOP price will be USD $670 per ton from April 14, 2008.”
The Compass Minerals announcement follows a March 27, 2008 release advising that the Canadian Potash group Canpotex has recently settled contracts for the sale of 1,325,000 metre tonnes of Muriate of Potash (MOP – Potassium Chloride) to Indian distributor IPL at a price of USD $625 per metric tonne representing a price increase of 76% from the previous year.
Such increases are significant to Reward Minerals in the context of accelerating the Potash production of SOP from it’s Lake Disappointment resource. Recent agreement reached with Martu Traditional owners regarding development of the project should greatly assist in achieving this objective.
Retail prices in Australia for SOP and MOP prior to the abovementioned increases were ca $825 and $630 per metric tonne respectively. The Company is aiming at an initial output of 200,000 tpa of SOP from Lake Disappointment.
M RUANE
Director
 
Hi Kennas

Since you seem to hold both rwd and mak....which would you consider the better buy? I'm thinking of recycling some mak profits into rwd before it gets away too far...smaller market cap...less shares.....what sort of timeline does rwd have i wonder?
 
Hey Evan,

I know RWD have been working on thier potash project since 2006 and have a JORC and PFS figures etc etc, so in that way they are quite advanced,

Thye basically calculated that the CAP EX would be $120m (probably $150m now given rising costs)

But Net Profit was going to be $26m a year with a mine life of over 100years, ie $26m NET PROFIT for 100 Years, and that was using the old lower Potash price

Who knows what it would be now

I have attached the summary calcs the company had,

Enjoy
 

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MAK, IPL, RWD - any more potash/phosphate producers/miners in australia or something that has a connection to fertilizers?

check CF, MOS, POT on the NYSE market, they did a nice little run aswell :)
 
Working backwards using Young Traders figures, the potash price it is based on works out to $448 per ton. If we rework the figures using a price of $850 per ton we get a gross profit of $117m (net $82m).

Remember that they want to scale up to 400,000 tpa and you can see that the net could get up around $160m.

That would be more than $2 per share per year based on the currently issued shares.
 
OxfordBull said:
Working backwards using Young Traders figures, the potash price it is based on works out to $448 per ton. If we rework the figures using a price of $850 per ton we get a gross profit of $117m (net $82m).

Remember that they want to scale up to 400,000 tpa and you can see that the net could get up around $160m.

That would be more than $2 per share per year based on the currently issued shares.
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$2 a share profit a year????? Crazy, that means its on a Price to Profit ratio of less than 1,

I think it will take a serious Insto/Company/Investor to get behind RWD and then it will push up hard, especially since the registry is so tight!

Go the POO Brigade, charge!!!!!!
 
The numbers of RWD are pretty stunning when studied aren't they..

Possible 200eps profit = several times current price as a given.

Native title sorted it seems. The question is how soon can they get mining operations up and working? Lake Disappointment pilot plant should be up and running towards the end of this year/start of next.

As potash is pretty specialised, not like there are 50 potential potash miners out there. POT on the NYSE gives some idea of what the current demand for Potash is doing for producers.. $55 to over $160 in 12 months.. It's trading on a p/e of 50 mind you.

http://finance.yahoo.com/q/bc?s=POT
 
Hey guys,

Here's a very interesting post off another forum comparing Potash and Potassium operations, interesting I for one had no idea

"let me share a few things I've learned about potash vs. phosphate by trading ag stocks in Canada long before Aussie investors knew the difference between potash and kitty litter.

Potash is an oligopoly controlled by a few major players that control prices through natural supply constraint. Other than RWD and maybe one or two others, there will be no new supply players coming on the market for the next 5-6 years. (the time it takes to build a greenfield deep shaft mine).
Phosphate, on the other hand is mined all over the world and not suitable for a Debeers like monopoly. Did you know there are dozens of phosphate mines in the US that were shut down during the last price drop, and are probably being recommissioned as we speak? Do you know how many Potash mines are being recommisioned? To my knowledge zero."
 
Now i am getting confused ADY have a project up and running which they switch names for all through their web site between potassium and potash-for them it appears it means the same thing.Estimate of their resource:

2) Potash Reserves, expressed as KCl, after 70% recovery;

Low Expected High Uncertainty of the estimate
Million tonnes
Proved Reserves 27.1 33.0 ±1.9 39.5 ±10%
Probable Reserves 10.5 17.8 ±2.6 27.4 ±24%
Total Reserves 37.5 50.8 ±4.5 67.0 ±15%

my understanding is they are producing and now selling

All i want to do is buy and sell shares not be a geo,mining expert etc
this is getting harder all the time !:eek:
 
countryboy said:
Now i am getting confused ADY have a project up and running which they switch names for all through their web site between potassium and potash-for them it appears it means the same thing.Estimate of their resource:

2) Potash Reserves, expressed as KCl, after 70% recovery;

Low Expected High Uncertainty of the estimate
Million tonnes
Proved Reserves 27.1 33.0±1.9 39.5 ±10%
Probable Reserves 10.5 17.8±2.6 27.4 ±24%
Total Reserves 37.5 50.8±4.5 67.0 ±15%

my understanding is they are producing and now selling

All i want to do is buy and sell shares not be a geo,mining expert etc
this is getting harder all the time !:eek:
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Hey Country dude

If you search Potash under Wiki it states:

"The term has become somewhat ambiguous due to the substitution in fertilizers of cheaper potassium salts, such as potassium chloride (KCl) or potassium oxide (K2O)[1], to which the same common name is now sometimes also applied. "

Now looking at ADY website:
http://www.ady.com.au/pdf/pdf7_050727_rincon_salar_JORC_estimate.pdf
It states ADY has "Potassium chloride which is KCI" reserves it does not state Sulphate of Potash K2SO4 which is what RWD has, refer to YT on why this is relevant.

However ADY main aim is to drill out Lithium where KCI is a by product. In other words ADY gets KCI for free... so its an extra bonus for ADY. You would look to buy ADY shares if u like Iron Ore and Lithium not for their KCI.

Please correct me if I am wrong.. I hate chemistry
 
The numbers are indeed stunning. But I would caution that there will almost certainly be another round of capital raising before Reward can become a producer. Depending on how much the institutions are willing to stump up and how much the banks are willing to lend in this new age of risk averse markets, we will face some dilution of our current shareholdings.

Even so, if we speculate that they might issue another 70 million shares at around $1.20 and borrow $40m to fund the development we would still be looking at 50 cents per share net profit initially and $1 when production ramps up.

I just hope that if new shares are issued at a discount that they will look after the small shareholders too.
 
Thinking further - $2.00eps would be on the 400ktpa figure - so probably fair to assume these figures won't be reached until at least 2012, if not later. So a while off IMO.

As Oxfordbull states, we do need to consider how the development costs will be funded, and dilute accordingly.

In their presentation, the figures include an amortisation+interest cost on each tonne produced for $60M (payback 3 years). This leaves approx 50% of estimated CAPEX of $120M, to be funded, more than likely via equity. If they do a placement at say $1.50 (I am hopeful by the time the issue needs to be done the price would have moved further from here :)) .. 40M shares to be issued. This would give approx 107M fully diluted shares for RWD.

Going on the 200ktpa to begin with, at least $825/tonne price:

Total costs/tonne = $263.. $562/tonne profit x 200,000 = $112.4M EBT
NPAT: 0.7 x $112M = $78.68M / 107M = $0.735eps

Oxford's $0.50eps seem fair so pick a figure somewhere around there. Still, this gives multiple upside from current price.

Of course, we are all going on a May 07 presentation (p.21), things have changed a bit since then - so final eps are speculative at best.

It would be good to have an updated estimate from them, maybe we will have to wait until a BFS (after the trial?)
 
Hmmm broken out (sorta) to new highs,

I saw RWD was on the Opes list, I get the feeling that the selling from Opes has probably been whats holding this stock back

Still chart gives the impression that it wants to go higher (I think)
 
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