RWD - Reward Minerals

[pattyp]

G'Day Kenny,

It’s all speculation - But my business case works best if I do a 20/80 CAPEX split... Minimal dilution and manageable debt that can be paid over 8yrs.

So I assume CAPEX at $150m...

20,000,000 x 150c = $30m + $120,00,000 Debt. = $150,000,000.

They may have to do a second cap. raising later if they choose less debt option. But this is less optimal in my opinion (Or shareholder p-o-v).

Shaw say $80m at 120... That means RWD has to issue 67m extra shares. The less dilution we get, the better obviously.

Here is the latest revision of my DCF:

-------------------------------------
-= 10yr DCF =-
-------------------------------------
Prod. Ramp (200x2yr, 300x3yr, 400x5yr)
Avg Price per ton $500
Avg Cost per ton $220
CAPEX 150m (20% eq / 80% De)
Debt Paid off in 8yrs (Avg $18m p/yr)
95m Shares w/future full dilution
EBT Avg: $73m p/yr
Free Cash Flow Avg: $50m p/yr

Fair Value: MC $683,142,955, SP $7.22, f-PE 9

NPV 10%: MCap $315,792,140.09, SP $3.34, f-PE 4

And maybe Avg 30c p/yr dividend if we are lucky
-------------------------------------

I have attached an extract from Shaws for comparison sake:
http://www.rewardminerals.com/index.php?option=com_remository&Itemid=3&func=startdown&id=109

Notable Difference is I ramp to 400ktpa, Shaw only ramp to 200ktpa.

Cheers,
Pat

 

[pattyp]

The bollingers (So far) have indicated the max extensions near perfectly.

Volume continues to be very week... RSI also displays clear weakness.

Pay attention to the Elliott Wave patten... Its playing out like a script! I think RWD needs to bounce up again(4), fall down again(5) and then a possible new uptrend.

And when u think about timing... AGM followed shortly by Cap. Raising announcement... The Elliot Wave will fit nicely.

 

[kenny]

Thanks Pat. I appreciate both the FA and TA replies.

I think the somewhat low number of shares would make it rather tempting for the management to control debt and go the path of a rights issue etc.

Any debt will hopefully be knocked down by the anticipated cashflow so divvy's might be a while coming.

I agree with you in saying the significant difference in calcs to Shaw is the ramp up. Doesn't it give the val a real kicker in the last couple of years?

I need to bone up on Elliot wave analysis but I follow the logic regarding the AGM vote and subsequent announcements. I was thinking this was one of the factors causing the low trading volume.

Regards,

Kenny

 

[pattyp]

I think the somewhat low number of shares would make it rather tempting for the management to control debt and go the path of a rights issue etc.

Cheers Kenny,

And this is possible... But I think about what a 50%-60% increase in stock may do to the share price... I'd say it will halve the value of my shares. And not just my Shares... Our "Dr Michael Ruane PhD" shares... Decisions in this Coy are being made by a serious share holder... Very good news!

They will have to be extremely strategic in the way they build capital... This 20mil issue right now will only raise a small part of the required funds and yet it will dilute our stock by 30%... To make CAPEX through Raisings it will hurt us more then help... Well, thats what I think anyway

Lake Disapointment at 400ktpa is excellent... Imagine if a couple of their other highly prospecive sites show up some goods...?

Just my opinion, no expert, no recommendation... DYOR, etc

Pat

 

[tech/a]

Bruce.

Dont like your wave count--as good as my Funny mentals.

Think this wave 4 is still in progress and not yet complete.
If the low is taken out and this becomes a 5 wave correction and not a 3 then this will languish for sometime.

 

[pattyp]

tech!

Don't like your colors LoL!

Count fits nice, I like it... 2-3 as Extended Wave... Interesting.

IMO - 4 Unlikely to break 150c.

Wave 4-5 should take the price to 250c. This Wave Count is a better fit for my funny-mental price targets

Quote: "If the low is taken out and this becomes a 5 wave correction and not a 3 then this will languish for sometime."

Funny-mentals, being timing of pending announcements, would indicate a 3-wave correction, not 5-wave...

Though if the outcomes are not favourable... 5 likely!

We'll see...

 

[kenny]

G'day Pat & tech,

I'm trying to find something to explain the significance between a "5 wave correction" and a "3 wave" version.

Today's action is reinforcing the notion of a corrective phase and a general cooling off of the sector. MAK is feeling the pain certainly. Both are relatively illiquid and there's probably been a drift of funds to whatever sector is "hot" (like coal for instance) by short term players.

Unless I've missed something, there has been no change to fundamentals but I am finding it hard to buy back in today (which must explain the "N00b" sign on my forehead).

Watching with interest and guessing at a support.

Cheers,

Kenny

 

[pattyp]

Kenny,

RWD and XJO TA Looks sick...

RWD FA remains same, but improves everyday because we get closer to production. AGM Friday...

Will do RWD chart later tonight.

Pat

 

[kenny]

Hi Pat,

I guess we'll be seeing how resilient the support is for RWD in the face of a sick XJO. Anyone here planning to go to the AGM?

Regards,

Kenny

 

[tech/a]

Bruce.

Heavens above its actually doing as I expected .

You still got that knife?
You going to catch another?

You know you'd be expecting price to RISE in anticipation of a good AGM wouldnt you?
Ever thought the fall in price maybe related to anticipation of the AGM?

Holding for announcements.
Risssskky business.

Trade the market.

 

[pattyp]

tech,

Holding for announcements...? Don't think so... Holding for Production...

No buys here - I already bought here... Next Buy is 140s... Sticking to the plan.

And being a day trader - You may have noticed that most of the market was down today... And probably again tomorrow. And the few days before...

Have never told you that u r wrong, not sure why u keep acting like I have...? Have agreed with you 90% of the time... Even re-charted based on your opinion.

I'm meeting you on TA level - Maybe you should take what I have given and have a read about the PotAsh Market in Aus. and look at RWD as more then a share price picture...?

I don't trade the market - I invest in business.

 

[tech/a]

Bruce.

I have no doubt your take on RWD from a fundamental view is compelling,infact have read a lot with interest here.

We both have different styles. I'm short term rather than day.--Currently.
Techtrader long term system is still running but I havent traded longterm for 12 mths.

Just having a dig adds some interest to a boring thread of various analysis.
No personal attack meant!

 

[pattyp]

Bruce.

I have no doubt your take on RWD from a fundamental view is compelling,infact have read a lot with interest here.

We both have different styles. I'm short term rather than day.--Currently.
Techtrader long term system is still running but I havent traded longterm for 12 mths.

Just having a dig adds some interest to a boring thread of various analysis.
No personal attack meant!

Understood - And digs are ok... In 12-months I'm sure I'll have a DIG also... Maybe... We'll see

Just starting to feel like there is no "Respect"... I hang about on these forums so that I can bounce ideas off people like yourself... "Alternative" style traders. But I don't hang "Sh_t" on you about it... Just want you respect my technique for investing (not day trading).

Cheers!

 

[adamim1]

everything was down yesterday, I just relate RWD following the market. Its not like it hasn't been here recently... it was only @ 1.55 about 2 or so weeks ago.

 

[pattyp]

Getting nervous... Time is running out... We are reaching - IMO - a very critical area on the chart...

My LT MAs are close to a dead-cross... Last few times they crossed (Dec07, Feb08) it was prolonged trend as the outcome... If this happens, Knife Catching may go on hold.

One might call todays candle a bullish-harami... Not perfect. Maybe a bounce...? Maybe fall another 10%...? It is VERY oversold now...

Seems that MAK and RWD are following each others tails all the way up and down.

AGM tomorrow...

Pat

 

[Adam A]

Announcement out ,reads well

Sorry still havent learnt how to post link,(this weekend for sure )

 

[pattyp]

Bullish Harami confirmed - Although on pathetic volume...

Needs to break my down-trend ASAP... This week should be very interesting.

Chart still looks evil... Won’t go into details... Don't want to scare anyone LoL!

All in all - Chart is sick, but by my expectations this week the fundamentals should take over the price action... If not... We’ll suffer longer us mere peons!

Pat

 

[adamim1]

Looks like shes on her way back up. $1.785 was the last price - up 7.5%.

Looks like a good sign.

 

[pattyp]

Don't like todays candle...

IMO - Two possible scenarios from here...

Down or Up... Thats (Always) the BIG question isn't it... LoL!

Pat

 

[gfresh]

I think general attention on the agri sector, and fundamentals may just carry it through from much further falls..

This table says it all with regard to potash..

http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=54076&sn=Detail

To be honest, I'm a little surprised RWD is not priced much much higher presently, being one of the supposedly largest untapped Potash sources in Australia - and no other potash producers here. You have something that is in large worldwide demand, cost to produce, and even get into production is much lower than many forms of traditional mining, NO local producers (as compared to iron ore, coal, etc where there are deposits a-plenty), and yet RWD doesn't get ranked? market is strange sometimes.

Mining is also not far off production (2010 or so) by their own estimates. I remember reading there are a few potential sources out there worldwide, but getting them into production can take several years.

Stocks such as STB (tenement right next door to RWD's lake disappointmnets) running 33% during May, whereas Reward actually dropped 20% in this period.