SDV - SciDev Limited

[zombie_ninja]

Thanks Morgan Bring on the BFS I say once they have a commercial sized plant using the Intec process, they WILL be selling zinc ingots (well at least pure zinc that just has to be melted into an ingot anyway) Of course the BFS does have to conclude that the commercial plant is feasible......

Tony.

So, does anyone know when is the BFS coming out?

 

[imajica]

Informative article on Australian Commodities website - Intec gets a mention


zinc
rohan kendall : rkendall@abare.gov.au

World zinc prices continued their dramatic increase during the December quarter 2006. In early November, spot zinc prices were around US$4500 a tonne (US204c/lb), the highest ever in nominal terms and almost three and a half times the 2005 average price of US$1380 a tonne (US63c/lb). For 2006 as a whole, zinc prices are estimated to have averaged nearly US$3300 a tonne (US149c/lb), 140 per cent higher than in 2005.

The rise in prices during 2006 reflects continued strong demand growth, particularly from China, coupled with relatively low supplies of zinc concentrates. This has led to a sharp decline in zinc stockpiles, which are estimated to total fourteen days of consumption at the end of 2006, only half the already low stocks at the end of 2005.

In 2007, zinc prices are forecast to rise by almost 30 per cent to average around US$4200 a tonne (US192c/lb). Low investment in exploration and mine development in the late 1990s and early 2000s (a time when prices were low) has limited the ability of mining companies to expand supply quickly in the current climate of strong demand and high prices. Consequently, zinc consumption is forecast to exceed production again in 2007, leading to a further drawdown in stocks. Specifically, zinc stocks are forecast to decline by 30 per cent to a critically low ten days of consumption by the end of 2007.



world consumption rising steadily

World zinc consumption is estimated to have risen by 3 per cent to almost 11 million tonnes in 2006 and is forecast to rise by nearly 2 per cent in 2007 to 11.2 million tonnes. While demand is expected to remain robust, particularly in China and India, this is expected to be partially offset by weaker demand in western countries. Around 50 per cent of zinc consumed is in the production of galvanised steel, making zinc consumption highly dependent on developments in the galvanised steel industry.

galvanised steel production in Asia driving zinc consumption

Demand in Asia, which accounts for 53 per cent of the global zinc market, continued to grow during 2006, with consumption increasing by 5 per cent year on year to September. China and India accounted for the majority of this growth, with zinc consumption increasing by 7 per cent and 8 per cent respectively. This growth is being driven by the rapidly expanding galvanised steel industries in China and India which, in turn, reflects strong growth in construction, motor vehicle and household appliance manufacturing.

Industries, such as motor vehicle manufacturing, which use large amounts of galvanised steel, are increasingly being relocated away from north America and Europe to Asia. This shift is occurring as manufacturers seek to take advantage of lower production costs and has led to a significant increase in the production and consumption of galvanised steel in Asia.

As a result of such developments, China surpassed the United States in 2000 to become the world’s largest zinc consumer. As incomes continue to rise in developing Asian economies, sales of motor vehicles and household appliances are expected to rise strongly, providing further support for the consumption of galvanised steel and hence zinc in the region.

but consumption growth slowing in the United States

On the downside, US economic growth is assumed to slow in 2007, with the housing sector to be significantly affected. Specifically, US housing permits dropped by 11 per cent year on year during the first nine months of 2006. As galvanised steel is used extensively for roofing in the United States, a decline in housing construction is expected to flow through to lower consumption of galvanised steel and zinc. A broad based economic slowdown in the United States may also affect consumer spending on zinc intensive products such as motor vehicles and household appliances.



world production rising but affected by disruptions

Global refined zinc production is estimated to have risen by 3 per cent to 10.5 million tonnes in 2006 and is forecast to rise by nearly 5 per cent in 2007 to 11 million tonnes. Growth in world zinc metal production during 2006 was restricted by the low availability of zinc concentrates. This largely reflected the low prices that prevailed in the late 1990s and 2000s, which resulted in the closure of some marginal mining operations, and discouraged new exploration and the development of new mines.

A number of disruptions to mine production also contributed to relatively low availability of zinc concentrates. Specifically, there was an eleven day strike at Kumba Resources’ Rosh Pinah zinc mine (70 000 tonnes a year) in Namibia during November. It is estimated that up to 5000 tonnes of zinc production was lost because of this strike (although some of this may have been made up during the remainder of 2006). Mining unions in Peru have also raised the prospect of a strike to oppose government plans to limit profit sharing. Peru is the world’s third largest producer of mined zinc, accounting for 12 per cent of global mine production. An extended strike in Peru would therefore cause a significant disruption to zinc production and lead to a further rise in zinc prices.

zinc outlook

2005 2006 f 2007 f %
World change
Production kt 10 229 10 540 11 036 4.7
Consumption kt 10 628 10 960 11 150 1.7
Closing stocks kt 808 418 304 – 27.3
– weeks consumption 4.0 2.0 1.4 – 30.0
Price US$/t 1 382 3 285 4 238 29.0
USc/lb 62.7 149.0 192.2 29.0

2004 2005 2006
-05 -06 s -07 f
Australia
Mine output kt 1 352 1 382 1 468 6.2
Refined output kt 464 446 486 9.0

Exports
– ores and conc. kt 1 953 1 822 1 972 8.2
– refined kt 397 388 411 5.9
– total value A$m 1 466 2 540 4 102 61.5

click to download the excel data


new mines and restarts adding to production in 2007

In 2007, world zinc mine supplies are expected to increase as a number of new mines come on line and some marginal mines are restarted. Specifically, Kazzinc recently commissioned the new Shaimerden zinc mine (60 000 tonnes a year) in Kazakhstan and Apex Silver Mines are expecting to commission the new San Cristobal zinc mine (182 500 tonnes a year) in Bolivia by mid-2007.

Hudbay Minerals restarted the Balmat zinc mine in New York during 2006, which is expected to produce 60 000 tonnes of zinc concentrate in 2007. In addition, Teck Cominco is planning to restart the Lennard Shelf mine (70 000 tonnes a year) in Western Australia in early 2007 and Glencore is considering reopening three zinc mines in Tennessee that were closed in 2001, with a combined annual capacity of around 60 000 tonnes a year. Concentrates from the Tennessee zinc mines may be purchased by ZincOx and refined at the Big River zinc refinery in Illinois, which was closed in February 2006 because the cost of importing concentrates made continued operation of the refinery unprofitable.

Higher mine production should assist in easing the low supply of zinc concentrates and enable refineries to operate closer to capacity. However, this increase in production in 2007 is not expected to be sufficient to bring the market back into balance as strong demand in Asia is forecast to result in consumption exceeding production by around 110 000 tonnes in 2007.

higher Australian mine and metal output

Australian zinc mine output rose by 2 per cent to 1.38 million tonnes in 2005-06. This increase was drawn mainly from the ramping up of production at Oxiana’s Golden Grove mine in Western Australia.

Zinc mine output is forecast to rise by 6 per cent in 2006-07 as new mines, expansions and restarts are commissioned. In particular, production from Xstrata’s Mount Isa mines is expected to increase with the completion of stage 1 of the zinc–lead concentrator expansion, with increased feed coming from the ramping up of the Black Star openpit mine. Zinc mine production is also expected to be boosted by the commencement of production from Intec’s Hellyer concentrate project (30 000 tonnes a year) in Tasmania and Teck Cominco is on schedule to restart the Lennard Shelf mine (70 000 tonnes a year) in early 2007.

Australian production of refined zinc fell by 4 per cent in 2005-06 because of once in thirty year maintenance at Zinifex’s Hobart refinery. Refined zinc output is forecast to rise by 9 per cent in 2006-07 as production at the Hobart refinery returns to normal and higher production from Sun Metals’ zinc refinery is also expected.

Australian exports earnings to rise strongly

Despite a decline in export volumes in 2005-06, export values rose by 73 per cent to $2.5 billion because of substantially higher prices. The volume of zinc concentrate and refined exports are forecast to rise by 8 per cent and 6 per cent respectively in 2006-07 as production increases. The value of zinc exports is forecast to increase by 62 per cent to $4.1 billion as a result of higher production and higher prices.

 

[drmb]

I hardly see a slight delay and marginally lower grades a problem - higher grades are found deeper in the tailings - momentum will gather - production will be ramped up in good time - there is no problem here! Itchy trigger finger paranoid day traders might see this as an exit signal but rational investors will stick with INL.

Very impressed with quality of the discussion in this Forum and find the remarks very useful. I hold in my smsf, but like to think of it as a tech stock as well as metals producer. I am not to fussed about the week-to-week production or the grades as I have as mid- to longterm hold.

 

[Novski]

INL has has been holding and consolidating just above its price gap (23c-23.5c) It has however momentarily dropped below this gap, to 22.5c. The gap has been a strong support and i don't think it's good for it to close below.

What do others think..?

 

[zombie_ninja]

INL has has been holding and consolidating just above its price gap (23c-23.5c) It has however momentarily dropped below this gap, to 22.5c. The gap has been a strong support and i don't think it's good for it to close below.

What do others think..?

Maybe it's due to the overnight drop in Zinc price?

XMJ is down 50 points at the moment anyway, so maybe it's just due to the overall market movement?

 

[imajica]

in a few months these prices will be cheap - great accumulating opportunity at the moment - selling pressure from Ivanhoe is spooking the smaller investors - new investors will be keen once Ivanhoe is finished

 

[powerkoala]

from what i know
ivanhoe still have 39M share to dump
dunno when they are going to dump it or just simply hold it
with zinc price keep going down, it is very hard for this sp to move north.
still holding though...
thinking to top up...

 

[j4mesa]

Imajica,

I am still prett new to share trading....
it seems that you have a lot of knowledge about INL.
Apparently after the first shipment which is yesterday, indeed the sp is going south, it seems that since last month, INL sp has been moved only slightly by a good ann (first shipping etc...).

Might you know any reason behind that?? Anyone is welcome for the comments. Thank you in advance.....

 

[wintermute]

My opinion is that a lot of short term traders jumped on this, and now that it is not moving they are getting out.... falling zn prices can't help the situation. I wouldn't be surprised if 19.5c support is tested again, but if it is I suspect it will be brief...

I bought some more this morning at 23.5c, obviously should have waited LOL.. what is happening now is very similar to what happened between April and Oct last year... hopefully it isn't going to be that long this time!! Someone is soaking up the shares...... they don't tend to put big orders in waiting for the sp to come down to them... they don't put any orders in at all and wait till an apparent lack of buy side support causes panic selling, and then the orders appear as if by magic, to soak up whatever people want to offload... This is of course just my opinion... my average buy price after this mornings purchase is 19.5c so I'm not in a loss situation (overall), which others may be...

It's possible that maybe some people have bought due to the potential of the intec process (though it hasn't appeared to be the case) and are getting nervous because the BFS hasn't appeared on time... don't know.......

I suspect however a quick look at INL charted against ZFX will show that it is basically concern over zn prices...

Tony.

 

[Porper]

Just looking from an Elliot Wave / Fib retracement point of view, maybe we have another 0.015 to go down.

wave C is usually the same length as wave A, so that takes us to 0.21.

I hold so hope I am wrong.

Also highly unlikely but the ABC correction can take us back to the wave 4 low area, but as we seem to have had a extended wave 5, like I said, highly unlikely.

The good news is that wherever wave C takes us, we should have another 5 wave impulsive move up.

Definitely panning out nicely from a Elliot wave/fib point of view.

0.21 has a good chance of being the low, so any bounce from here would be as good a time as any to get some i.m.o.

The worrying thing is that todays volume was a bit higher than usual with a wide ranging bar, not many buyers around.

I hold so hope the count/retracement pans out.

 

[Sean K]

Definitely panning out nicely from a Elliot wave/fib point of view.

0.21 has a good chance of being the low, so any bounce from here would be as good a time as any to get some i.m.o.

The worrying thing is that todays volume was a bit higher than usual with a wide ranging bar, not many buyers around.

I hold so hope the count/retracement pans out.

I agree this been a potential bounce point, just on the support line around 20-21 cents. I ´d been waiting for it to possibly get back here, or start new uptrend before buying in again. It ´s hard from where I am atm though. I ´ll just stick to the tequila for now...

 

[kransky]

can someone with low level access to the market say if the large parcels sold in the last few days (especially late yesterday and early today) are by ivanhoe mines?

is it possible that ivanhoe have to the end of jan to sell their stake?

 

[imajica]

quarterly activities report released after market close

looks to be very encouraging!

 

[drmb]

quarterly activities report released after market close

looks to be very encouraging!

I'm determined to hold this for a longer term in my smsf. I think its a tech stock but its nice to see some cash flow will be coming in. The very gloosy report had lots of nice photos earnest men in hard hats, woofy big equipment etc, but I think the final paras are worth quoting

Quote "The Company’s cash balance at 31 December 2006 was A$545,000. Payment of approximately A$1.24 million will shortly be received from Polymetals to reconcile the actual start-up costs with Polymetals’ agreed A$6 million up-front commitment. The Company’s available cash, receivables and debt facility with Macquarie Bank are more than sufficient for its working capital requirements (inclusive of the HZCP) through to positive cash flow in early February 2007.
In response to the above progress, I am pleased to report that both the ASX and Deutsche Boerse share prices of the Company doubled during the December quarter 2006, though the INL share price has since retreated somewhat during January 2007 in line with the LME zinc price and the
share prices of other zinc producers.
Even at today’s subdued level, Intec’s share price has quadrupled over the past 12 months. Remarkably, this is despite the departure (either fully or substantially) from Intec’s share register during that period, for a variety of reasons, of all of the company’s erstwhile nine largest beneficial
shareholders. However, I have recently and definitely been advised by the current major shareholders that they have no further foreseeable selling intentions. Now that Intec is demonstrably a cashflow positive zinc producer, I will be looking to fortify the Company’s institutional shareholding base in coming months. Yours faithfully Intec Ltd Philip R Wood Managing Director and Chief Executive Officer" End quote - lovely imo!!

 

[j4mesa]

yes,pretty encouraging

but I just doubt it would be able to move the sp...
we'll see tomorrow

 

[stockmaster]

I'm determined to hold this for a longer term in my smsf.

um, i do agree there is a lot of potential, but as a smart trader, i believe it is essential to sell when the situation differs to what you expect, and it is important to restrict loss by not keeping a share for long term if the price is consistently going in a downward trend when market reverses the movement.

I also believe there is reason behind the big selling, instos do have more detailed information than individual retail trader.

I still believe it is wise to sell now and pick back up when price is stable enough to rebound. I do believe some traders are making significant loss at current price, but small loss is better than bigger loss, by selling, at least there are minimising their risk esp. when the market has temporarily achieved a record price!

 

[Kipp]

I agree this been a potential bounce point, just on the support line around 20-21 cents. I ´d been waiting for it to possibly get back here, or start new uptrend before buying in again. It ´s hard from where I am atm though. I ´ll just stick to the tequila for now...

Traders are never ever fully on holidays... don't bring your laptop next time...

 

[j4mesa]

this share is just going nowhere.....
with the good ann, it is still trading sideways

 

[powerkoala]

anybody knows
what is happening?
there are BIG sellers
and they are starting to dump this

just check company profile on IRess
now ivanhoe only have 14M shares left
i do believe this is their selling again

 

[marklar]

just check company profile on IRess
now ivanhoe only have 14M shares left
i do believe this is their selling again

Thanks pk, I was wondering how their selloff was going. Looks like the share price will be kept down for a while yet, I still like this company, I'm going to be patient.

m.