SMM - Summit Resources

[Sean K]

Yeah, that's all assuming that they only ever have 180m shares on issue too. How are they going to fund future exploration and mining? Is the money going to be given to them by a bank for free, or will they have to complete some big placements diluting the stock? Or, maybe PDN will pay for everything, or buy them out? I see placements on the horizon.

 

[dj_420]

True kennas, but if placements were all to occur over $1 per share then it wont dilute sp much at all. considering 187 million on issue now, another 10 million placement that would put it at 197 million shares on issue. still great value and gives SMM another $15 million in the bank for exp.

thats where i see a large problem for company like EXT, to raise enough capital to continue exploration they will have to issue a large amount of shares. say they wanted to raise another $10 million for exp (at current sp), that works out to be another 125 million shares to be placed. To continue doing that and to even begin developing mine they are going to blow out placement to a very large number, thus with a high amount of dilution.

In SMM case i dont see further placements to be much of a problem, placement funds exp - and exp upgrades current resources

 

[dj_420]

I think the effects of PDN taking over VUL will be minimal. If PDN succeeds in taking over VUL then there are benefits to SMM such as:

- a large company with good mgt all experienced in uranium
- a better partner for development of deposit
- SMM still retains mgt, ownership of deposit, it means that PDN can earn only 50%
- SMM still has 100% ownership in 6 tenements and 50% in another 2 (still been 100$ owned and managed)

If PDN are found to be in breach of pre-emptive rights then

- SMM can purchase remaining 50% of deposit for 85% of current market value

Either way SMM wins. Looking forward to a re-rating of SP soon, that will come with upgrades of u deposits.

Mgt have also stressed the focus of the company, that they intend to fully develop and mine the resources that they are defining. Mgt also retain around 30% of shares on issue which means that a takeover would not be met without a fight.

 

[Fab]

Sounds like it should go up today. Look at the announcement

 

[dj_420]

If everyone is excited about EXT take a look at SMM. Ann stated that JORC compliant resource estimate has been increased to 57 million pounds of uranium.

That is a significant increase over previous estimates which was 36.5 million pounds of u.

In ground resource value just for valhalla is $2.7 billion US. As soon as other tennaments have JORC compliant resource estimates this company is really going to start moving. This means that SMM can begin studies for a bankable feasibility study.

Resource estimates are now been calculated for andersons, skal and mirrioola u deposits. Should have a huge JORC compliant reserves by end of year.

What are other peoples opinions on the ann today??

 

[Sean K]

Cath, You talking about the 9m share placement at $1.50?

I've been doing some more research on this and I'm starting to be converted, even though it's in QLD. Beattie can't stay in forever, and I think it's a very good change the Nat Labor Party is going to change it's no new mines policy. SMM has the 3rd largest deposit in the country now, JORC, and in a great loc near all the log spt around Mt Isa. They already have plans for a mill and will be pretty much right to go as soon as Labor say 'yes, OK, you can dig up those $billions worth of dirt tomorrow.'

Seems to be wavering atm, and not sure what effect the $1.50 placement has on it. Perhaps just needs some positive news about further mining in Australia for a kick up.

Support at $1.40 on the down side. Resistance at $1.60.

 

[Archinos]

I agree kennas re SMM +ve chances. They're reasonably advanced now & a forerunner to becoming a monster iff policy is changed. I remember kicking around the old Mary K mine in 90-91 and discussions revolving around "there's still a hell of a lot of it in ground around here... just wait till the price is right and the policy changes etc". Can't wait for their other prospects to be JORCed.

 

[dj_420]

the only thing holding this company back is policy. BUT if policy changes at a federal level it will effectively overrule state policy. SO if policy is reversed beattie cant do much but go with it, and im beggining to think that his mood is changing anyway, he wanted a study done on the effects of uranium enrichment would have on qld coal industry.

seems to me like there is a lot of pressure for him to change his stance. us and china want us to begin u enrichment also.

what i like about this company is the amount of shares on issue. after last capital raising it is 197 million. tiny compared to what value this company holds. and now co has around 15 million to continue drilling.

not a great deal of interest in this stock at the moment, but im just going to keep buying into dips. this is one that will be next big u miner.

what do you think kennas??

i like the massive increase on valhalla, and the fact they still have another 8 tenements with very good grades of u. cant wait to see these be turned to JORC compliant deposits

 

[Archinos]

Policy is the key, and Beattie is already on record for saying that if Fedral Labor policy changes, he will fall in line (assuming he wins next election...).

 

[dj_420]

i also forgot to add uranium is still increasing in spot price. up to US $48 per pound now!! good stuff

have a look at this graph.
shows uranium supply and demand from 1970 - 2005

dont know if this image has worked
how do i upload image into my post???

 

[Archinos]

Cathers
since you're interested in following the U price, perhaps you'd like to take a look at an article by Paul van Eeden @ paulvaneeden.com, article dated 2/Sept05 (under Commentary) re inbuilt potential future price influences in the processing of U fuel (Uranium: a tale of tales). Something to keep in mind.

 

[Sean K]

Policy is the key, and Beattie is already on record for saying that if Fedral Labor policy changes, he will fall in line (assuming he wins next election...).

Good article this am in the rear of the Fin saying the Labor no new mines policy is more than likely to change. I've now picked up some SMM at $1.49.

I'd expect PDN to eventually take this over, or with the legal stouch atm, there's a chance that SMM could acquire VUL, which would be interesting.

 

[Fab]

I thought VUL had just been acquired by PDN. I have PDN and SMM and I think I will keep them for a long long time.

 

[Sean K]

I thought VUL had just been acquired by PDN. I have PDN and SMM and I think I will keep them for a long long time.

SMM are saying that VUL provided PDN information regarding their company that should not have been divulged under the JV between SMM and VUL. This action could result in SMM compulsory acquiring VULs half of the project. It's going to be fought over in the courts by the look of it.

 

[Archinos]

Any thoughts on SMM trading strategies in light of impending court action?

 

[Sean K]

Any thoughts on SMM trading strategies in light of impending court action?

Sentiment might go against SMM if it's long and protracted and PDN have the upper hand.

On the other hand, why would PDN not want to buy them out? They're about to be producing at LH, will have good cash flow, have huge market cap. They could easily pick up SMM at another 30% premium without blinking. Then they have another 60mtn ish of uranium to be mined when Labor change their policy, which is odds on.

I'm backing the second.

 

[Archinos]

thanks Kennas.
I was thinking that as a rule of thumb, nobody likes court action and once it ensues there might be a slight SP retraction. The outcome is anyones guess at this stage...

 

[dj_420]

i dont see SMM been taken over quite that easily. directors of SMM own over 30% of the shares. i have spoken with director and he assured me that a takeover attempt would be met with a fight. as far as a stock goes SMM is very undervalued and a TO attempt will be rejected.

also SMM have just been entered into ASX300 which will deserve a re-rating. i think that SMM will come out on top in court case and as such will be able to take the remaining 50% of mt isa deposit at 85% premium to market value.

even if PDN can takeover VUL then SMM still wins because they retain mgt of deposit. either way it will mean SMM still remain in control.

 

[Sean K]

i dont see SMM been taken over quite that easily. directors of SMM own over 30% of the shares. i have spoken with director and he assured me that a takeover attempt would be met with a fight. as far as a stock goes SMM is very undervalued and a TO attempt will be rejected.

also SMM have just been entered into ASX300 which will deserve a re-rating. i think that SMM will come out on top in court case and as such will be able to take the remaining 50% of mt isa deposit at 85% premium to market value.

even if PDN can takeover VUL then SMM still wins because they retain mgt of deposit. either way it will mean SMM still remain in control.

85% premium? Where did you get that from Cathers?

You chatting to the directors? Please don't start calling him 'The Chief'! he, he.

You paint a rosy picture, hope all works out. I haven't bet the Moon on this. Just Pluto. So, looking forward to a positive outcome here.

 

[Archinos]

Kennas
SMM initiation of court proceedings date 28th July

"entitled to exercise an option.....at a price to be agreed, or failing agreement at 85% of the market price determined by an independant expert."