TRO - TriAusMin Limited

[stalk]

Re: TRO - Tri Origin Minerals

Thanks Stox,

Appreciate the reply.

The MPS Securities report was very bullish about TRO. I wonder if they still feel the same now. They put a valuation price of $2.86 and some people are saying they were being conservative.

 

[doctorj]

Re: TRO - Tri Origin Minerals

Model is attached.

Fantastic model! Thanks for sharing! Your generosity is something everyone can learn from and I'd love to see more share their modelling here.

I have to profess to not knowing a thing about TRO, but I've reviewed your model and I'm curious as to where you got the figure of 80kT pa of Zinc Concentrate from? I couldn't follow your post earlier in the thread.

I hope the questions from an uninformed individual aren't irritating. I've read the AGM presentation and I'm still in the dark. Is it likely their crusher/mill/flotation tanks (again, no idea of the nature of the deposit and how they plan to process it) will support this throughput? Does it take into account that even if they mine enough zinc metal to get 80kT pa of concentrate and have the crusher/mill/floatation tank capacity to support it that the chemical process is likely to be inefficient and recover less than 100% (maybe only 50%!) of what's available (with the rest going into the tailings) anyway?

Look forward to your response and that of anyone else that's willing to educate someone that doesn't know much about this stuff...

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

Thanks Stox,

Appreciate the reply.

The MPS Securities report was very bullish about TRO. I wonder if they still feel the same now. They put a valuation price of $2.86 and some people are saying they were being conservative.

One can look at the MP Securities report two ways - one can argue that it is bullish in its assumptions as to zinc prices (3000 USD at 80c AUD/USD in until something like 2020), but in respect to the actual TRO mine according to the management they have seemed to be quite conservative - MPS did their valuation based on (from memory) 220k tonnes per annum producing 40ktpa concentrate - management has said at least 440ktpa producing 80ktpa concentrate.

Models can vary a lot depending on your different assumptions, so valuation based on comparable companies often is used in practice - if one looks at the chart on page 4 of the MPS report, that pretty much sums up the pro-TRO argument.

Hope this helps.




doctorj: Thanks. I must confess it's not pro bono work, I do have a substantial part of my portfolio in TRO.

The 80ktpa concentrate was from the company's annoucement on Monday - the company stated the project would mine at least 80ktpa concentrate for at least 8 years - so I was basically taking the worst case scenario where the mine still goes ahead given by management and seeing how much TRO was worth in those circumstances. Don't know what sort of setup TRO is looking at running [the PFS was VERY dissapointing on detail..imo it was rushed out to meet the deadline and we'll see a more detailed one soon] but clearly the company believes they can produce 80ktpa concentrate for at least 8 years, so I went with that. The 50% zinc comes from the MP Securities report.

 

[stalk]

Re: TRO - Tri Origin Minerals

Why is this share going down? MPS values it at $2.86. My god why are people so stupid and driving this price down??!!

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

Well stalk, if the market was always right, there wouldnt be any good buys out there!

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

Well, its an interesting situation for the short term sp now..

we've seen some biggish holders (50K-100K) sell their stakes after the PFS is released but there was someone out there buying those stakes up (look at the amount of ~20K bids over the past few days..)

now we've got over 100K sitting on the bid (including one pure 40k order) - is this a genuine bid trying to snap up shares being sold off by those dissapointed wit the PFS, or is the guy trying to sell 100K at 1.30 by creating a market? Imo the 100k @ 1.30 is quite suspect since TRO's average daily volume is quite low, but we can't know for sure.

As interesting as a share with 70K volume can be, lol!

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

Wow, that 100K @ 1.30 was taken out in one fell swoop!

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

Hey guys,

Finally got some time to look at the presentation from TRO released on the market a couple days ago. Following the presentation theres been some $50k+ buyers into TRO on the depth, not sure if that is related to the presentation or other buying.


Summary

For the best summary of TRO, see the attached chart in this post (which comes from the Martin Place Securities report)..big deposit (has resource about equal in size to CBH which has a market cap of 440mm!! compared to TROs 110mm! and herald which has a market cap of 213mm!) trading at a small %age of in ground value (even with an 83c AUD).

TRO's value is being recognised in the Canadian market with TRO's parent company which owns 54% of TRO going up by 60% over the last 3 months, compared to TRO's down 20%. In fact, TOE is an even better buy than TRO since TOE is basically worth only the 54% of TRO that it owns! But for those of us who can't buy Canadian shares, you'll have to settle for TRO

chart here

-------------------


Firstly the company has done some drilling at Woodlawn and found no water down to 300m, which is good news but mostly expected. Second the company's other drilling projects are going ahead which is good to see but no concrete news on those projects yet.


In relation to the PRESENTATION:

Slide 33 has some details on a potential Lewis Ponds mine..you can see Woodlawn U/G and Lewis Ponds combined is 16.7Mt @ 12.2% Zn equiv,which is 2.0374Mt of zinc equiv.
At the current AUD zinc price of 4320, thats $8.8bn of in ground metal! With TRO trading at just 1.2% of in ground value!! Again, see the chart (sourced from the MPS report) attached to this post..


Slide 21 has a good breakdown of TRO's metal content:
highlights are
56% zinc
17% copper
13% lead
(Remember my model only valued the zinc!)


Confirms TRO is targeting 2007/2008 for development [sooner the better!]
Second has PFSes in progress on Woodlawn Tailings [as opposed to underground, TRO's jewel in the crown], Lewis Ponds and Pylara Limestone - I wasn't up to date with these. Not sure when they are due.

You can see from the map that the company loves the volanic rock belt with Woodlawn on it, along with Lewis Ponds. If they found another resource of reasonable size at Lewis Ponds which is in similar rocks to Woodlawn [I cant really see them finding another Woodlawn...its just too big for there to be that many deposits out there] then wow..drilling is underway so im definately keeping an eye on this project!

Page 16 also highlights the brief summary of Woodlawn apart from the massive deposit:
got an agreement with current land users
a lot of infrastructure in place from the old mine and nearby land users
(inc. rail access to a port)
close to skilled workers unlike a remote project
mining lease already approved
little cost needed due to existing infrastructure [might need to revise my 40mm mine cost downward!!]

Slide 18 CONFIRMS that the PFS annoucement in relation to Woodlawn Underground did NOT include Woodlawn Tailings..a project which MPS valued reasonably highly. So the 440k TPA with 80kTPA concentrates used in my model are only one of the company's projects.

Slide 25 has a nice map for all those who enjoy leggo and big dumpster trucks

 

[stalk]

Re: TRO - Tri Origin Minerals

I note that TRO have been putting out some media announcements since their disappointing PFS. Trying to get their flagging share price up.

Let's hope that works!

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

stalk, imo PFS wasn't that bad just dissapointing in the lack of detail!

From the news today:

The sulphide annoucement is good news, we should see some drilling to get some grades in this area soon - both Woodlawn and Lewis Ponds are on VMS and it looks like TRO's found another promising site nearby Woodlawn. Waiting to see some grades before I get carried away though!

Re: the capital raising, no suprises there...they had 1.4mil in the bank at year end and have budgeted 7m of expenses this year. When the capital raising annoucement is released I'll give my thoughts then...a large equity private placement at substantially below market price would be a dissapointment.

 

[stalk]

Re: TRO - Tri Origin Minerals

Hey stox

How far do you think the share price will fall tomorrow once it comes out of the trading halt?

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

stalk,

I don't think its a question of how far it will fall! At the moment theres nothing to indicate that the share price should drop, if there was no capital raising id say i expect it to rise slightly on higher zinc + the drilling results.

However, it all depends on the capital raising! If its at a disappointing price, the share price could slump. If its at or around market, it should be slightly positive and if its above its very positive! We just have to wait and see.

 

[pacer]

Re: TRO - Tri Origin Minerals

STALK is a stalker....buy a cheap dial up account for a few hours at TANDY and down ramp good stocks....he only has 6 posts....go away STALK
I don't own these shares...just checked his form....from NMS thread and thought I'd warn you guys......

He's been here and NWR and on HotCop all day.....it won't work here or the others mate....we are onto your game!

 

[Ken]

Re: TRO - Tri Origin Minerals

CVC is a major shareholder of this company.

They own over 6 million shares in TRO.

I hold CVC, so find this interesting.

 

[barrett]

Re: TRO - Tri Origin Minerals

Hi Stox,
I'm new, evaluating TRO - thanks for sharing the model you posted, very helpful
The version you posted has capex at $40M for UG mine project, 20debt 20equity, valuing TRO at $2.04. If capex rises to $100M, around what MPS estimated and in the ball park of what TRO expect, the valuation falls to $1.04.
I am not familiar with interpreting discounted cash flow analyses, perhaps it is a very conservative method.. but I hope the above does not mean TRO is now overvalued. I realise the assumptions eg zinc price are conservative & the model includes zinc only.
Thanks,
Barrett

 

[stoxclimber]

Re: TRO - Tri Origin Minerals

barrett,
did MPS assume $100mm mine cost? I don't see it in their report [not saying its not there, just saying that I don't see it] - 40mm was a figure i came up with looking at some comparable companies [just a ballpark] but it could be off.

It also depends on your assumptions as to debt/equity mix (the more equity the company issues at below fair value the worse it is for existing shareholders).


Personally I'm not holding TRO at the moment, not because i dont think its a good investment but because it doesnt look like we are going to see much activity until next year, so the share price probably won't move much (either up or down). Of course, if we see some fund interest as TRO moves towards being an emerging producer it could push the price up. Overall I see TRO as a relatively low risk holding (compared to the sector) with low upside and downside until more news comes out..

 

[barrett]

Re: TRO - Tri Origin Minerals

Stox,
The MPS assumption is in a margin note on p.3 - expected capex $100M for UG and $40M for tailings project.. also in a table footnote on p.3, they assume the company -ends up- with a debt:equity ratio of 40:60, therefore UG+tailings capital funds raised as $35M equity and $105M debt, given share price of $1.26. The $100M capex causes your zinc UG model to give a low valuation based on DCF - around the current market price.. but the market cap/cash flow is still around 2, rather good value to put it mildly.. market cap/in-ground metal value chart you posted also screams value. So I agree with your positive long-term outlook..

I'm in Canberra, a relative of mine occasionally works at Woodlawn open pit - a company called Veolia puts Sydney waste in there and reticulates water over it to get everything rotting down and producing lots of methane. The water that collects at the bottom of the open pit is then pumped back up, and so it doesn't go into the UG workings.. But it means TRO can't use the existing portal at the base of the open pit - I gather they will tunnel down from surface, about 4km of tunnel to reach the UG workings -that spikes the UG capex by about $18M.. then there's the mill and fleet..

 

[barrett]

Re: TRO - Tri Origin Minerals

TRO has broken out on high volume but no news.. When I spoke with the MD about 6 weeks ago he said Pato's were preparing a report on them, maybe that's out?

 

[doogie_goes_off]

Re: TRO - Tri Origin Minerals

I'm on the lookout t see if this one breaks 8c. There's a serious increase in volume, resistance has been at 8c for a while and now there are no sellers until 11.5c. Will be interesting to see if anyone unloads below this price. I think we are likely to see a run. Market cap of $8M at 8c with approx $2M in the bank and Pb, Zn recovering from 6 month lows in recent weeks. If sellers come in at 9-10c and they get eaten up in reasonable volume then I reckon this one will be a winner.

 

[Mailmancp]

Re: TRO - Tri Origin Minerals

This stock is breaking out! Look for a good jump in share value over the next week or so. I cannot believe that TRO:ASX is as cheap as it is compared to TOR:TSX .

This coming week should be fun. Cheers