TTR - Tectonic Resources

YOUNG_TRADER said:

With Nickle at such record levels and the dangerously low stockpiles still being depleted its a great time for TTR to focus its efforts back on its Rav 8 Nickel Mine

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YT, RAV8 is empty & may be a while before they stick another hole in the ground looking for more Ni. Focus is on gold now, which also looks promising.
UF

In my view, Tectonic Management have made a number of serious errors that have compounded, to create the current situation

They entered a Joint Venture (Burnakura) with limited financial resources, expecting to produce gold for under $500 per oz. After some bad luck (flooding & loss of production), they increased their exposure to this venture by building an on site accommodation facility for 90 people – obviously expecting it to be profitable and long term.

I think the strain on their resources was larger than expected, and the cash costs of producing gold much beyond their estimates (under $500 was their original estimate, compared to over $700 actual, reducing to $685 when mine development ceased). This caused audit Partner KPMG to question their ongoing viability, and led to the JV Partners deciding to divest, and focus on their prime assets elsewhere.

Now they are concluding the ore processing, prior to attempting to divest the asset (mine plus camp for 90 people + proven resource base), and recoup enough cash to continue some development of their prime asset - Phillips River.

It seems that re-commisioning RAV8 is just to keep being an operator, rather than an explorer (different ASX reporting requirements & maybe to keep an experienced crew??), as 1oz per tonne nickel is pretty low margin production.
The Mincor announcement provides them with a much needed cash injection to keep them rolling.

I hope they get a good price for the BJV, as that is critical to further Phillips River development.

Phillips River seems a tidy resource, particularly the 500,000 oz Kundip gold, and over 7million oz Silver at Trilogy.

(I hold, at prices above their current value)

Hi Pepy, an insightful post. But some observations that may shed some light on what happened.

The story with having to build the camp at Meekatharra is that they had little choice at the time. The only accommodation anywhere near was at SBM's old Bluebird operation, approx. 50 kms from the minesite. Mercator Gold, who bought the Meeka assets from SBM, then apparently gave them the old heave-ho from the camp on short notice, since they needed it for their own exploration crews. Employee turnover was also a problem, as the commute to the camp once any substantial rain appeared, turned from 30 minutes to over an hour, adding to the already 12 hour day. I know a couple of people who worked up there briefly.

Also, if every company waited until it had a five year mine life before it commenced, most mines would never see the light of day. These smaller companies especially need to take that little bit of risk and kick off on a short-term horizon, hoping to use the funds generated to develop some long-term ore-bodies.

They did go into it under-funded and under-explored, but it partly an ugly set of circumstances of plant commissioning problems, production delays, mine flooding incident combining that saw them undone.

I notice that Tectonic has just appointed another Director, Hamish Bohannan.

While they mentioned his qualifications, and Industry experience, they neglected to mention that he is the Managing Director of Gallery Gold, which operates in Botswana. Bohannan oversaw bringing it to production. He was also an EGM at Iluka in 2001.

The primary shareholders in Gallery (only 3) are listed below.
Isn't Google just the very beeeesstt invention????

I see this as being quite positive, as Steve Norregaard mentioned Bohannan's expertise at start up operations. I am thinking that after the 6 monthly financial statement (a loss of maybe a couple of million - sometime in the next month), the bad news may be over, and we may see movement around Phillips river.

(I'm no financial advisor, just a mug who invests in plainly risky propositions)

------------------------------------------------------------------------
Gallery Gold Limited


:: General Information :: Nature of Business :: Related Organisations :: Related Facilities :: Related Projects :: Industry Activities by Country :: Directors/Managers :: Contact Information

General Information :: Update :: Upgrade


Organisation Type/Location: Company in Australia

Registration No.: ACN 009 125 197

Previous Name: Gallery Gold NL

Listing(s):
Exchange Market Name ISIN
Australian Stock Exchange (ASX)
[GGN]

Australian Stock Exchange (ASX)
[GGN]

Botswana Stock Exchange (BSE)
[GGN]


Business Sector(s):
Mining - Gold Mining
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Nature of Business :: Update :: Upgrade


The Mupane Gold Project was officially opened by the President of Botswana, His Excellency Mr Festus Mogae on 12 February 2005. The operation was ramped into full production in mid-January 2005.



Related Organisations :: Update :: Upgrade


has shareholder: African Lion Ltd (43.3%) - Johannesburg, South Africa

has shareholder: Lion Selection Group Ltd (43.6%) - Melbourne, Australia

has shareholder: Resolute Mining Ltd (Australia) (11.8%) - Perth, Australia



Related Facilities :: Update :: Upgrade


has a share in: Golden Eagle - Gold Mine near Francistown, Botswana

has a share in: Monarch - Botswana - Gold Mine near Francistown, Botswana

has a share in: Mupane - Gold Mine near Francistown, Botswana

has a share in: Signal Hill - Gold Mine near Francistown, Botswana



Related Projects :: Update :: Upgrade


is principal in: Buckreef-Rwamagaza gold project

is principal in: Kitongo gold project (100%)

is principal in: Mupane Gold Project, Botswana (100%)

is principal in: Nyakafuru project

is principal in: Tati, Maitengwe and Vumba greenstone belts



Industry Activities by Country :: Update :: Upgrade


Gold Mining - Botswana
Apart from an advanced gold exploration program in Botswana, Gallery Gold also own non operational Golden Eagle, Monarch and Shashe gold mines.



Directors/Managers :: Update :: Upgrade


Managing Director: Mr H Bohannan (Hamish)

Chairperson: Mr J Shaw (John)

Company Secretary: Mr G Anderson (Graham)

General Manager - Mupane Gold Mine: Mr S Gula (Stuart)

Director (Non-Exec.): Mr P Buck (Peter)

Director (Non-Exec.): Mr MP Curnow (Michael Paul)

Director (Non-Exec.): Mr C Munro (Craig)

Group Business Development Manager: Mr M Anderson (Michael)

Group Projects Manager: Mr L Putland (Linton)

Group Exploration & Geology Manager: Mr Tomkinson (Marcus)

Chief Financial Officer: Mr S Hills (Stephen)



Contact Information :: Update :: Upgrade



Gallery Gold Limited

Tel: +61 8 9321-8643

Fax: +61 8 9321-8931

E-mail: Not Known

Office Address:
9 Havelock Street
Perth
6005
Western Australia
Australia

Postal Address:
PO Box 95
Perth
6872
Australia

Update

Hamish Bohannan WAS MD at Gallery Gold, but they ceased to exist mid last year - due to merger with IAMGOLD (Canadian Gold producer 1mill oz per year). See attached ASX delisting announcement.

This is positive news though, as Tectonic need funding for Phillips River, and Mr Bohannan has proven record of financial dealing.

Can anyone put up some market depth info on this?
I know it's only momentary, but I just want to have a look anyway.
cheers

skegsi said:

Can anyone put up some market depth info on this?
I know it's only momentary, but I just want to have a look anyway.
cheers

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here tis skegsi, still need it?

Interesting that they managed to hold a tiny profit for the six months, I was expecting a loss similar in magnitude to Extract Resources.

Given this, they should be on track for a bigger profit in the second half - no further mine development at Burnakura, lower labour costs, continued gold production from the stockpiles, and the likely additional cash from the sale of Burnakura (which should be some millions between the Partners). That doesn't include Nickel sales from re-opened RAV8 mine.

New Chairman, with history of start up operations will help.

Against this, they indicated the intention to firm up further reserves from Phillips River, so more drilling will reduce profit.

A further telling point against them, is that I hold some of their shares

We should be getting close to an announcement.

Extract Resources half year report indicated that the Burnakura stockpile would be finished processing around the end of April.

Tectonic is not required to report Q3, but Extract must, and we will then see how much revenue from gold they received in the quarter.

Tectonic should be showing good cashflow from Burnakura (no mine development costs, only processing costs), as well as more from Rav8 Nickel left overs.

Market didn't like that quarterly. Looks like its getting cheaper and cheaper to buy a slice of Phillips River. Any thoughts on whats gonna happen funding wise?

afrtt22gt said:

Market didn't like that quarterly. Looks like its getting cheaper and cheaper to buy a slice of Phillips River. Any thoughts on whats gonna happen funding wise?

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Maybe they wont have to worry about funding. Hint of potential Takeover by Mincor posted on another forum. Volumes and price up today for absolutely no reason!!!!!

The "Other" forum is now saying Burnakura announcement will be this week (A guy called Roboshan seems to have heard details). This coincides with Extract shares rising from 78c to 91c over the past few trading days - which may or may not be related.

Some interesting things I have learned in my own research - Hamish Bohannan (Chairman of TTR) is also MD of a company called Braemore Resources which is listed in the UK. Braemore have a Nickel Tailings recovery project planned with BHP Billiton. More interesting is that the Chairman of Braemore is David Humann (who is also Chair of Mincor).

We know that Tectonic only made their Rav8 deal with Mincor in the last couple of months - which sort of coincides with Hamish becoming Chairman. So there are links with Mincor both commercially through the earn in agreement (Mincor presented their initial high technology research in their Sydney presentation about a week ago - posted on the Mincor web site), and through shared Directorships at Braemore.

On the Burnakura front, this operation is basically surrounded by Mercator exploration leaseholds - both northeast of their site, and southeast of the site, as well as on the west side. It would make rather an amount of sense for Mercator to buy, if the price was right - as they are planning first production this year. It has an operational mine, a 100 person camp site, and a proven (but smallish) resource base which could be increased by further drilling.

Some action today on TTR.....

No announcement though. Any one have some ideas on the SP movement??

Benwex

Posted on another site - Announcement on Burnakura sale expected any time now. Apparently deal is for an outright sale which was always going to be the best outcome for TTR.

Cash position will be near $10m by end of financial year. Nickel production at RAV8 going well with excellent head grades reported.


Things looking goooooooood for TTR reflected in breakout today with substantial volume.

robot said:

Posted on another site - Announcement on Burnakura sale expected any time now. Apparently deal is for an outright sale which was always going to be the best outcome for TTR.

Cash position will be near $10m by end of financial year. Nickel production at RAV8 going well with excellent head grades reported.


Things looking goooooooood for TTR reflected in breakout today with substantial volume.

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Hey Robot,
Just wondering whether whoever posted on the "other" site has any cred, and if so, where they got their information from, the volume sure does point towards something coming. Can you also please explain what the sake means to the company and its SP.

Thanks

News of Burnakura sale has been anticipated for a while and recently TTR reported that process was going OK. Timing of announcement was expected much earlier than this month so it could be a guess that it is about due or someone has heard something. Actually I saw a post on an Extract (JV partner of TTR) thread earlier than that one hinting something was happening.

As to the reliability of posts on these chat sites you be the judge - I am sure more than 90% are "honest" speculation but often there are some gems. Personally I take limited note of this type of information and prefer to base decisions on fact and fundamentals but it all helps. I posted the latest info to be helpful in respose to benwex's earlier post as to why the share price moved. If it all is true - yes it is very good news for TTR.

The significance of the Burnakura sale is that it has been a distraction from getting on with the Phillips River Gold Project. Naturally it provides significant additional working capital - I think the best they could get (their share) would be $5 million. This result would give TTR a solid cash position (after sales of the last of the Burnakura gold and current income from RAV8 nickel) of perhaps $10 million or more.

This would greatly enhance funding opportunities for Phillips River - principally to fund further drilling to progress to a fully bankable feasibility stage.

Suggest that you do some wide research on other forums and TTRs Web site and ASX announcements - you will get a better picture. Hope it helps.

Thanks for the info. I've spent the night trying to learn as much as possible about TTR, I'm only new too trading and i think i'm bitting more than i can chew at the moment, i don't have much spare cash lying around so i think i'll sit back and watch TTR for the time being

Gregcourageous or Greg you need to be courageous to invest in the junior mining sector. Only invest what you can afford to lose. These companies can run a tightrope from exploration through to actually producing.

The fundamentals are of course - strong metal prices, establishing a proven resource and experienced ethical mining managment with experience in all facets of the mining business (primarily geology, engineering and finance).

To invest in mining you need to follow the major commodity cycles and cycles within cycles. We are in an extended boom at the moment for two reasons. Firstly, extended demand from CHINA and MANY OTHER DEVELOPING NATIONS (which has so much momentum will continue for many years) and secondly it is taking a long time for supply to come up to demand. Depressed commodity prices in the 80s and 90s saw exploration and development reach a real low point. It is taking a long time to get new production up and running. Deposits are MUCH MUCH harder to find and more expensive to drill, develop and bring into production.

The junior miners seem to be following a cycle of their own - because the big and mid cap miners and the very speculative uranium segment are so popular, there is little investor money prepared to be risked in the junior sector (particularly where a juniors project is not yet producing). . However, later in the main cycle when share prices are tops and value starts to disappear from the big end of town (about now) the smart cookies will take their profits and seed a little into the small cap miners.

The time to get into junior miners is probably now. Reduce your risk by researching ASX reports, brokers reports, websites, check the backgrounds and track records of directors in particular (the internet today provides a wealth of information).

As far as Tectonic goes - they meet all the fundamental tests I would apply but please do your own research and watch it for a while (not too long or you may miss the boat).

I have been holding ttr for about a month now.

I spoke to steve norregaard yesterday and he gave me useful information that i thought i might share. He said that drilling at Phillips River would start in the coming quarter regardless of the sale of Burnakura. He also said quoting his words when i asked him of the progress of the Burnakura sale

" that selling a mine can be quite difficult, its quite different from selling a car or a house".

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He did not give me any specific information about the sale as i suppose that would be against the rules, but he did say that there were several parties interested and they were in serious talks with one party.

He also told me that Mincor had completed drilling two holes at Rav8, and that this project was still in its early stages with a lot of potential. He also said that there has been newly realized potential of a polymetallic resource at Kundip. He also mentioned that the institu value for trilogy alone should be upwards of two billion dollars.

Based on the information i got from him, i am quite positive about the future of this company. Lets also not forget that we also have Hamish Bohannan on our board who took Gallery Gold from MC of $20 million to $200 million before the takeover. I am not at all suggesting that the same is going to happen with TTR, just that this company is in the hands of experienced people and that institutional investors are still holding, based on the fact that there hasnt been a change in substantial holding or a ceased to be a substantial holder notice in a while. I look forward to accumulating this stock at current prices and imho the inevitable rerating at some during the future

Cheers

up 30% in one week! ?speeding ticket soon
Hopefully good ann on sale of Bunarkura soon.
Looks like 12c is resistance at the moment, then 52wk high of 16c.
Stronger copper prices now and good LT outlook should be good for Phillips River
GL holders