TZN - Terramin Australia

[zolow]

Just had a quick look at commsec's research insight...

Apparently this stock is worth a ton... anyone got any views on this valuation?

Feature Article
Terramin Australia2: Angas all good, TZN great value!
Last traded: $1.30
Market cap: $152M
Sector: Materials
BUY / OUT PERFORM
Valuation: $ 5.09

Summary of previous report dated 02/10/08 What’s new? On 16 September 2008, Terramin Australia (TZN) announced a financial restructure for their Angas Mine in an effort to free up future cashflow and provide flexibility to develop the world class Tala Hamza deposit. TZN’s Angas mine has been successfully developed and it is now ramping up production. TZN is trucking product to Port Adelaide and has already shipped a 5,000t parcel of zinc concentrate. TZN has also been trucking lead concentrate to the Port Pirie smelter. Restructure details The total financing restructure package for Angas included:

 closing out the lead-zinc hedge book, providing $13m in cash,
 replacing the Angas’ project finance ($45m over 36 months) with a corporate facility on friendlier terms ($35m over 54 months),
 an $11m capital raising comprising;
 an institutional placement of 3.55m shares at $1.70 to raise $6m, the issue of $5m of unlisted 8% unsecured convertible notes at $2.21 with a term of five years.

Valuation and recommendation The TZN share price has fallen heavily over the last five months, from nearly $4.00 in May to $1.35 currently. CommSec’s current base case valuation is $5.09 per share. While there is a significant difference between the share price and our valuation, there has been nothing in TZN’s performance, or that of the zinc price which has fallen from US$2,280 to US$1,680 (or $2,425/t to $2,090 in AUD terms) that has not been fully anticipated by CommSec. In our view, there is huge upside in TZN not reflected in the TZN share price. CommSec retains its BUY / OUT PERFORM recommendation on TZN.

 

[oldblue]

All resources companies are being marked down at present and zinc are some of the worst hit.
I don't know about a valuation but it's worth noting that CommSec was a Joint Lead Manager for the recent share placement and that CBA lodged a substantial shareholder notice shortly thereafter. I'm not saying that they got stuck with some underwriting commitment but it looks as if they subscribed to the placement!

 

[slimdusty96]

A nice surge today to 95c! Largely because of the announcement? (Zinc & Lead prices haven't gone up that much since yesterday)

 

[Prospector]

I have been watching Terramin a long time, ever since the 'no mines' sign went up at Strathalbyn, and then we watched the mine get bigger and bigger. Debt very much under control and good resource areas as well.

 

[jancha]

Any ideas as to why TZN has taken a tumble with large volume sells today? Seeing as it had a sp of $1 not that long ago with China taking an interest in it.

 

[jancha]

Anyone know as to why the trading halt with Terramin?
Currently back to the $1 region with late buying prior to the trading halt.

 

[GREENS]

Trading halt in respect to a proposed capital raising. Given the share price rise over the past couple of days in a falling market one would suspect word was leaked early so those wanting to participate could jump on the register before the trading halt. As most companies are now making the ex date the day the company comes out of the trading halt meaning new shareholders cannot participate. Definitely one to watch for the future if it can get its Algerian project up and running and in production on budget and producing within forecast cash cost estimates.

 

[jancha]

Trading halt in respect to a proposed capital raising. Given the share price rise over the past couple of days in a falling market one would suspect word was leaked early so those wanting to participate could jump on the register before the trading halt. As most companies are now making the ex date the day the company comes out of the trading halt meaning new shareholders cannot participate. Definitely one to watch for the future if it can get its Algerian project up and running and in production on budget and producing within forecast cash cost estimates.

Cheers Greens. Maybe not such a good time for capital raising then with the current market on a down trend.

 

[GREENS]

Not necessarily, just seeing some speculative heat coming off the market with economic data out of the US not living up to bullish expectations. Most data is looking in the rear view mirror now, The US is on the improve but just not as smooth and quick as analysts first thought, hence the pause and pullback. If word did in fact leak of the capital raising, then strong buying before the trading halt would indicate to me that investors are more than happy to be entering into TZN at higher prices. I wonder what sought of discount will be offered? $0.75-$0.80 mark?

 

[jancha]

Not necessarily, just seeing some speculative heat coming off the market with economic data out of the US not living up to bullish expectations. Most data is looking in the rear view mirror now, The US is on the improve but just not as smooth and quick as analysts first thought, hence the pause and pullback. If word did in fact leak of the capital raising, then strong buying before the trading halt would indicate to me that investors are more than happy to be entering into TZN at higher prices. I wonder what sought of discount will be offered? $0.75-$0.80 mark?

Dont they generally work on the average price of the last 5 trading days with a 10% 15% discount?
I think they did something similiar with ESG. With their share plan it was discounted to 85c.
Currently they're are trading under that so whats the point of buying them at a discount when you can pick them up cheaper now? I know thats easy to say after the fact but with the market being so volatile isn't there a good chance of it dropping lower than the share purchase price as with ESG?

 

[jancha]

Trading halt in respect to a proposed capital raising. Given the share price rise over the past couple of days in a falling market one would suspect word was leaked early so those wanting to participate could jump on the register before the trading halt. As most companies are now making the ex date the day the company comes out of the trading halt meaning new shareholders cannot participate. Definitely one to watch for the future if it can get its Algerian project up and running and in production on budget and producing within forecast cash cost estimates.

Nice annoucement today Greens. Algerian project seems to be coming along nicely.
Production costs down 40% & major resouce upgrade. Looking good.

 

[dandyjac]

Great to see TZN kicking along a bit today, up around 8 cents & volumes are increasing which is good to see

 

[buzzle]

looking for update on TZN.Price seemed to tank when a founder got out in May yet Algerian prospect seems to be getting bigger all the time.decision to mine expected soon and should be a formality.I don't know why no lift in price - is it sovereign risk? I noted a year ago that one major s'holder didn't take up an issue at 65c .Mixed signals seem to be the problem .
Any informed comment ?

 

[nioka]

looking for update on TZN.Price seemed to tank when a founder got out in May yet Algerian prospect seems to be getting bigger all the time.decision to mine expected soon and should be a formality.I don't know why no lift in price - is it sovereign risk? I noted a year ago that one major s'holder didn't take up an issue at 65c .Mixed signals seem to be the problem .
Any informed comment ?

Informed comment NO Some thoughts YES

TZN is a long way from production and earning an income. That type of company relies on periodic releases of news that says the company is moving forward. The SP tends to remain at a level that is influenced by the general resources market but up or down a little depending on the latest news.

The SP of these types of companies with operations overseas is also influenced by overseas politics, currency fluctuations and lately by the possibility of a Chinese interest and investment. There is always the led time to production and the costs associated with the necessary infrastructure.

When the SP fell steeply a few weeks ago there didn't appear to be any volume sell off so it seems that most investors are prepared to hold long term.

For comment to be "informed" it is necessary that the comment be made after a very detailed examination has been made. My examination of TZN led me to the conclusion "not for me". (That does not mean that it will be a good or a bad stock to hold.) Once again the jury is still out.

 

[buzzle]

Thanks mate, I have been on the sideline for some time and have seen some commentary that current price would relate to Oz. operations and next to no value given to Algeria.True,mining has yet to start and infruc. costs are always significant,but the mine is very close to a deep port.

 

[jancha]

Terramin up 80% from the beginning of December. Nice little profit for those holding.
Bonus $100 for the stock picking Comp looking likely.
Psss I think i'm safe on this thread from Tech as thinks i only trade in RED MAD and some company called PLU? lol

 

[Cam019]

A shake out on Friday. Price driven down into previous consolidation area. Demand found, leading to breakout and close above previous resistance.

 

[tech/a]

Notice the two high volume control bars to the left
Coincide with the one you have highlighted at about
16c which is where the test found support

Coincidence?