UMC - United Minerals Corporation

[Broadside]

this stock is an absolute powerhouse markco, those hits today are unbelievable. This is only scratching the surface, they have a shallow 3km length target for priority drilling.

Gets better and better. When we get the JORC in a week or two it will be a big green light for institutional buying but the share register is already tight as a fish's wattsit. Could be fun.

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OUTSTANDING HIGH GRADE DRILL RESULTS / RAILWAY PROSPECT
Assay results for two further drill holes have been received that are particularly noteworthy and material. Holes UI 274 and UI 273 set new standards for Marra Mamba mineralisation discovered at the Railway Prospect during the 110 hole Phase One drilling program. These holes are 100m
east of previously announced drill holes UI 221 and UI 257 respectively and form a continuous mineralised zone between these holes.

Drill Hole UI 274: 100m grading 61.1% Fe (from 57 to 157m)
Drill Hole UI 273: 80m grading 64.4% Fe (from 70 to 150m)

Previously announced results:
Drill Hole UI 257: 79m grading 60.5% Fe (from 45m to 124m)
(The hole ended in high grade material grading 65.6% Fe)
Drill Hole UI 221: 57m grading 63.1% Fe (from 52 to 109m)
Drill Hole UI 034: 36m grading 63.2% Fe (from 41 to 77m)
Drill Hole UI 035: 20m grading 61.1% Fe (from 35 to 55m)

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GRAVITY SURVEY TARGET AREAS / RAILWAY EAST
The Company has received a report from Hawke Geophysics Pty Ltd regarding the results of aground gravity survey over the Railway East target area, 3 km east of the main Railway prospect. Gravity data was collected on a 40m by 400m grid in the area. Based on a combined interpretation of regional aeromagnetic data and the newly acquired ground gravity data, Hawke Geophysics have defined a 3km long shallow Marra Mamba Iron Formation target as a Priority One drill target area (see Fig 1). In addition, the survey has defined two gravity anomalies as buried hematite detrital targets (Fig 1).

An initial 20 hole drill program of up to 3000m of RC drilling is expected to commence in thesecond week of July.

 

[Markcoinoz]

Hi Broadside,

UMC is by far the best I/O play in the Pilbara.

That might be a big statement.
However, they have continued to show amazing results in not only the Railway Project, but also there other projects.

Yet this appears to be only the beginning of the story.

Massive upside.

Anyway, i know where my money is on.

Just looking at the Railway East area, it looks about 1 1/2 times the size of the main Railway Project.

I think they have hinted all along that the Railway's Maiden Jorc result will be alot higher than their initial target of 100mln tns.

How high??

That is the big question.

Then we have the other targets including Yandi Headwaters which could host a massive resource.

By far the most exciting iron ore stock to be in.

Cheers markcoinoz

 

[doogie_goes_off]

Looks like one of the best plays in an overall bullish I/O market whilst other base metal and precious metal stocks get caned. Quality results, quality share price appreciation.

 

[Broadside]

yes doogie the Railway target alone will be 100m(ish) tonnes high grade low impurity DSO. Logistics is the key now but the quality of the resource will give them plenty of options

- 100km rail spur to FMG
- mine gate with BHP

? who knows, Railway ore can be a win-win for other major parties so a favourable deal could be cut.

Railway alone it's great value but then there's Railway East, Yandi Headwaters, Jumbo Junction and who knows, bauxite with Norsk.

This is the best spec I have ever seen and the story is getting better.

 

[the veg man]

hopefully this stock can get me to the bahamas. Wish I had held some of the stock I sold. Any way dont worry BE HAPPY. The UMC story geys better and better.

 

[spectrumchaser]

Hi Markcoinoz,

The "Ocean Equities report" you posted back in March led me
to holding this stock.

Sure looks like interesting times ahead

so Thanks a Million mate !!!

 

[michael_selway]

Hi Markcoinoz,

The "Ocean Equities report" you posted back in March led me
to holding this stock.

Sure looks like interesting times ahead

so Thanks a Million mate !!!

Yeah this company has done well

Wish i had some

thx

MS

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[Gekko]

2008 looks to be the year of UMC. Quick question: are we now capped larger then FDL? Must be getting close if not surpassed

 

[grace]

2008 looks to be the year of UMC. Quick question: are we now capped larger then FDL? Must be getting close if not surpassed

Shares and options on issue 153 million odd. SP = $2.55
MC = $390 mill (correct me if I'm wrong). Options expire 31/7/08.

Don't know how to value this one yet. Bauxite deposits - haven't studied yet.

Market seems to be valueing the iron ore that they know is drilled.

Although, if initial jorc is 100 - 150 mill tonne high grade, low impurity DSO (which looks like coming from drill results), could still be some upside. Say at $5 tonne, we get $500 - $750 mill. What do others think?

 

[Broadside]

Shares and options on issue 153 million odd. SP = $2.55
MC = $390 mill (correct me if I'm wrong). Options expire 31/7/08.

Don't know how to value this one yet. Bauxite deposits - haven't studied yet.

Market seems to be valueing the iron ore that they know is drilled.

Although, if initial jorc is 100 - 150 mill tonne high grade, low impurity DSO (which looks like coming from drill results), could still be some upside. Say at $5 tonne, we get $500 - $750 mill. What do others think?

in ground values aren't the ideal way to value iron ore because it depends on logistics and grade/quality but a $5/tonne value seems very reasonable (conservative). They are doing a scoping study at 2mtpa/5mtpa and 10mtpa and various options including road haul early on and a rail spur coming later. Once the scoping study is released we'll be in a better position to judge but at 5mtpa that would be big cash flow relative to their current market cap. I look at it this way - on the Railway resource alone and its potential profitability - the stock is still compelling value.

But then you have additional targets which if the probabilities win out, will dwarf Railway in time.

I couldn't put a value on the bauxite, too many uncertainties.

A deal on the logistics side is the key, the resource itself is in the bag, and quality. They are aiming for production in 2009...would have to be late 2009 I guess. Then the focus would shift from in ground value to forward earnings.

The Ocean Equities Report is the best summary and it's still relevant, although we've had significant exploration success since then.

 

[frogen]

Absolutely correct Broadside. The real key to this project is the logistics and I suspect they have a plan already. The dirt is a given. Some legs left in this one

 

[Gekko]

Shares and options on issue 153 million odd. SP = $2.55
MC = $390 mill (correct me if I'm wrong). Options expire 31/7/08.

Don't know how to value this one yet. Bauxite deposits - haven't studied yet.

Market seems to be valueing the iron ore that they know is drilled.

Although, if initial jorc is 100 - 150 mill tonne high grade, low impurity DSO (which looks like coming from drill results), could still be some upside. Say at $5 tonne, we get $500 - $750 mill. What do others think?

Your numbers are very fair grace. However, I do think the market is expecting a lot more then 100mt. The results yesterday were nothing short of phenomenal.

 

[Markcoinoz]

Yeah this company has done well

Wish i had some

thx

MS

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Hi Michael_Selway,

Its still not too late to get UMC.

The initial Inferred Jorc for the Railway Project will be the catalyst.
We should be looking at $3-$5 mark.

The company has already said that we will have an Indicated Jorc followed by the Scoping Study end of July. That should also elevate the price.

On top of that, they will be continuing their drilling campaign at the Northern Flank - Railway East - Jumbo Junction & Yandi Headwaters and releasing updates as they become available.

By far the cheapest entry point for a slice of UMC at the moment would be to buy THXO which has a strike price of .19 cents and expires June 2009.

THX are the biggest shareholders 16% 20.4mln shares.

Where the value will start to come into play will be when more drilling is done and instos start seriously looking at UMC after the JORC.

Ocean Equities has already made it very clear that they are running with UMC.
This has opened the door for overseas investors. Similar to the recent placement for the Arabian Prince who has bought 8% of the company, i would expect more placements over the coming months given the interest that UMC will achieve. UMC has proven to be a very tightly held registry and this is one way to inject more funds without Capital Raising.

After the Initial Jorc, Ocean Equities will be putting out a new report.

One of the other things which is becoming very interesting.

Have you noticed many of the Pilbara Fe hopefuls have formed alliances and have promoted backing FMG for the Railways to be opened up?

UMC has done no such thing.

Also, if you look at this link you will notice that BHP has double pegged some of UMC's tenements on the 11th June for a Railway with Design , Plan, Maintenance,Infrastructure.

Now why would they do that?

Also noticed, there has been no objections coming from UMC.

http://www.magicmetzgers.com/pdf/https___emits.doir.wa.gov.au_emits_enquiry_report_report.pdf

Could it be for future MGS?

Finally, this is what was written in an article with BHP's response.

http://www.thewest.com.au/default.aspx?MenuID=32&ContentID=80214


"Although Rio and BHP do not want to co-operate with other miners, they consider haulage far less threatening to their businesses than allowing third-party trains on to their tracks, which they claim will cause billions of dollars of damage."


Whilst all the other juniors are jumping over themselves with the alliances and supporting FMG to open up the railways this little company i believe will do a deal with BHP.

Why would BHP do a deal with a minnow?

1) Its high grade low impurity Marra Mamba Fe (DSO)
2) BHP's willingness to deal with MGS rather than allow them to use its Railway.

We shall see.

Cheers markcoinoz

 

[grace]

Hi Michael_Selway,


Also, if you look at this link you will notice that BHP has double pegged some of UMC's tenements on the 11th June for a Railway with Design , Plan, Maintenance,Infrastructure.

Now why would they do that?

Also noticed, there has been no objections coming from UMC.

http://www.magicmetzgers.com/pdf/https___emits.doir.wa.gov.au_emits_enquiry_report_report.pdf

Could it be for future MGS?


Cheers markcoinoz

Could you just explain that to me (late and tired) . L47/256 Mitsui Iron ond application by BHP. Sorry, just started to research this company last night. Thanks Grace.

 

[Markcoinoz]

Could you just explain that to me (late and tired) . L47/256 Mitsui Iron ond application by BHP. Sorry, just started to research this company last night. Thanks Grace.

Put simply.

They are planning on constructing a Railway on UMC's tenements of which are very close to BHP Area C. UMC has obviously been in talks with BHP as there was no objection by UMC for a construction of a railway on their tenements even though BHP are fighting tooth and nail with RIO not to have the Railway system opened up for the juniors.

Gate Sales are one of the most important talking points for any of the juniors to get Ore to their Customers. If UMC strikes an early deal with BHP for Gate Sales of their Railway Prospect, that would put them way ahead of the other companies currently forming alliances in the hope of RIO & BHP opening up their Railways.

We may find out in the next month or two.

Cheers markcoinoz

 

[Markcoinoz]

Hi Markcoinoz,

The "Ocean Equities report" you posted back in March led me
to holding this stock.

Sure looks like interesting times ahead

so Thanks a Million mate !!!

No Worries Spectrumchaser,

They will be updating their report once we have received the Jorc.

Hope you make a Million.

Cheers markcoinoz

 

[Broadside]

Yes UMC is keeping its options wide open and not ruffling any feathers...why burn bridges and take sides in the rail access debate if it isn't necessary? they have a quality deposit which is a win/win for 2 or 3 other parties.

 

[grace]

Put simply.

They are planning on constructing a Railway on UMC's tenements of which are very close to BHP Area C. UMC has obviously been in talks with BHP as there was no objection by UMC for a construction of a railway on their tenements even though BHP are fighting tooth and nail with RIO not to have the Railway system opened up for the juniors.

Gate Sales are one of the most important talking points for any of the juniors to get Ore to their Customers. If UMC strikes an early deal with BHP for Gate Sales of their Railway Prospect, that would put them way ahead of the other companies currently forming alliances in the hope of RIO & BHP opening up their Railways.

We may find out in the next month or two.

Cheers markcoinoz

Mind my ignorance, I'm still learning about this one. Where is L47/256 per application, as then I checked to UMC plots, I couldn't find it. Thanks Grace.

 

[frogen]

Put simply.

They are planning on constructing a Railway on UMC's tenements of which are very close to BHP Area C. UMC has obviously been in talks with BHP as there was no objection by UMC for a construction of a railway on their tenements even though BHP are fighting tooth and nail with RIO not to have the Railway system opened up for the juniors.

Gate Sales are one of the most important talking points for any of the juniors to get Ore to their Customers. If UMC strikes an early deal with BHP for Gate Sales of their Railway Prospect, that would put them way ahead of the other companies currently forming alliances in the hope of RIO & BHP opening up their Railways.

We may find out in the next month or two
Cheers markcoinoz

As far as I can see, gate sales is the ideal option and a very real possibility. AXO have just sured up port access for 6 m/t per year from 2010 onwards, ramping up to 10 m/t. According to the media release by the government, this takes the capacity accounted for up to 16.5 m/t per annum. The new facility is only capable of 20 m/t so there is little room for others like UMC.
Gate sales with BHPB in theory,would see dirt on the boats quickly on existing modern handling systems. No queing for shiploading access as there will be at the PHPA berth. This scoping study is going to be very interesting.
I hold

 

[Markcoinoz]

Mind my ignorance, I'm still learning about this one. Where is L47/256 per application, as then I checked to UMC plots, I couldn't find it. Thanks Grace.

Grace,

I gleened this from AUBoat from another forum.

He sums it up much better than i could.

Is UMC negotiating a double wammy rail infrastructure play?

L47/256
This rail infrastructure corridoor starts exactly over the Jumbo project where a large area has been defined (ie. the rail 'loop'). This rail infrastructure licence starts to move in a Southeast direction for approx 10km then vears East for approx 30km through BHP's Soutern Flank deposits. It then vears in a Northeast direction to the Port Headland / Newman rail.

L47/257
This rail infrastructure corridoor starts directly to the east of the Railway East prospect on UMC E47/1429 where a large area has also been defined (ie. the rail 'loop'). This rail infrastructure corridoor then moves in a North-Northeast direction for approx 25km then moves in an eastly direction for approx 20kms, where another large area has been defined in conjunction with the Yandi deposit. The corridoor then does a dog-leg turn for approx 25km before joining the Port Headland / Newman rail.

The rail infrastructure corridoor approx distances:
L47/256 - 93km
L47/257 - 70km

Remember:
1. Railway prospect should contain from 100 - 200mt of ore.
2. How much is in Railway East?
3. Better still, how much Channel Iron is there in the Yandi Headwaters?
4. Judging by the size of Railway and Jumbo magnetic structure, Jumbo has the potential to be between 2 and 3 times larger than Railway

Within the next few years, UMC could potentially JORC 400mt.

Thoughts....
1. It appears that negotiations has taken place with BHP in conjunction of 1 or 2 rail spurs
2. Will there be 2 rail spurs?
3. If there was 2 spurs perhaps UMC fits the bill for the 70km rail (approx $350mil) and BHP fits the bill for the 93km rail ($465mil) and both UMC/BHP have full access to both spurs....

win-win situation for both parties......

UMC could easily rail 10mt per annum minimum..... 40 year mine life @ 10mt per annum on the assumption that UMC JORC's 400mt from all deposits...


Cheers markcoinoz