VRE - View Resources

[YOUNG_TRADER]

Hmmmm this is sounding more and more interesting Mick,

If their plant and equipment is worth $100m = 23c alone
Then buying VRE under say 20c is like buying MEO at under 20c ie their trading below net asset (in MEO's case cash) value, let alone the project value of $150m = 34.5c

Like I said the 2 best parts for me given their a gold producer is

1. NO HEDGING =

2. NO DEBT =

Nice find Mick

 

[mick2006]

Good to have you aboard YT.

Kennas this is for you in regards the possibility of a larger discovery in the immediate area around the Bronzewing Treatment Plant.

Just doing some research on the surrounding area around the Bronzewing Treatment plant and dug up a quote from VRE's Managing Director Tim Gooch "there are probably 40-50 operations in the region that could use our process, production, camp and services facilities � millions of ounces, albeit many not JORC compliant and not particularly advanced, but with ore that we can process."

Just looking at that statement it looks like VRE will have little trouble making sure the treatment plant is running at full capacity. And infact it certainly gives VRE plenty of options going forward, I'm sure they are already eyeing off the best targets with high grade surface ore a priority.

 

[So_Cynical]

VRE - View Resources
Have been value for a long time...is the band wagon starting?

Should we all jump on?

 

[mick2006]

VRE - View Resources
Have been value for a long time...is the band wagon starting?

Should we all jump on?

hey So_Cynical, VRE is just one of a number of extremely undervalued producers out there, the recent sell down was due to market sentiment and confusion over the sale of their stake in the Carnilya Hill Nickel project, but as YT rightly highlighted VRE received up front pretty much the whole NPV value of the project, which in turn will let them retire debt and step up exploration/production.

with the quarterly report due any day now, expect a strong rally on any positive production news from Bronzewing, the brokers that cover the stock Patterson's, Hartley's and Fat Prophets will all update their recommendations once consistent production has been acheived.

 

[mick2006]

Looks like the market really liked the quarterly update, volume spiking and close to breaking out higher. Like I was saying before all the brokers were waiting for was confirmation of production targets being met and know the quarterly has confirmed that, expect to see some upgrades from Patterson's, Hartley's and Fat Prophets.

With gold production rising and costs coming down its a perfect storm for VRE.

 

[Sean K]

Looks like the market really liked the quarterly update, volume spiking and close to breaking out higher.

I like the words 'unhedged' and 'no debt' !!

While's it seems undervalued, where's the multibagger potential? Are they going to unearth the next Superpit? Or, is this a steady as she goes, worth a few % type job? Perhaps the latter. Having some good fundamentals is a nice change at the lower end of the gold sector.

Chartwise, may have seen a bottom but need to see a higher low for a start. Would be nice if that was the bottom!

 

[MS+Tradesim]

I read all recent announcments, broker reports, presentations, POG etc, did the maths based on more conservative assumptions than Mick and YT used and still concluded that VRE is currently selling for less than net tangible assets backing. Margin of safety here is excellent. So I'm in.

Thanks Mick.

 

[mick2006]

it is certainly one of the better turn around stories on the ASX at the moment, I think a lot of investors both retail and institutional were waiting for confirmation that the production had reached target and as soon as the quarterly was released we saw a spike in volume and price which leads me to believe it is more institutional buying than from the retail community.

what is really important to VRE is the plant and infrastructure, they are now in a position where they will be generating profits of say between $25-55 million per annum depending on gold price which I have no doubt will be put to good use for both exploration and takeovers of the most promising near term production sources around the Bronzewing Plant.

 

[YOUNG_TRADER]

I read all recent announcments, broker reports, presentations, POG etc, did the maths based on more conservative assumptions than Mick and YT used and still concluded that VRE is currently selling for less than net tangible assets backing. Margin of safety here is excellent. So I'm in.

Thanks Mick.

Yeah same reason why I bought some,

I like buying stuff thats trading below NTA that offers upside from projects in the pipeline

An update from Fat Prophets would be good

 

[dj_420]

Yeah same reason why I bought some,

I like buying stuff thats trading below NTA that offers upside from projects in the pipeline

An update from Fat Prophets would be good

From here these guys look like no brainer, jumped in this morning.

I gotta love a gold producer unhedged and debt free!!! We get the company for the price of cost of equipment, the rest of the company comes with upside potential.

Chartwise still at the bottom of a recovery, suprised this gold stock hasnt run yet.

 

[mick2006]

From here these guys look like no brainer, jumped in this morning.

I gotta love a gold producer unhedged and debt free!!! We get the company for the price of cost of equipment, the rest of the company comes with upside potential.

Chartwise still at the bottom of a recovery, suprised this gold stock hasnt run yet.

Welcome aboard DJ_420, the only real reason that it hasn't run any further is the constant 500k sell orders over the past couple of days, if that sell volume wasn't there it would have run much harder. But as everyone would know once that volume starts to dry up and the buy pressure is still building that is when the explosive upside move will begin.

The catalyst for this will be the updated broker reports and I have no doubt we won't have to wait too much longer for some new research reports now that we know production and costs are on schedule.

 

[barrett]

This one has been a long time personal holding of Fat Prophets..

Thanks for the great fundamental analysis you did Mick..
They may not be an obvious takeover target yet.. but that's OK as they can get on with production on their own, and they're a value investment in the gold sector.. and those are mighty hard to find.

With the cash flow and the infra sorted, any kind of discovery or local acquisition should lead to a major re-rating, like w Dioro.

My only remaining question would be on management, I'm not familiar with that aspect, anyone had a chat with MD Tim Gooch lately?
cheers

 

[mick2006]

Looks like a few weak holders want to get out before the long weekend, may present a good entry point/top up point for those who want to gain a cheaper entry.

Expect the markets to remain firm in the US tonight given the massive boost provided by the Microsoft profit upgrade, meaning the rally may continue on the ASX early next week.

 

[porkpie324]

Browsing through the Dec quarterly the receipts were 22.8 mil with production costs at 19.5 mil & admin at 1.5mil. Now these figures will improve as production ramps up but I feel in this current market until this happens the SP won't do to much.prkpie

 

[mick2006]

Looks like VRE is being held back by the overall market weakness today, given the large rise in gold over the last few days and the recent quarterly confirming they are on target to meet production of 120,000 oz's per annum its surprising that it hasn't moved a little further up.

 

[moneymajix]

From the Inside Trader

29 January

During this volatile time, this week we have decided on an unhedged gold producer with no debt. They are on track to be cash flow positive this year with a target production of 120,000 oz's per annum.

This stock appears to be oversold and we can see smart money entering this stock right now.


18.5c.

 

[mick2006]

VRE is certainly a favourite gold junior of several brokers/tip sheets, seems to be having trouble breaking above that 19.5c mark at the moment, might need some exploration news or a record production month/profits to break higher, but at least it has started its climb higher after the recent sell off.

 

[Aussiejeff]

Browsing through the Dec quarterly the receipts were 22.8 mil with production costs at 19.5 mil & admin at 1.5mil. Now these figures will improve as production ramps up but I feel in this current market until this happens the SP won't do to much.prkpie

You could be right.

BTW, does anyone know what the "number of conditions" are referring to in the HOA for VRE to sell it's 30% of Carnilya Hill to MCR? Would these be "defeating" conditions that have the potential to block the deal from going through? I've had a look at some of both companies' announcements on the deal, but can find nothing that actually specifies what these "conditions" might be.

I also don't see any proposed date of settlement of the cash deal either. Might it be this month or next month? Who knows? It would be nice to have a settlement date to work to! I don't see "real" money coming back into the stock until the actual settlement of that first $22 million is announced as having occured. From that day on, VRE will be out of what I perceive to be a looming short term cash flow problem. But ONLY if the deal actually proceeds. Can it fall over before settlement? Fingers crossed it all goes smoothly...


AJ

 

[Aussiejeff]

I found this in the Quarterly Report 31/10/07:

"As a result of the delays experienced the Company has entered into an agreement with its banker to undertake a review over a four month period . The combination of the introduction of the Discovery resource, the larger cutback of the Central pit and the previous delays in project ramp-up mean that the original Life of Mine Plan and Base Case Model agreed with View’s bankers no longer fully reflects View’s current position. As a result, View is working with its bankers to agree an updated Life of Mine Plan and Base Case Model. As part of this process, View’s bankers have the right to conduct a review of the facility and, on 28 February 2008 at their discretion, to request changes to the loan facility or to demand repayment of the facility."

Hmmm. In that case, I hope the MCR deal is settled well before 28 Feb 2008. Unfortunately, the delay in getting up to higher production in a shorter timeframe has lead to VRE being in a cash squeeze situation (at end of Feb), just before the Bronzewing production levels will get to a point where the debt would be fully covered anyway (around March/Apr). Hopefully the bankers are lenient folk if the MCR deal falters...

AJ

 

[porkpie324]

Sometimes caution is needed when reading brokers recomendations, now I'm not saying don't take into account what they write, but just remrmber BMA gold brokers raved over this gold miner especially Fat Prophets, then one day BMA announced the mine was'nt viable, the shares were suspended and the rest is history, porkpie