Australian (ASX) Stock Market Forum

YML - Yilgarn Mining

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Yup. Not a lot of evidence of any new buyers on the scene. The stock has always been impervious to increases in commodity prices, even when the gold price went up 30% and they were a producer. It really is an unknown entity out there.
 
With Nickel hitting $20lb I have completed an updated research sheet on YML, note I have also forwarded a copy of this to Tim Boreham of Criterion as he may be doing a piece on the Iron Ore Sector,

Just goes to show YML is arguably one of the most undervalued Juniour Resource plays out there

YML Fundamental Analysis​

Mkt Structure
Shares
60m + 20m 25c 30/6/07 options
Fully Diluted Mkt Cap
@20c = $12m Current
@30c = $24m
@40c = $32m
@50c = $40m
@$1 = $80m Target

Cash
$4.5m + $5m if options are exercised

Projects
1. Rose Dam
Used this Gold project to generate $6.6m in cash, good cash cow and shows management knows how to get a project going

2. Irwin Hills JV YML-40% MRE-60%, Nickel, In W.A.
JORC 20Mt@ 1%Ni (Nickel) + 0.12%Co (Colbat)
High levels of Chloride so having trouble getting MRE to agree to Toll Treatment at its Murrin-Murrin Plant, although its Laterite Nickel its not that bad as MRE is the Laterite King!
MRE stated in their last Qtrly that "Preliminary mining studies are underway to determine the viability of direct trucking of ore to Murrin Murrin plant"

3. Carr-Boyd YML earning 51% from TIR (Now part of CSM Cons-Min) can earn up to 90%
JORC 600Kt's@ 1.4%Ni + 0.5%Cu all within 100m of the surface so open pittable!
Using an EV of $5 lb Nickel and $2 lb Cu this first pass JORC gives the deposit an In Ground Value of over $150m
A full scoping study type feasibility report is due "April 07"


4. Marillana 100% interest, Iron Ore, In W.A. 2kms from BHP’s Brockman Deposit 225Mt@ 60% Fe This project is the SPEC KILLER! Its an Iron Ore tenement 2kms west of the Brockman Deposit (225Mt@ 60% Fe) Its old Hamersley Ground who outline a STRIKE OF 10KM's! Grading an avg 60% Fe! Width is probably 350m avg and thickness of the Iron Ore is 15m.
Hamersley walked away from it 20years ago because the deposit is not at surface, its covered by 50m of top soil which is bad as it will add to the cost of extraction, however I believe the last 3 Iron Ore price increases now nullify the cost increases of the top soil.
Moreover the Sheer location of the deposit is incredible, its surrounded by BHP, RIO, FMG and Hancock Mining!
What’s also very important is that BHP's Railway runs through the deposit, so YML could feasibly only have to dig it up and truck it 2-3kms to the BHP Rail Line which runs straight to the Ports and given FMG's recent win in the Courts to use BHP's line I can't see why YML can't as well.

Initial JORC Estimate was 30Mt@58.4%Fe but this was from a very small portion the lease,
I estimate it could be as big as 10kms x 350m wide x 15m thick = 240Mt@58%Fe
Follow up drilling to increase the JORC to happen in April

5. Other Spec projects
East Sunrise 100% interest, Gold, 35 kms south of Laverton
Historical exploration has returned promising drill intersections including 14m at 10.2 gpt gold. Further drilling is planned for early 2007. Just food for thought.


Kanowna South Earning 70%, Gold, W.A. Drilling to commence shortly,

Plumridge Earning 60%, Mineral Sands, W.A.
JV with Western Areas
Looking to do some drilling in 2007

Byro Farmed out 70% Free carried 30% up to $1m exp, Nickel & Copper, W.A.
Mithrill farmed in and should do some drilling by 2nd Qtr 07, following up on oxide intersections of Nickel & Copper,

Ravensthorpe 100%, Base metals, W.A. Grounds near BHP's Ravensthorpe project, apparantly prospective for Zinc/Lead,


Attributable Value
Irwin Hills @$2.50lb Ni =$50m, YML 40%= $20mRemember Laterite (low grade) No Cap-Ex as can be treated at JV partner MRE's Murrin Murrin Plant,

Carr Boyd @ $5lb Ni + $2lb Cu = $150m, YML's up to 90%= $135mJV with Cos Min, Excellent Open Pittable Options and scoping study due very soon!

Marilliana 30Mt @ $5t= $150m,
Elephant Ground, possibly only 5% of total size, excellent Infrastructure with BHP Rail Running Straight passed deposit! 50m of top soil, drill results due soon.

Total = Approx $300m or $3.75c a share
 
Yep, the market has been asleep on YML for a while despite the Ni price movements - a few YML spikes but the sellers slowly chased the buyers down.
 
What gets me is ignoring everything else, Marilliana's current JORC ie 30Mt valued at a measely $5t (margins are closer to $30t but anyway I always prefer to be overly cautious) gives an NPV of $150m = $2 a share almost,


Let me crunch the numbers a wee bit more accurately,

30Mt@58%Fe = 17.4Mt of Iron Ore

Fe Price = $80t
Cost of extraction = usually $20-$40/t but I'll say $60/t

Margin = $20/t

Margin on Iron Ore = 17.4t Fe x $20/t = $350m approx

Assume Cap Ex = Probably $50m at most (No need for rail, just crushing plant and small benefication plant) but say $100m

NPV = $350m - $100m = $250m = $3 approx

I mean the numbers are huge!

I'm quite sure it will attract a Chinese JV partner for a 51% interest, wait and see
 
YML has been quiet of late. Can't understand why with its vast array of interesting projects. One has to be patient with certain stocks.
DYOR
 
YOUNG_TRADER said:
Believe it or not I prefer cars over cribs,

I'd rather sleep in a new Lambo Murcielago V12 Yummy! sure you couldn't fit as many party girls in it, but at least it'd be alot easier to get rid of them when your done :p:
Click to expand...

Ooooh YT .........you do have a dark side. :D
 
greggy said:
YML has been quiet of late. Can't understand why with its vast array of interesting projects. One has to be patient with certain stocks.
DYOR
Click to expand...

I think thats because like me lots of peeps know that news isn't expected until April,

So while the smart money will accumulate now, most punters won't come back in until closer to April,

I hold alot of options and a few shares, but come closer to April I will start buying more stock (as will a few mates of mine), especially around the 20c mark,

What are peoples thoughts on Marilliana, surely the chinese are keeping an eye on YML now giving the first pass JORC, interestingly enough the first pass JORC was good enough to get YML a mention in Forbes, cooky!
 
YOUNG_TRADER said:
I think thats because like me lots of peeps know that news isn't expected until April,

So while the smart money will accumulate now, most punters won't come back in until closer to April,

I hold alot of options and a few shares, but come closer to April I will start buying more stock (as will a few mates of mine), especially around the 20c mark,

What are peoples thoughts on Marilliana, surely the chinese are keeping an eye on YML now giving the first pass JORC, interestingly enough the first pass JORC was good enough to get YML a mention in Forbes, cooky!
Click to expand...
I feel that the Marilliana Iron Ore Project is its most exciting project by far. Its location is excellent. If they get a Chinese JV partner, I'm just speculating at this stage, this stock could go well through the $1 mark.
The nickel projects continue to look very interesting. I'm waiting for a re-entry around the 20c mark.
DYOR
 
greggy said:
I feel that the Marilliana Iron Ore Project is its most exciting project by far. Its location is excellent. If they get a Chinese JV partner, I'm just speculating at this stage, this stock could go well through the $1 mark.
The nickel projects continue to look very interesting. I'm waiting for a re-entry around the 20c mark.
DYOR
Click to expand...

Couldn't agree more Greggy, especially when you compare it with the likes of POL, RHI, IOH, even JMS
 
YT,
Just a couple of points that may be of interest...
Any pit at Marillana is going to need a strip ratio of 4:1 after pit shaping.(BHP's nearby Yandi operation has a strip ratio of 0.35:1).
The decision for open access of the rail infrastructure is only at the first stage, it is now being appealed, I have no doubt that the big players will endeavour to stall/appeal as far into the future as possible. No JV will come forward untill this is finally settled I would think.
YML's initial assays indicate 0.88% P content... most buyers consider 0.8% the cut-off point for their furnaces, so apart from a Beni plant to bring the ore up to a minimum of 60% I would think blending of their High P ore with a low P ore may also be needed.
I'm out of touch with costs but I think $100m capex may be on the light side, apart from the processing plant there is also a FIFO camp, power supply and retic, stockpile and loader, loco's and ore wagons, and at the Hedland end land for a stockpile, unloader, bucket wheel reclaimer, conveyor systems and ship loader (unless this comes under the open access scheme?).
 
More info on the Marillana project....MiningNews...last month.

Yilgarn Mining says it has confirmed a "significant" zone of iron ore mineralisation with potential to host over 30 million tonnes of in excess 58% iron at its Marillana iron ore project in the Pilbara.

Additionally, Yilgarn said that it had received word that higher iron ore grades of 64% could be reached when calcinating or roasting the mineralisation.

The company said that drilling to date has confirmed continuity and grade of detrital iron ore mineralisation in the northwest section of its tenements.

Yilgarn's managing director David Burt said the estimated potential of the area to host over 30Mt was based on assessments and an average indicated intersection width of 14 to 15 metres.

"Significantly, the mineralisation remains open to the north-east," Burt said.

"In addition, we have recently received the results of a gravity survey over our tenement which has identified a number of anomalies of similar magnitude to this initial zone of mineralisation.

"We plan to carry out initial reconnaissance drill testing on several of these targets, with a drill rig booked to commence an initial program in April this year."

Burt said Yilgarn will be looking to progress Marillana this year due to its potential, and will also broaden its activity within the east and west Pilbara region following the granting of three additional iron ore exploration licences.

The additional licences have increased the company's total iron ore tenements in the region to over 500 square kilometres.

Marillana will be progressed in parallel to Yilgarn's Carr Boyd nickel joint venture, which has a resource of 618,000 tonnes at 1.4% nickel and 0.5% copper, and represents an in-ground value of some $400 million.
 
Hey Kauri,

Some very very interesting points there, thankyou for that,

I agree strip ratio will be bad due to 50m of top soil cover etc, but I kinda factored that in to my increased extraction cost = lower margins, I 'd say in todays Iron Ore environment a $5t margin seems too low, but I nevertehless was content in using it,

Re infrastrucutre, I would have thought open access allowed use of everything bar the actuall wagons, in any event I'm assuming the easiest option here is a JV with a party who may be able to blend Marilliana Ore with its own, remember RIO was willing to farm in to AQD's tenement prior to it getting **** results,

Also re Chinese JV they were willing to talk with JMS over their very early stage tenements I can't see why they wouldn't be looking at YML especially given the proximity of Marilliana to Brockman,

In short I agree with you, there are many many hurdles for YML to overcome at Marilliana, however I think that eventually it may become a 200Mt+ Deposit grading 58%Fe which would warrant the attention of the majors and regardless of the hurdles a SUBSTANTIAL RE-RATING IN THE SP, the drilling JORC expansion drilling in April will reveal alot for the future of Marilliana
 

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