YML - Yilgarn Mining

[stoxclimber]

Stock itself is being sold off at the moment. IMO if the extended correction fears prove to be unfounded (my opinion) we'll see money move back into these microcaps from the very ASF posters who have dumped them in panic over the last few days which should see the price of YML (and other micros) hike. However, theres downside risk exposure to an extended correction and also further selling esp with a limited buy depth.

 

[YOUNG_TRADER]

mmmmmmmmm ... incidentally Brockman is hundreds of K's away, Yandi is about 20K's..

Then what is that 2km's to the South? It does say Marillana Brockman Deposit 225Mt@ 60% Fe doesn't it? ? ?

 

[Kauri]

Then what is that 2km's to the South? It does say Marillana Brockman Deposit 225Mt@ 60% Fe doesn't it? ? ?

Yep, sure does, it is used here to describe a type of ore... but both the BHP and HI mines are called Yandi..(Yandicogina)

High phosphorus ores

Another serious problem is the phosphorus content of Australian iron ores.

'There are huge deposits of high-phosphorus Brockman ore in Western Australia that are close to existing infrastructure; however the high phosphorus levels make them more difficult to sell except in boom times,' says Dr Holmes.

Physical separation processes can remove some of the phosphorus, but substantial iron is lost in the process. Alternative approaches, such as heat treatment and leaching, are currently considered uneconomic, with the best option being to remove the phosphorus at the hot metal stage. This pushes the cost of removal onto the customer, although iron ore prices can be adjusted to take account of the additional process step.

For the mine identified as Brockman try this map...

 

[Mozart56]

With BHP mines and infrastructure all within a stones throw, along with Rio and Fortescue so close, you'd have to think it would be worth more to YML to sell it for cash, rather than spend months negotiating deals and building infastructure. Put it on Ebay and see what happens! I won't object to a $100M cash injection. That's short change for these guys (BHP, FMG, RIO) and with the infrastructre already in place or soon to be (as with FMG) it would have to be cheaper to buy a deposit next door rather than search for a new one. Everybody wins!

 

[Kauri]

With BHP mines and infrastructure all within a stones throw, along with Rio and Fortescue so close, you'd have to think it would be worth more to YML to sell it for cash, rather than spend months negotiating deals and building infastructure. Put it on Ebay and see what happens! I won't object to a $100M cash injection. That's short change for these guys (BHP, FMG, RIO) and with the infrastructre already in place or soon to be (as with FMG) it would have to be cheaper to buy a deposit next door rather than search for a new one. Everybody wins!

Who did prelim drilling on this lease, assessed it, and relinquished it so as allowing YML to pick it up??

 

[Mozart56]

Who did prelim drilling on this lease, assessed it, and relinquished it so as allowing YML to pick it up??

Well RIO have been known to do stupid things before

 

[Kauri]

Well RIO have been known to do stupid things before

Fair enough... they wouldn't be orphans on that...

 

[YOUNG_TRADER]

Who did prelim drilling on this lease, assessed it, and relinquished it so as allowing YML to pick it up??

Hamersley Iron,

What was the Iron Ore Price back then? ? ? ? ?

Do ya think a 200-300% price hike makes a difference? ? ? ? ?

 

[INORE]

Perhaps with BHPB explorations, BHPB make take a fancy to YML ground.

http://www.thewest.com.au/default.aspx?MenuID=159&ContentID=22584

 

[Mozart56]

Perhaps with BHPB explorations, BHPB make take a fancy to YML ground.

http://www.thewest.com.au/default.aspx?MenuID=159&ContentID=22584

You would have to think that a proven resource next door is worth more than an even larger one in no-mans land. They have to be asking the question wouldn't they?

 

[YOUNG_TRADER]

Who did prelim drilling on this lease, assessed it, and relinquished it so as allowing YML to pick it up??

Also on the point of relinquishing grounds, you have to feel for the company that sold PDN its Nambian U grounds for about $100k I believe, but then again the U price was about 1/4 what it is now,

Point I'm trying to make is yes companies do relinquish unprofitable deposits and grounds, but whats worthless one day may be worth Billions (literally in PDN's case) the next

 

[Kauri]

Hamersley Iron,

What was the Iron Ore Price back then? ? ? ? ?

Do ya think a 200-300% price hike makes a difference? ? ? ? ?

Steady on, just trying to add a bit of healthy balance to the research.
A very high strip ratio for iron ore of at least 4:1,
Low grade (for iron ore) of 58%,
High Phosphorous content (for iron ore) of 0.8% plus,
High cost for pit development, remember the 4:1 ratio, (see how much change you get from $2,000,000 buying a single 120 ton Haulpak), let alone a fleet, hydraulic excavators, et al,
Processing plant, is it fines or lump, will they need a Beni plant, will they have to lower the P content?
Loco's and wagon rakes, wagon dumper, stockpile conveyors and stacker, bucket wheel reclaimer.....,
Under EPA regs for the Marillana area pits have to be backfilled, i.e. all that 4:1 strip mullock carted back from the waste dump...
Cost and availability of labour force, camp and facilities.

When back of the envelope BFS's are done shouldn't everything be taken into consideration???
Don't forget the big miners cashing in on the ore price increases already had sourced and paid for all their infrastructure at pre ore-increase prices....

And no, I am not downramping, just pointing out that at this stage in time YML's Marillana carries considerable risk alongside potential rewards. To present it any other way is irresponsible at best......

 

[Mozart56]

Also on the point of relinquishing grounds, you have to feel for the company that sold PDN its Nambian U grounds for about $100k I believe, but then again the U price was about 1/4 what it is now,

Point I'm trying to make is yes companies do relinquish unprofitable deposits and grounds, but whats worthless one day may be worth Billions (literally in PDN's case) the next

Indeed. Hammersly didn't even test drill the best parts. They left great chuncks of the tenament untested, and ironically the untested areas are the ones that look the most propsective!

 

[INORE]

If they got an offer from BHP to truck it to their processing plant (as BHP are offering the CAZ tenemant, if they get it from RIO) the overheads may not be so bad.

 

[noirua]

Http://www.earthscienceworld.org/images/search/lightbox2.html?ID=iamcgo

A bit more about iron ore in the Marillana region - just to add a healthy balance, as suggested by kauri.

 

[noirua]

To get a better understanding of Marillana, and of course, maintain a healthy balance. We should look more closely at: http://www.yilgarnmining.com.au/ASX/YML presentation January 2007 low res.pdf

 

[skegsi]

High Phosphorous content (for iron ore) of 0.8% plus

Hi Kauri
You sound like you know your shiz about mining. What do you do?
In their preso they say .08% P. Does this make any difference ? or is this what you were saying?
From what you were saying about costs what do you think would be a reasonable margin?
At face value do you think that the Marialliana project is a good one at this stage?

cheers

 

[Mozart56]

Kauri I think everything you said lends itself to YML farming out or not doing it. Lead times just assemble that kind of infrastructure in today's market could be years. Mind you a 50% discount to the PV of the deposit still puts us way ahead.

 

[kransky]

change in directors interest announcements in the last 2 months speak volumes to me.

 

[YOUNG_TRADER]

Kauri couldn't agree with you more mate a balance is required and yes there's lots of development risks etc for YML but far far less than JMS,

Moreover yes the mining cost would be huge for Marilliana, but don't you think a $5t gross profit figure per t ore which should sell at $80 takes this into account? ie assumed cash costs of $75t

Personally I think YML is way ahead vs the likes of TRF, JMS, POL and others in the Iron Ore game

I just look at it like this, for the past 18months I have done my best to unearth really undervalued stories, MTN, BSM, GOP, JMS, BCN and most recently HLX,

But in my honest opinion except for MTN, none of them offer the potential upside YML does,

It has 3 really good projects, excellent management who have developed a project (which HLX and JMS lack) and a very very small share structure/mkt cap which offers amazing leverage,

I really appreciate your technical view points on the mining aspects and do realise that considerable develpment risk is present etc, however you asked "Who did prelim drilling on this lease, assessed it, and relinquished it so as allowing YML to pick it up??" Which can be read to imply things don't look that great at Marilliana and all I did was ask another question which was what was spot price of Fe back then that made the project unviable? Fair enough don't you think?

Anyway I think YML will be a standout play come April-June (but there is always Sell in MAY risk)

Lets keep up the balanced discussion