YML - Yilgarn Mining

[noirua]

No worries, this stock seems to be set to move gently upwards today. Worry thee not, there shalst nerebee a 15 cent trade folks.

 

[YOUNG_TRADER]

After seeing RML's phenomenal rise on upcoming Nickel production I can't wait for the mkt to realise YML's value,

@ 50c RML's mkt cap = $100m, for a $100m mkt cap YML SP = $1.25c


RML is proposing to....... "The agreement will result in 5 million tonnes of Acoje’s surface nickel laterites being mined over the next five years under a profit sharing, partnering contract signed with DMCI, one of Manila’s most prominent and growth orientated contractors and developers.
The agreement has the effect of sharing with DMCI 50:50 all net profits from the sale of the mined laterites at Acoje, The initial mining will focus on the high iron, (>40% Fe) low nickel (>0.9% Ni) ferro-nickel limonite that is currently commanding premium prices of around US$18-29 a tonne."

So 5Mt (over 5 years) @ US $30/t = $37.5 AUD
5Mt @ $37.5 = $190m 50:50 = $95m


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!
Now using an AUD Nickel price of $25lb (US $20lb) and an AUD Copper price of $3.75 (US $3)

Each lb of ore is worth 1.4%x$25 + 0.5%x$3.75 = 36.8c lb

Each tonne of ore is worth $0.368c x 2200 = $809

Assume an extraction and processing cost of say $400t

Margin = $409/t

Possible NPV = 600kt's @ $409t = $245m

As YML is earning up to 90% Net to YML = $220m

And remember this is only 1 of 3 projects!

YML has a bright future aheah and although it has taken a few months since I first discovered it (Dec 06) I firmly believe that it is by far the most undervalued resource stock I have ever come across offering huge leverage especially for success at Marilliana while downside risks remain limited

 

[Mozart56]

As YML is earning up to 90% Net to YML = $220m

And remember this is only 1 of 3 projects!

If the feasability study has numbers that even approximate these figures, it will be happy times ahead. YT has been very conservative here.. NPV could be more. For me the greatest potential is Marilliana. The results of further exploration here are unlikely to eventuate before June, but could dwarf the Ni prospects. YT, care to put an estimate on what that might be? Particularly if the subsequent drilling identifies 300M T instead of the already identified 30M T?

 

[gringokonyo]

Particularly if the subsequent drilling identifies 300M T instead of the already identified 30M T?

300MT would be nice, although I'm expecting a more conservative figure of about 120 to 150MT, based on an average 6 metre depth ( I think this is the amount YML quoted for one of the HI drill holes that is in the new drill zones).

Anyone have any idea what would be a minimum amount of resource to make establishing this mine feasible (is 30MT enough?) and what would be a reasonable amount of annual ore production?

 

[YOUNG_TRADER]

Here's what CGM did to get value out of its Nickel projects,

In August 2005, Cougar sold the Toomey Hill Nickel Project to the Murrin Murrin Joint Venture for $6.5 million when the spot nickel price was approximately US$12,500 per tonne. The spot nickel price is currently at approximately $US50,000 per tonne. Toomey Hill contained a high-grade Measured & Indicated Resource core of 1.04 million tonnes at 1.42% Ni and 0.102% Co (1.2% Ni cut-off).

Now YML is already part of the Murrin Murrin JV, its Irwin Hills is next door to MRE's Murrin Murrin plant, if MRE paid $6.5m in 2005 fora 60% interest in 1Mt@ 1.42%Ni + 0.102%Co,

Then its safe to say YML's 40% interest in the Irwin Hills JV (YML40% MRE60%) which is a JORC 20Mt@ 1%Ni (Nickel) + 0.12%Co (Colbat) is worth a hell of alot more, for starters the deposit is 20x the size, its closer to MRE's Murrin Murrin plant and the Nickel price is about 5x higher now than it was back then

Irwin Hills should generate margins of $15lb Ni = $33,000/t
NPV = 20Mt@1%Ni = x $33,000/t = $6.6 Billion Dollars!

Net to YML $2.64 Billion

 

[Mozart56]

Net to YML $2.64 Billion

... and corresponding share price $32.50?

 

[Crash]

Well, holding shares in this I like the way you are all talking. Then the saying I hear again and again, "if it sounds too good to be true - it probably is" keeps ringing back to me. There always needs to be an exception to prove the rule though, and I hope this is it - in a big way.

 

[noirua]

Here's what CGM did to get value out of its Nickel projects,

In August 2005, Cougar sold the Toomey Hill Nickel Project to the Murrin Murrin Joint Venture for $6.5 million when the spot nickel price was approximately US$12,500 per tonne. The spot nickel price is currently at approximately $US50,000 per tonne. Toomey Hill contained a high-grade Measured & Indicated Resource core of 1.04 million tonnes at 1.42% Ni and 0.102% Co (1.2% Ni cut-off).

Now YML is already part of the Murrin Murrin JV, its Irwin Hills is next door to MRE's Murrin Murrin plant, if MRE paid $6.5m in 2005 fora 60% interest in 1Mt@ 1.42%Ni + 0.102%Co,

Then its safe to say YML's 40% interest in the Irwin Hills JV (YML40% MRE60%) which is a JORC 20Mt@ 1%Ni (Nickel) + 0.12%Co (Colbat) is worth a hell of alot more, for starters the deposit is 20x the size, its closer to MRE's Murrin Murrin plant and the Nickel price is about 5x higher now than it was back then

Irwin Hills should generate margins of $15lb Ni = $33,000/t
NPV = 20Mt@1%Ni = x $33,000/t = $6.6 Billion Dollars!

Net to YML $2.64 Billion

Hi Y_T,
On the above, I note that direct trucking to Murrin Murrin, for processing, is part of a viability study. YML, of course, only being responsible for managing exploration.

Isn't this part of a Hydrometallurgical Project, as at Murrin Murrin, and therefore using Sulphuric Acid in High Temperature, High Pressure autoclave vessels, to Heapleach Nickel and Cobalt from low grade lateric (oxidised).
I believe that the 18 superheaters were upgraded about a year ago.

 

[Ken]

What are we making of the options at present?

Is it at 25 cents in June?

If the share price is 26 cents, are the options worth more than their current price?

What is the process in June with the options expiring?

scenario -

I buy 50,000 options @ 4 cents. I hold them to expiry and the share price is 30 cents. Do my 50,000 options then turn into 50,000 shares?

Or does it work differently?

 

[dj_420]

What are we making of the options at present?

Is it at 25 cents in June?

If the share price is 26 cents, are the options worth more than their current price?

What is the process in June with the options expiring?

scenario -

I buy 50,000 options @ 4 cents. I hold them to expiry and the share price is 30 cents. Do my 50,000 options then turn into 50,000 shares?

Or does it work differently?

your options only turn into shares if you buy them at the strike price.

the options you buy at 4 cents give you the right but not the obligation to purchase shares at the option strike price. the 4 cents you pay is the premium you pay.

for eg you buy 50 000 options at 4 cents, in the next month or so sp goes to 35 cents, you then convert your options at 25 cents (strike price) so the price you have paid is strike plus premium = 29 cents. therefore you are already 6 cents in the money if the heads are still at 35 cents.

 

[Mozart56]

300MT would be nice, although I'm expecting a more conservative figure of about 120 to 150MT, based on an average 6 metre depth ( I think this is the amount YML quoted for one of the HI drill holes that is in the new drill zones).

Anyone have any idea what would be a minimum amount of resource to make establishing this mine feasible (is 30MT enough?) and what would be a reasonable amount of annual ore production?

I'm keen to know the answer to this one too. There must also be a threshold quantum that would stir the interests of Rio and BHP?

 

[Dave31]

Up 13% at lunch... last price 29.5c.. nice forward movement over the last few weeks. Not too far away now from its high of 32.5/33c a few months ago

 

[Mozart56]

Up 13% at lunch... last price 29.5c.. nice forward movement over the last few weeks. Not too far away now from its high of 32.5/33c a few months ago

Healthy trading - have the seemingly endless quantity of sellers in the 20's finally been broken?

30-04-2007 12:01 PM $0.295 10000 $2,950.000 Crossed
30-04-2007 12:00 PM $0.280 13814 $3,867.920
30-04-2007 12:00 PM $0.280 11186 $3,132.080
30-04-2007 12:00 PM $0.280 13508 $3,782.240
30-04-2007 12:00 PM $0.280 50000 $14,000.000
30-04-2007 12:00 PM $0.280 40000 $11,200.000
30-04-2007 12:00 PM $0.280 6000 $1,680.000
30-04-2007 12:00 PM $0.275 75000 $20,625.000
30-04-2007 12:00 PM $0.275 4306 $1,184.150

 

[3 veiws of a secret]

Healthy trading - have the seemingly endless quantity of sellers in the 20's finally been broken?

30-04-2007 12:01 PM $0.295 10000 $2,950.000 Crossed
30-04-2007 12:00 PM $0.280 13814 $3,867.920
30-04-2007 12:00 PM $0.280 11186 $3,132.080
30-04-2007 12:00 PM $0.280 13508 $3,782.240
30-04-2007 12:00 PM $0.280 50000 $14,000.000
30-04-2007 12:00 PM $0.280 40000 $11,200.000
30-04-2007 12:00 PM $0.280 6000 $1,680.000
30-04-2007 12:00 PM $0.275 75000 $20,625.000
30-04-2007 12:00 PM $0.275 4306 $1,184.150

Actually the interesting scenario at present is that there is no panic selling,everybody is keeping their shares close to their wallets.......

 

[explod]

A close today at the current level ought to attract some deserved attention to this stock, IMHO.

Wealth to all. I am not qualified to impart financial advice.

 

[YOUNG_TRADER]

Patersons have started coverage of the stock, finally!!!!

They rate it as one of the best speculative buys with an initial target of 40c

See report

http://www.yilgarnmining.com.au/ASX/Australian Explorers Digest April 2007 excerpt.pdf

My work here is coming to fruition

 

[ALFguy]

Surely with the current buying, we should consider a 'buy the rumor' scenario?

But that write up by Patersons makes nice reading

 

[Mozart56]

Patersons have started coverage of the stock, finally!!!!

They rate it as one of the best speculative buys with an initial target of 40c

See report

http://www.yilgarnmining.com.au/ASX/Australian Explorers Digest April 2007 excerpt.pdf

My work here is coming to fruition

40c valuation sounds very conservative next to your analysis YT. I'd say the fruit is more likely to ripen north of 50c

 

[spottygoose]

Way to go YT a job well done.

And thank you for sharing your research with us as early as you did.

 

[Dave31]

Sell side is bare!

I am surprised, and happy, to see it hit 32.5c! Alot of large sales going through today as well.