YML - Yilgarn Mining

[gringokonyo]

Marillana will most likely to be bought by one of the big boys around the area, so i certainly hope YML keeps on looking for new projects.

I'd be surprised if they sell Marillana. These guys don't strike me as being time wasters, and we know that they have been in discussions with BHP and FMG about rail arrangements for carting their ore - which they wouldn't do if the goal is to sell Marillana. They've also received preliminary enquiries from the Chinese also means a JV with the Chinese is a possibility. Also, they have 7 other iron ore tenements which means they're pretty serious about getting into iron-ore production - they need to start somewhere.

Marillana is owned by Brockman Iron Pty Ltd, a wholly owned subsidiary of Yilgarn Mining -I wonder if that will be spun off some time in the future?

Price down 3.5cents thus far. Obviously a few people can't wait a couple of months. Good luck to them.

 

[Mozart56]

the actual value to the company is not that significant:

Take the open pit..
1120 tonnes at say $40 000 per tonne = $44 800 000
YML can earn 51% = $22 848 000
I had a look at some other open pit nickel mines and they were significantly larger than YML (so economy of scale much better) and their cost per tonne was about 70% of the total nickel value (to produce pure nickel from dirt). So say 80% of YML nickel value for mining and associated activities.

20% of $22 848 000 = $ 4 569 000 and thats before tax and dont forget YML had to spend over 3 mill to earn that

I suspect the underground section would have significantly higher mining costs ? Some one please tell me if the assumed 80% cost is too high.

My sums look a little better than yours Kiwikarlos - please tell me if I'm wrong. Your calcs haven't taken into account the Cu that they get, or the Ni price in $Au.

US$ AU$
Cu Price $7,665 $9,125
Ni Price US $41,900 $49,881
Exchange Rate 0.84

Stage 1 1120T of Ni + 410T of Cu = Gross of $59.6M = Profit of $17.8M*

*Assuming profit margin as 30%. ie YML earn $9.2M (51%)

Stage 2 6244T of Ni +2295T of Cu = Gross of $311M = Profit of $66.4M*

*Assuming profit margin of just 20% ie YML earn $34M (51%)

So total cashflow potential for Stage 1 & 2 indicated resource only = $43M

Help me out if I've made a fundamental error here, but this looks very good doesn't it?

 

[KIWIKARLOS]

I would agree your figures look a bit more realistic than mine but that total profit is only equal to its current market cap. I dont think this will move untill mariana results out, may drift down a bit on low volumes untill then.

 

[Mozart56]

I would agree your figures look a bit more realistic than mine but that total profit is only equal to its current market cap. I dont think this will move untill mariana results out, may drift down a bit on low volumes untill then.

Give's them a rock solid PE of 1 though

Don't forget the $3M they have in the bank + the $5M they'll get for the options. Effectively spec value on Marillana is free. That's better than many of the recent IPO's that have listed at double their raising price on the back of spec alone

 

[MiningGuru]

Looks to me that someone is trying to cap this share, and they are succeeding. The sell order put on at 42.5c is a cap IMO, so that he can pick up shares cheap that people are being persuaded to sell, to either pay for their options, or other reasons.

Once the sell pressure is off after option expiry has concluded the shares will return their upward march!

I thought the recent announcement was good, with the virtual certainty of the Carr Boyd project commencing and good money coming in, to fund the iron ore developments!

 

[UPKA]

Looks to me that someone is trying to cap this share, and they are succeeding. The sell order put on at 42.5c is a cap IMO, so that he can pick up shares cheap that people are being persuaded to sell, to either pay for their options, or other reasons.

Once the sell pressure is off after option expiry has concluded the shares will return their upward march!

I thought the recent announcement was good, with the virtual certainty of the Carr Boyd project commencing and good money coming in, to fund the iron ore developments!

agreed, and i cant help myself picking up some more today @42.5c, which is bargain! only reason why there's a sell off is patience, and many out there r running out of it!

 

[KIWIKARLOS]

Long way to go before we get any significant announcement on either, could drift lower untill we get some drill results. I was hoping the Carr Boyd ann would arouse more enthusiasm.

 

[UPKA]

http://www.bloomberg.com/apps/news?pid=20602013&sid=aKuppf5eGo4c&refer=commodity_futures

This is an interesting read, if Nickel price keep on diving like this, CB could be in doubt. anyone with a different opinion?

 

[KIWIKARLOS]

yeah i think at 37 K per tonne it shouldn't make to much difference. but 25K then i would start been concerned. Cant see it getting to their though, all depends on the costs involved in production.

Anyone have a idea of indicative cost to profit % for open pit and ug nickel mines we might be able to use?

Plus i dont know if the existing infrastructure at Carr Boyd means that they have to spend less on development thus higher return?

 

[UPKA]

yeah i think at 37 K per tonne it shouldn't make to much difference. but 25K then i would start been concerned. Cant see it getting to their though, all depends on the costs involved in production.

Anyone have a idea of indicative cost to profit % for open pit and ug nickel mines we might be able to use?

Plus i dont know if the existing infrastructure at Carr Boyd means that they have to spend less on development thus higher return?

I think the recent pull back was also linked to the declining Nickel price, many dont think that CB will go into production as the outlook for nickel is weak. personally I think CB should be alot cheaper to develope due to the existing shaft from previous developement on the site, bt we won't know till the BFS comes out.

 

[KIWIKARLOS]

Still insignificant amounts been sold, i wont start panicing untill i see 500K and -10% etc.

Holding out for marianna results which from memory i think have started drilling on monday so maybe a few weeks till we get some results + i dont want to sell this financial year.

 

[Dave31]

Poor YML getting hammered since the ann. Might make way for a good re-entry point soon given that I was looking for an entry in the mid 40's just last week!
Still has alot of fundamental potential thats for sure

 

[KIWIKARLOS]

I reakon its just stop losses the big boys aren't selling out.

Marianna is where the big bickies are 35 is strong support and the sell side volumes are tiny.

One good buy order and we are back to mid forties.

Anyone got more info on marianna drilling timetable?

 

[UPKA]

ok boys calm down, the sell off was caused by falling nickel prices, and worries that nickel might fall even more this couple of yrs, bt CB isnt the main focus of this stock, we r waiting on Marianna !

 

[gringokonyo]

I think the recent pull back was also linked to the declining Nickel price, many dont think that CB will go into production as the outlook for nickel is weak. personally I think CB should be alot cheaper to develope due to the existing shaft from previous developement on the site, bt we won't know till the BFS comes out.

Yeh, there's a few nervous nellies out there worried about the collapse of the nickel price. I think Yilgarn is committed to the open pit, but the underground mine will probably only proceed subject to the nickel price being over $28000 US per tonne. Still, the open pit should give them a few dollars to progress Marillana, which is where the big dollars lie.

I'm expecting the share price will continue to retreat until the end of the FY as people take profits to put into their super.

I reckon a few punters have moved over into FWL given the way that's going up at the moment!

 

[YOUNG_TRADER]

I had to take some profits on YMLO today, 200k at an avg of 27c, I still have plenty left,

I just thought I'd let you guys know,

This doesn't change my view one bit re YML, I still think it has amaing upside etc but I needed the money + it never hurts to take some profits given how hard its run

Seeing YML retrace so hard makes me thankful I took profits when it had run really really hard,

Anyway like I said, my fundamental view hasn't changed on YML, I was dissapointed with the announcement they gave re Carr Boyd as it didn't express an value in tersm of NPV (or did I miss that) still Marilliaina holds the potential to be the company maker but that won't be until August, I will be looking to buy more on weakness (like now)

 

[KIWIKARLOS]

Yeah thats a painful lesson i've leart so many times. I've started trying selling at what i think are peaks then reentering. Sometimes i may miss out on a few % but thats no biggy.

Regarding mariana they started drilling monday, perhapes 2-3 weeks for drilling maybe same again for results. Could be all quiet on the western front untill then. Unless we get some Carr Boyd updates sooner rather than later.

PS. I agree the Ann regarding CB was a bit of a let down they are certainly keeping their cards close to their chest.

 

[noirua]

The drilling programme at Marillana and the Carr Boyd evaluation have dampened down the speculation, as it will be sometime before these mines are ready. The last announcement on 18th June does seem to add uncertainty and that is alway bad news for the stock price.

Nothing much has changed and it may be a time for trying to "catch the falling knife", before the next round of speculation begins.

 

[Mozart56]

The drilling programme at Marillana and the Carr Boyd evaluation have dampened down the speculation, as it will be sometime before these mines are ready. The last announcement on 18th June does seem to add uncertainty and that is alway bad news for the stock price.

Nothing much has changed and it may be a time for trying to "catch the falling knife", before the next round of speculation begins.

Just when that round of speculation will be is the key question, and having re-read the announce again I thought I'd present my thoughts.

Marillana

Clearly this is the where the greatest potential value lies and I think this was confirmed by YML placing the status of this project ahead of CB in the release. Re-reading this I think it is unlikely that we will know just how big this tenement is until close to the end of the year or early next year. Hence any speculative rally on the back of this could be months away. I’ve detailed my rationale for this below:-

Infill Drilling

“It is the Company’s intention to release the results of the in-fill drilling following the completion of that programme (not progressively). The results are not expected before August, 2007”

YML are yet to hit any of their stated drilling deadlines, so don’t expect anything here before September. This process does nothing more than translate an “inferred” resource to an “indicated” resource.. which is positive with respect to the inferred 30Mt but hardly going to set the world on fire. Whether JORC is outcome of this or not is not stated, and they could be waiting to JORC the whole tenement.

Exploratory Drilling

Now this is the exciting bit… just how much more Fe is there and what is the grading? This is the programme that could transfer YML into a Cinderella story… but don’t get too excited because it is unlikely to be known for some time.

“This programme will follow on from the in-fill programme in the NW sector”

So if we assume that the infill drilling is all done and dusted by September… which could easily become Oct/Nov, they won’t even begin the exploratory drilling until the end of this year. Could well be January before we know what is in the ground.

Carr Boyd and Irwin Hills

I thought it was interesting that no update or official statement was provided on Irwin Hills. It’s clearly been put on ice, and the recent fall in the Nickel price hasn’t helped its cause. It now falls into the dreaded "strategic resource" category. CB is another matter. I am very confident that this will go ahead, and the recent falls in the Ni price will certainly affect profitability, but at 38c YML only has a market cap of $25M. This could easily be recouped on the back of this project, but again timing is a factor. Will the open pit commence this year? I think this could be doubtful as they have stated that the “decision to proceed” is at least 2 months away. Cashflow for phase 2 may not be received until this time next year.

It all sounds a bit depressing, but I’m a long term holder and will continue to acquire more as the opportunity presents. This is a long-term stock, and I can’t see any imminent announcements that are likley to propel it upward in the short-term. We should also be mindful of all the other tenements that YML has. They have some highly desirable areas to investigate.. but like everything real… it takes time. Marillana could well be a retirement maker for stockholders, but you need to be very patient to reap any rewards. I'm happy to wait.

 

[3 veiws of a secret]

well when it went up there where no sellers...so when it goes down there are'nt any buyers......Guess YML is no longer the flavour of the month .