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.