Australian Shares Sparty's Blog
Comments on this blog should never be taken as investment advice
Posts on this website are general "tips" and nothing more than that and should never be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy.
Main Forum•CUDECO's large bulk sample = 4.15% CuEq
-
AVERAGE HEAD GRADE FOR ALL ORE TYPES - PHASE 2 4.15% CuEq*
Interestingly this is almost exactly what Wayne McCrae said it would be a few years ago. I remember him telling us at an AGM that the ore body was complex and words in effect that are well summarised in today's report: "Generally speaking, the Rocklands orebody is characterised by a thin layer containing traditional copper oxide compounds, above a layer of native copper which contains some oxidised ore and some sulphide ore, as well as native copper, followed by a deeper layer of supergene or chalcocite ore and subsequently the primary ore. The ore is also characterised as having a significant, but variable amount of cobalt, gold and magnetite present throughout each of the ore types.
The previous JORC's did not/were not allowed to include the "native copper" and so substantially understated the actual amount of copper that is available to be mined.
Obviously the new China based partners with the $12 billion off-take agreement and purchase of 10% of the company etc understood what Wayne McCrae was saying.
Interestingly the market still doesn't get it and the perhaps "organised" Topstocks team of downrampers are playing it hard....
The time to increase your holdings is very close if not now. I doubt that you could find a better copper EV/Resource in Australia.
Whatever else with no debt, $121m cash and now one of Australia's major copper emerging producers CDU is worth studying in depth.
I hold CDU
-
Hi Sparty,
I have a couple of questions re Cudeco that I hope you may be able to shed some light on? 1. How do you think CDU compares with AOH now after the bulk sample results on an EV/Resource comparison? 2. When is production scheduled to occur? Excuse my ignorance but does cdu already have a mill to produce concentrate or if not what is its plans in terms of processing the ore and timeframe? 3.How long to the company actually starts earning money? i.e. when do you expect first production to occur? 4. What is your 6-12 month price target for this company? 5. what do you believe its intrinstic value is right now based on your research?
Sorry for the bombarding of questions however I would be very grateful to hear your responses to these questions.
Thanks in advance.
Best regards, Doug
-
Hi Doug, You certainly want Sparty to do a lot of leg work. Maybe you and I can figure out the answers to your questions with Sparty putting in his 2cents. Thoughts? I'm willing if you are. Alite
Note: All questions will have a best guess answer but questions 4 and 5 are pure speculation as the market denotes value and they may ore may not pick up on the stock.
-
Hi Doug and Alite, I was going to do a CDU in depth article but had a dose of the flu. 7 days in bed has put me well behind. As CDU attracts so much virile debate I want to be spot on with my analysis.
One of the difficulties is the new results from the deep hole that targets the IP chargeability high just north of Las Minerale... this indicates that the last JORC is only the tip of a very large copper iceberg. See: Potential New Mineralised Structure Identified - Rocklands
On the current figures the EV/Resource should be quite easy**..... but with the deep hole DODH236 the whole ball game has changed... And this pleases me a lot as I predicted that it would over a year ago on the Topstocks forum while debating a resident group of rather nasty down-rampers.
** Easy if we assume that we can just multiply the JORC tonnage by the new percentage 4.15% but I'm not sure that will be widely acceptable even if it is sensible......
I note that Stephen Bartrop, the managing director of LimeStreet Capital has run his ruler over both AOH and CDU. Copper: is it really the new gold? : Snippet: The Global Industry Analysts’ Copper: A Global Strategic Business Report shows that this emerging wealth means China is the largest consumer of copper globally. Demand for refined copper in China has been growing due to growth in various Chinese industries, such as telecommunications, energy, automotive, construction and consumer goods.
And it is this demand that Mr Bartrop said gives copper a healthy outlook on the forefront of an impressive emerging economy demand.
I hold AOH and CDU
-
Hi Alite & Sparty definitely overloaded Sparty with Qs!. Please feel free to throw your hat in the ring in regards to my questions above. There seems to be alot of negativity associated with CDU and I was hoping to get the low down on when they are likely to start producing.
Given the chequered history of this stock it doesn't suprise me that there is alot of stigma associated with CDU.
Just hoping to get some unbiased answers
Thanks in advance
-
Doug, where is your research? Sparty has given us a great deal of useful further info and you have thanked him well but not added to the information on offer. You may be looking outwardly for unbiased answers but I again challenge you to look inward to find those answers. I am an excellent researcher. I'll back you up if you start the ball rolling. Stop looking for answers and find them yourself. Alite.
-
Doug, I am new to CDU and so have fresh eye. CDU has been sitting at, or around, $3.50/s for 5 years without rising or falling in that time. This means that CDU has had something of value for some time but not been able to make it into a working mine for some reason. I see that Rocklands in Qld is CDU’s primary focus but that they are making a little money from gold (but not enough to be profitable). As of today the headline mineral resource is 31mt @ 1.24% Cu eq. This is a significant resource without being outstanding. With 145mill in shares and a market capital of 460 mill they should be able to raise some money to develop the site. I read that the project will cost $250mill… a relatively small amount. I also note that 6.5 million shares have been sold to Oceanwide at $4.00:= $25 million. A sale of $130 million (20%of the CDU) to China Oceanwide is also mentioned at a price of $3.80/share.
Doug, Oceanwide think a lot of CDU. What do you think? I have given you the numbers to value the company… over to you.
Alite.
I do not hold CDU shares
-
I will be at the RIU conference this week where S Bartrop will be presenting. I'll bail him up and ask a few questions...
-
Time to check out CDU's latest announcement re the Fairfield Prospect.... Rocklands goes on getting bigger and bigger.
CuDeco announced the Rocklands Fairfield prospect delivered high grade copper. There is a grading at 10m @ 2.99% CuEq including 3m @ 6.75% CuEq. In addition, drill hole LMRC458 intersected 22m @ 1.32% CuEq from 87-109m and was drilled to the south, to test for mineralisation under the old Fairfield Pit. Diamond drill hole DODH242 intersected a 22m zone of copper and cobalt mineralisation, from 90-112m and an additional low-grade zone was also identified from 157-162m.
-
Sparty, you are giving us the best numbers from a grouping of tests (i.e CDU best strikes)... why should we "check out CDU"? Do you think that the resource will substantially increase?
Doug asks what value should be put on the company? Doug, come back fella and I'll help you figure it out. You have asked the right questions and I'll help you find the answers. All the info is available if you know where to look.
Cheers Ro
-
Hi Alite & Sparty, I need to do my own research on them. this risk to me seems to be time to production. They sound like they have good support but are perhaps waiting for the SP to head north before doing a CR to build the mine, who knows? excuse my ignorance but what is the resource ? you said 31mt @ 1.24% Cu eq = 384400 tons of container copper. I suppose that is 40kt for nine years of production appoximately.
I own a large position in AOH which has :
"Roseby is 100% owned by Altona and contains 132 million tonnes of ore grading 0.7% copper and 0.1g/t gold for some 906,000 tonnes of copper metal and 254,000 ounces of gold. " from website
This risk with CDU i see is with any prospective miner and that is time to first + cash flow and an EPS of something.
whereas i see aoh will be in production in Finland early next year generating cashflow to fund Roseby.
I need to be patient and have a medium term horizon rather than watching it on a daily basis.
Please share your thoughts
Best regards, Doug
-
Re CDU... I will do a "full" analysis in the very near future. You both may have underestimated CDU's resource substantially. (In the light of the large bulk sample). They will be mining towards the end of 2012 early 2013. They have multi-billion off-take agreements in place and one of China's most powerful metal companies backing them.....
I hold both CDU and AOH.
-
Hi Doug, Nicely done. You seem to be looking into the specifics of the company and not just being told what others think. Sparty is of course right in that there is more Cu than is stated in the known resource. He gives good evidence that others think that there is a lot more Cu to be found at this site. Sparty infers, but does not say, that the company is undervalued.
The question you have Doug is whether AOH is more valuable than CDU on a possible income vs number of shares basis.
I truly don't know the answer. My preferred Cu play is PNA bought at 2.25 / share. And I'm not buying shares at the moment, just selling.
Alite
-
Hi Doug, of course I excuse your ignorance with this share ... I am chock full of ignorance when it comes to the details of this share. But what matters is your intent to reduce your ignorance. Put another way, your ability to learn about the company and make an informed personal choice. It would also be great if you posted the things that you have learned in Sparty's blog. The knowledge of the many will always outweigh the knowledge of the few.
-
Arr Doug, A taker not a contributor. Alite.
-
Alite, sorry for not posting my thoughts. At this stage I am just sticking with AOH as I believe it is significantly undervalued at 28cents.
In the next 12 months 3 events will take place that I feel will lead to a strong re-rate of the SP upwards.
1. Increase in Reserves at Roseby 2. Commencement of mining in Finland and first concentrate sales. 3. Expiry of XStratas option over Roseby.
Provided copper doesn't tank in the interim I believe these three catalyst should move SP upwards.
I am far more bullish on gold than copper but hope current prices of around $4/pound are sustainable for the next 12 months.
Thus I will sit tight and play the waiting game.
If I had more funds I may have picked up some CDU but am rather ignorant about this company compared with AOH. Plus I feel AOH has a very strong management with alot of skin in the game.
