article from miningweb

Article below, but first another personal rant.

As I've said, please reject CUO's bid, or at least their current bid. If CUO shareprice flies to 5c or something, then different story. I've bought URL at 13 not expecting the current bid to succeed and with 12c being a floor under the shareprice.

The article below, posted on Wednesday (US time) gives a good idea of the potential for URL, and the inadequacy, or should I say opportunistic style, of the TKO bid.

Perhaps CUO should have taken a more roundabout route and bought 19% of URL as IGO did with MRX. Now they have a serious fight on their hands and they will need to boost their own shareprice if they wish to get the bid accepted.

Or perhaps they thought their shareprice would go alot higher with the high grade drill interesection announced long before. Oops they stuffed that up.

I wont be accepting at any CUO price below 5c (ie equivalent of 30c per URL share as the bid is 6 CUO sahres for one URL), and its way off that at the moment.

Cdchi1

Integrated Roseby copper has Universal appeal
By: Peter Gonnella
Posted: '15-DEC-04 10:00' GMT © Mineweb 1997-2004



PERTH (Mineweb.com) -- Aussie junior Universal Resources [ASX:URL] is hoping to graduate to copper production ranks in around two years time after securing much-needed capital and simplifying the ownership structure of its key asset.

Perth-based Universal today (Wednesday) announced it had raised A$5.7 million from a couple of equity placements at an issue price of A$0.115, with more than half having been taken up by an unnamed UK institution, which now has a 10.1 percent shareholding in the copper hopeful. In addition, the company recently bought the other 50 percent interest it didn’t already own in the Roseby copper-gold project in Queensland for an all-scrip in specie return of capital valued at A$9.8 million to the shareholders of former joint venture partner Bolnisi Gold [ASX:BSG].

The fresh cash injection is planned to go mainly towards advancing a bankable feasibility study (BFS) into the proposed estimated A$60-$70 million development of Roseby, which hosts latest stated combined oxide and sulphide resources totalling just over 100 million tonnes grading 0.69 percent copper and 0.05g/t gold for an in situ 710,000 tonnes of copper and 183,000 ounces of gold.

At this stage Universal is envisaging an operation designed to produce between 50,000 and 70,000t of copper per annum and 20,000-25,000oz of gold a year in concentrate. At these copper levels, it would emerge as an Aussie top five copper producer. The BFS is earmarked for completion in the December 2005 quarter and, should development be given the go-ahead, production is targeted to commence by late 2006 or early 2007.

Previously Universal and Bolnisi had been evaluating the possibility of developing separate sulphide and oxide operations at Roseby respectively. “Our focus (now) will be on a large-scale combined development of the oxide and sulphide resources at Roseby, bringing together the work previously undertaken by Universal on the sulphides and Bolnisi on the oxides into a single integrated project resulting in a number of significant benefits,” said Universal chairman and managing director, Peter Ingram. “These would include considerable capital and operating cost savings from a bulk mining and processing scenario.”

Shares in Universal finished the day unchanged at A$0.12, which represents a market capitalisation of almost A$24 million based on the group’s expanded issued capital of 197 million shares. “Universal appears cheap relative to other small copper stocks (using) comparisons of enterprise value per tonne of copper equivalent,” noted FW Holst analyst Rob Craigie, who added that the junior’s lack of capital (it now has A$5.5 million cash on hand) and the Roseby joint venture had been significant impediments to a market re-rating.

Universal is currently priced on a comparatively modest EV of A$25 per tonne copper equivalent, while other promising copper plays such as Tritton Resources [ASX:TTT], Matrix Metals [ASX:MRX], Exco Resources [ASX:EXS] and Minotaur Resources [ASX:MNR] (the latter which is in the process of being acquired by Oxiana [ASX:OXR] have EVs of approximately A$190/t Cu equivalent, A$166/t, A$110/t and A$149/t respectively.

According to Craigie, the Roseby blueprint would likely involve a single processing mill to treat a combined sulphide-oxide feed (to output a 30-40 percent copper-gold concentrate). “Univeral is exposed to all the usual exploration, funding and development risks,” he said. “The key risks would be a sustained low copper price (unlikely in our view) and material project delays.”