Tophat, I agree fully. Made the comments below on the TMR...

Tophat,

I agree fully. Made the comments below on the TMR website. Since nothing much seems to have happened in Armenia in the last 12 months, if this merger was somehow to fail, I fear IBR could slide to <60c levels on inertia and possible loss of focus?



Agree with other's comments that buying IBR is the logical trade at the moment. On the other hand, if there is completion risk, then buying TMR should lead to a massive rerating in the year ahead

1. They are unhedged
2. They say they should be producing circa 12-13,000t of copper in conc next year.
3. After by product credits they should have cash costs of +/- US$1.00/lb next year
4.) at "just" US$3/lb, this would suggest that gross margins for next year could be above US$50m.
5.) After depreciation, and tax (noting the large tax losses they have) this suggests that A$40m+ earnings next year are a possibility
6.) Even at half these levels (i.e. copper at US$2/lb in 2008) the earnings in TMR probably justify a re-rating to circa 8 x A$20m nett earnings =A$160m
7.) This would suggest a share price of approx 32c/share, plus something for Charters Towers and exploration upside

Looks - on this pretty conservative analysis - like a really good buy.

Then apply that cashflow to the on-balance sheet financing of the Armenian assets and this could be a 60c share by the end of 2008 - probably able in a 2 year period to get close to a dollar a share on some decent activity (drilling!!) in Armenia and any sort of resource growth in Chile.

My target for this by December 2009 is shaping up for A$1.00/share.

Anyone disagree with this analysis?