hey guys have had this one on my watchlist for a while now and...

hey guys have had this one on my watchlist for a while now and have been buying small chunks here and there, hoping to get a decent position. But judging by the movement today on good volume the market is finally waking up to QOL.

It will be Australia's next Molybdenum and Tungsten
producer with mining to commence in the 4th quarter and first sales in the 1st quarter next year.

It has the jump on many other of the near term producers such as THR,PDM,VML.


So a look at QOL and its projects


Share Structure

Shares 138,381,153
Options 34,730,192


Market Cap

$58,857,857



Reasons to buy into QOL

- Exposure to hot commodities in Molybdenum/Tungsten
- 2 mining operations by early 2009
- Wolfram Camp mine already fully funded and due for production 4th Quarter 2007
- Mt Cannindah (copper/gold/silver) due to come online early 2009
- High potential for resource expansion in immediate proximity to producing mines.
- First in new breed of Molybdenum producers
- Will be generating profits in first year of production
- plenty of Shareprice upside due to stock re-rating as mine commencement gets closer.
- undemanding p/e of 1.5 based on current share price.
- top 50 shareholders control 57% of the company (thanks Shaun)

Wolfram Camp

Production to start late 2007, with first sales early 2008.

To produce on a yearly basis

- 229,000 lbs of molybdenum
- 41,820 metric tonnes (MTU) of Tungsten

Annual sales of $21 million

Costs of $9.3 million

Profit of $11.7 million



Mount Cannindah

Feasibility Study complete early 2008
First Ore 2nd quarter 2009

Yearly Production of

- 8200 tonnes copper
- 5950 oz gold
- 275,000 oz silver

Total sales of $67 million per yer

Profit of $27 million per year



With over 3km strike left to explore at Wolfram Camp, QOL believes that they will be able to tripple the current resources.

The two main projects above will keep QOL busy over the short term they have several other exciting prospects being Banford Hill and Triple Crown.

If you take the potential profit of $38 million from the two projects it leaves QOL with a fully diluted

EPS 22 cents
P/E 1.5

Shows how much potential upside there is with QOL if you use the standard P/E of 10 it would give you a share price of around

$2.26

I would like to add that I am not saying that QOL will reach $2.26 but this is used to highlight the potential of the company.

Also the commodity price used for the calculations are as follows

Molybdenum $25 per lb
Tungsten $250 per MTU
Copper $2.50 per lb
Gold $650 oz
Silver $10 oz

All of the above commodities are trading significantly higher than the price assumptions used by QOL, which could add even further upside to the company.

Below is part of an article from Far East Capital

Prospective Tungsten Producers
“Update Shows Qld Ores is Leading the Pack, Boosted by Molybdenum”
The Molybdenum Co-Product is Adding to the Appeal of Some …
Molybdenum Price Has Been Stremgthening: The tungsten market has been overshadowed by the
surge in molybdenum prices from US$25/lb in February to US$33.50/lb at the end of May.
• The market has woken up to the fact the non-corrosive qualities of molybdenum make it an
essential element in construction of pipelines for the oil industry and in nuclear power plants.
The problems with leaking oil pipelines, such as we have seen in the Alaskan pipeline, can be
avoided if molybdenum is used in the steel. Currently approximately 66% of the oil pipelines in
use have to be replaced as their steel doesn’t contain molybdenum.
• The desire for molybdenum amongst investors has been highlighted by the commissioning of a
new molybdenum investment fund by Sprott Asset Management in Canada.
• The value of molybdenum is highlighted by the observation that it has now reached the price that
uranium was fetching, two years ago.
Limited Molybdenum Entry Points: There is no direct entry into molybdenum production for
investors on the ASX at present.
• Australia’s first molybdenum producer will be Queensland Ores, due to commission its
mine at the end of 2007, or early 2008.
• Two prospective tungsten producers have molybdenum as a co-product; Queensland Ores
and Thor Mining. Only Queensland Ores has a fully-funded development project.
• Thor Mining is still in the pre-financing stage with no definite timetable for production, but
we do view it as a project of merit.
• There are a number of exploration companies with prospective molybdenum projects.
These will be covered in a report that we are currently working on. However, none of them
will be a producer in the short term ahead of Queensland Ores.
Debt Finance Difficult: Specialty metals projects, tungsten and molybdenum included, are very
difficult to debt finance due to the thin markets. Equity financing is essential. While there is merit
in seeking debt/quasi debt from end users or investment banks, as a means of minimising dilution,
these negotiations can lead to development delays and constrictions.
… But Tungsten Prices Have Firmed Up As Well
• The tungsten prices as quoted in the London Metals Bulletin, has remained strong. The price is
based on surveys of producers, consumers and traders. For the month of April, the average low
price was US$257/MTU. We have increased the price from US$220/MTU to US$250/MTU in
our spreadsheet, the lowest level it achieved in May.
• China is the largest consumer in the world. In the past it has subsidised mines, but the subsidy
levels have been diminishing and a number of mines have closed. Stockpiles are being drawn
down to satisfy demand so there is an expectation that prices will remain firm


Would be interested to hear peoples thoughts on the company.

Looks very good going forward likely to be heavily re-rated closer to the start of production