BLE.TSX Blue Pearl Mining: http://www.bluepearl.ca/s/Presentations.asp
Shares after raising cash for takeover of Thomson Creek/Endako: 100.1 mill. and a possible 22 mill warrants.
Current price $CAN6.38.
PROJECTS: Apart from the takeover, BLE is preparing a feasibility study for its Davidson mine (588 mill lbs Mo).
THE TAKEOVER: Cost of the ThomsonCreek/Endako running projects: US$575 mill minus the US$150 mill cash held by Thomson Creek or net US$425 mill.
The current profit from these 2 assets is US$323 mill. So, these assets previously held by private interests were running on a P/E of about 1.3, only: 425/323.
However, these 2 assets were operating 2/3 of the time and Blue Pearl will run these full time. Add to this their Davidson mine to operate in 2008, and while BLE is now in the top five producers, in 2008, it could be the world's biggest. Current Mo price: US$26/lb.
FINANCING THE TAKEOVER. An equity issue of 41.9 mill shares @CAN$5.55 has been completed. The Bank will lend them US$450 mill. This includes expenditure on the feasibility study of the Davidson Mine.
PROFITABILITY. Based on their 100.1 mill shares and 22 mill warrants (Most to convert @CAN$9 before Oct 23, 2011), the outlook is very positive IMHO. They will most likely also pay to the previous owners US$50 mill. this year, the same next year and US$25 mill finally in 2010, as well as US$23.35 mill, while the interest bill could be some US$32 mill for the next 12 months but they have access to Thomson's Creek's US$150 mill cash and they could become full time producers.
Consider that they could make a profit of some US$280 mill or CAN$315 mill (US:CAN$1.1242) or CAN$3.14/share in the next 12 months, then, based on the current CAN$6.38 sharer price, the P/E is only 2. And this from a very profitable producer!
BLE will be paying back their debt soon and depending on the Moly price, this may not take long. However, they will need to finance the Davidson mine, to produce in 2008, as well.
SUMMARY: Considering BLE was very lucky in taking over the very profitable high producers Thomson Creek/Endako assets at a low price, backed by Bank finance and the likelyhood, they will be running these full time; add to this the Davidson Mine operating in 2008, they will have by then 3 considerable sized mines operating.
IMHO, Blue Pearl (BLE) is the cheapest Moly producer available by far.
Sources: 1. The website: http://www.bluepearl.ca/s/NewsReleases.asp?ReportID=149369&_Type=News-Releases&_Title=Blue-Pearl-to-Become-One-of-the-Worlds-Largest-Molybdenum-Producers-with-US...
