Ahhh, panic in the short term. No one knows what to expect. You...

Ahhh, panic in the short term. No one knows what to expect. You may pick up an absolute bargain!

IMO, longer term the prospects look reasonably good, providing Blackthorn do get to list on the AIM, and that CCI's share of the newly listed company is a reasonable sized holding (for their $12.3mil + 6% coupon). CCI would be debt free, but would need another project/endeavour. Pity it didn't leave them with a nice wad in the bank too!

BT makes the point that Australian investors do not place the same value on SA resources as do the UK and Nth America. In confirmation of this situation, the following was posted by Mr.Gordon in early June.
Please note the listing date and price for IFL. Make of it what you will.


INTERNATIONAL FERRO METALS


International Ferro Metals: Upcoming ferrochromium producer could become a major force in London Mining Sector
By Ian Mclelland

Vital statistics Date: 4th May 06
Epic: IFL
Shares Issued: 410.28 million
Share Price: 38p
Market Cap: £155.9 million
1 Year Range: N/A
Sector: Base Metals
News: Latest
Website: Under Construction
Other Articles:




Before looking at International Ferro Metals (IFL) I knew very little about Chromium.

Yes I knew it was an ingredient used in steel products, but not much more. I know plenty about Molybdenum and Tungsten, which belong to the same family of metallic elements, but I had never really considered a Chromium play as an area of potential interest and investment. I don't have anything against Chromium, it's just that for some reason Molybdenum, and Tungsten to a lesser extent, are more on the radar of retail investors, like me. After being introduced to IFL and looking into their story though, I realised this was a mistake. Chromium and more importantly IFL really is worth a much closer look, here's why....

Chromium isn't just another ingredient in stainless steel as I implied earlier. It is in fact the crucial ingredient that allows steel to resist oxidation and corrosion thereby making it "stainless". What is Stainless Steel? Well, in simple terms it is alloy. An alloy is the product you create when you combine two elements together of which one must be a metal. In the case of Stainless Steel, you combine at least 50% Iron with at least 10.5% Chromium. Other ingredients can be added too including nickel, molybdenum, tungsten, silicon, carbon and titanium which all enhance the properties of steel alloys in different ways.





Chromiums qualities mean it is also used for other purposes like hardening steel, steel plating, to give glass an emerald green colour, and for use as a catalyst. But IFL won't be mining and selling Chromium per say. The company has acquired the Buffelsfontein Chromite (Fe++Cr2O4) Mine on the Bushveld Complex in South Africa. What IFL intends to do is smelt the Chromite to remove impurities to create Ferrochromium. Ferrochromium is an alloy principally made of Iron and Chromium, but in IFL's case, the alloy will have naturally high levels of silicon which is an added bonus to steel producers as this is usually added in at a later stage.

Ferrochromium is in demand too.

Emerging countries like China are consuming ever more amounts of steel, and baring some unforeseen global event, India too will become an ever larger consumer. 90% of global ferrochromium production is used by the stainless steel industry, and according to IFL, demand for ferrochromium is expected to increase from 6.6 million tonnes per annum now to 10 million tonnes in 2015.

IFL listed on the Alternative Investment Market in September 2005 raising an impressive £80 million before expenses by placing 228.57 million shares at 35p per share. Before listing, IFL had already secured additional bank finance in South Africa primarily thanks to the support of Jisco, a Chinese steel producer who has already agreed to take nearly 50% of IFL's 246,000 tonnes per annum ferrochromium production, and also participated in the fund-raising exercise, investing USD $34 million. The combined bank finance and equity fund-raising upon listing meant that one of the major hurdles to production for IFL is already cleared. Since listing, IFL have announced further contracts with consumers, and a contract for thermal coal (coke)to feed the furnaces, with Mittal Steel - two more major milestones. Perhaps most impressive of all, but least noticed, IFL recently agreed to acquire Purity Metals Limited, which in turn owns 80% of the Sky Chrome property which lays only 5km from IFL's Buffelsfontein Mine. The acquisition will nearly double the potential mine life of Buffelsfontein from 19 years to 40 years and could allow IFL to increase the number of furnaces in operation from 2 to 4 at an early time than first envisaged.


One other added advantage worth noting is that IFL's operation will be in the lowest 10% of ferrochrome producers due to the good infrastructure, state of the art furnaces and close proximity of the mine to the processing facilities.

IFL certainly appears to have a robust mining and processing operation under construction in South Africa. Thus far the company has kept to it's schedule and should move into production in 2007. The primary risk to an operation like this is the prevailing global supply and demand equation for steel. However, IFL has the unique advantage of having a major Chinese steel producer as a keen supporter/shareholder and a very low operating cost base to work from. IFL appears to have all the right ingredients for success.

Interesting viewpoint on chrome Co.