Vulcan (VCN) represents one of the most outstanding and...

Vulcan (VCN) represents one of the most outstanding and overlooked plays on the ASX at the moment.

THE SUMMARISED FACTS:
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VULCAN has
- A Market Cap of $21m
- NPV OF $120m calculated for its 100% owned Copper-Cobalt-Nickel-Gold-Zinc project located in a 1st world economy and socially stable country
- $8.5m of available funds after raising money from Macquarie Bank, Finnish Industry Investment Ltd (a Finnish government-owned investment company) and private investors
- Experienced and quality management: Managing Director - Dr Alistair Cowden (ex WMC, Delta Gold, Magnetic Minerals); Chairman Barry Eldridge (ex MD Portman Mining)
- A suite of other highly prospective mining projects in Finland (Nickel, Vanadium)

Also interesting to note that last week Dr Cowden decided to step down from all outside directorships to solely focus on Vulcan - an encouraging sign.

Further Research
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- There are detailed broker reports at Vulcan's webiste:
http://www.vulcanresources.com.au/investors/researchnotes.htm

- I also highly recommend listening to Alistair Cowden's short audio interview on Boardroom Radio - where he articulately explains Vulcan's Finnish projects and potential:
http://www.brr.com.au/event/VCN/1167/5043

Lastly, if anyone knows of any similar stocks that comprise the same undervalued fundamentals/managerial quality - please reply and let me know so I can research.

More Details abount the Kylylahti Project:
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- NPV > 5 times market capitalisation at long term metal/conservative prices
- Development decision likely later this year
- Final stages of a bankable feasibility study due to be completed later this year
- Planned mine construction commencing mid 2007

2005 Pre-Feasibility Study Project Financials (A$m) using long term metal prices:
Total Revenue $892m
Operating Cash Surplus $431m
Capital Cost $134m
IRR 31%
NPV $120m
EBITDA per annum $43m

Equivalent to:
- 150,000 oz/pa gold mine
- US$220/oz cash costs
- 10 g/t head grade
- Minimum 10 year life

Long term prices assumed above: copper US$1.15/lb, cobalt US$16/lb, nickel US$5.5/lb, gold US$420/oz, zinc US$0.50/lb

As robust as the above forecast financials look, they are considerably enhanced when taking into account current metal prices, hence the economics may be substantially higher than forecast in the pre-feasibility study.

Eg:
Copper price used - US$1.15/lb
Copper price currently - US$3.45/lb

Nickel price used - US$5.50/lb
Nickel price currently - US$11.00/lb

I hope the above has highlighted a potentially lucrative risk/reward play BUT I am obviously biased so please do your own research.

Best of luck
Maverick