..........I think you should avoid seeing your mate as it clearly appears that he has mad cow disease or some other unfortunate brain disturbance infection ...and it appears that its contagious to llamas as well - keep your gumboots on (are you NZ by any chance??)
............see my educated and informed comments:
HaHAHAAA !!, Just got this through the mail from a colleague, (read past colleague) if anyones interested, I was looking, but not now, looks like the Llamas are breeding fast--
Suti et al.
I revised my numbers with more realistic costs. Costs around US$35 a tonne increasing by inflation.
...................Didn't you read they have two stockpiles with fines of more than 3 million tonnes - it is already out of the ground and been beneficated - so their cost is likely sub $10 as they have to truck it 55 km and load it.......
........The other mines - there are 9 in the latest release - are existing - Santa barbara and santa Fe used to operate some 30 years ago - very low tonnages -.........
I've assumed US$20m capex to get it off the ground (ADY share US$10m). Value now at 30cps using 15% discount rate.
...........Thats not what the press release says - ADY are providing CAPEX but my calcs say for three 1200 gauss mag separators, a phy sep. and a trucking contract on 4 properties they won't spend more than US$5m!! - There is a Aussy guy in Chile who has the komatsu and caterpillar contracts and he reckons this is about right.............
Remember how the company was peddling US$75m/t
............It was $72 a tonne get your facts right or bleat somewhere else..........
a few weeks back. This is the CIF (costs, insurance, freight) price. Page 23 of the colonial presentation says they will only get US$35-7/t FOB (free on board), suggesting that theyve got 58-59% Fe fines.
..................The Brazilian price CIF as quoted in their release and I have independently checked with The Tex Report - at 64% is (carajas fines is USD56.18 DMTU) at 23 Feb. The freight from Brazil to china is about USD$35, from Chile about USD$28. so $72-$28=$44 less insurance 4% =$1.60 so I reckon they have understated the FOB price and their EBIT.......
On the same page, they suggest that they're share of EBIT will be $US13m/yr. So they're saying costs will be US$9-11/t.
...........................They have alluvial and existing mines not banded iron ore like BHP in the Hamerlsey miles from anywhere. I reckon 9-11 per tonne is right on and i wouldn't be surprised if its lower than this because if you bother to go through CMP's numbers (can you read spanish - helps if you are an analyst working on Chile prospects) their numbers are about the same for El Tofo.
(They have 50% of the project, hence project EBIT will be US$26/t). Hmmmmm......BHP and RIO would be proud considering their operations costs are around that even with massive economies of scales.
..........Apples look very similar to oranges - same shape - keen analyst here.......the MCD is cutting in.
Also reading the half-yearly again, pages 12 and 13 of the PDF caught my eye:
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(b) Going Concern
The financial report
.................This is a foward looking cashflow review not a audit -
has been prepared in accordance with generally accepted accounting principles, which are based on the consolidated entity continuing as a going concern. The consolidated entity has incurred operating losses and is in a deficient working capital position as at 31 December 2004.
........................Well this is not quite true - there is a $1.5m loan facility not drawndown on that they have which is interest free and doesn't have to be paid back for a while - naught auditors you missed this one...also they seem to have cash in the bank post the event of about A$2 million or so on my calcs so - didn't the auditor report come out after the material event - hope the auditors think they are doing a good job....
In February 2005 the consolidated entity raised a net $8.675 million from a converting note issue.
.......................My AGM notes say it is a converting note - big difference guys - still minor detail for an auditor...........
The funds raised were used to partially fund the acquisition of a 50% interest in Compania Minera Santa Barbara, and for working capital purposes.
As mentioned below in Note 2, the consolidated entity has a further obligation to pay U.S. $3.5 million as part of the acquisition of a 50% interest in Compania Minera Santa Barbara. This amount is payable upon first shipment of iron ore.
........................And ADY will receive $US2.25 million one assumes, so they have to find US$1.25m for a month until the next $2.25 million comes in - and they have a five year agreement with Cometals.......
The consolidated entity will need to raise additional funds to meet this obligation and to provide additional ongoing working capital. The directors believe that additional funding can be raised to meet these requirements through additional fund raisings.
Whilst the directors are confident that additional funds will be raised, a significant uncertainty exists with respect to raising the required funds.
.......really I thought they had $30m in converting notes out there being spruiked, they have a shareholder MTM who is 6 cents in the money to convert their options - he might give them a cool $17.5m, they have a USD$530 million income stream from the iron ore business over the next 13 years - surely someone who wants a fee to lend them a few bucks on a cashflow basis - and the two main guys on the board are both from "Macquarie millionaires factory" structured finance experts - give me a break auditors....
Based upon the views outlined above, the directors believe that, whilst there exists significant uncertainty with respect to going concern, the going concern basis of preparation is appropriate.
Should the Company and Consolidated Entity be unable to continue as going concerns, they may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements.
These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities and appropriate disclosures that may be necessary should the Company and Consolidated Entity be unable to continue as going concerns.
NOTE 2 SIGNIFICANT AFTER BALANCE DATE EVENTS In February 2005 the company received funding of $9,999,998 representing the initial payment of $5.10 per note in respect of the issue of 1,960,784 converting notes at $10.00 per note. This issue was part of the issue of converting notes approved by shareholders at the Annual General Meeting held on 10 December 2004. Procurement and Selldown fees relating to the issue totalling $1,325,000 have been paid by the company. The Company has an ongoing arranger agreement with Intrepid Finance International Limited to act as arranger for capital restructuring and financing.
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I really can't see this anything but this company going under, or a massive capital raising:
.......your MC disease is cutting in - on my calcs they have access to:
$10m on 14 Feb 2007 $15m on the final sell down of the converting note $17.5m from the options when they are exercised $ dividends from the NILNAV investment $ loan funds against the rincon salar which has a book value of about USD$3.5m from the last balance sheet $loan funds of about $400m from the iron ore project
plus whatever their structured finance guru on the board and their well connected mate in London gets up to......maybe Mining (Scotland) ltd wants to get in on the act..........
1) Of the initial $8.675M raised from the 1st batch of convertible notes, $8.5M has been spent buying their iron ore tenements.
........ your analyst needs a shot of anti MCD quick - the press release says 15 million shares = A$1.5m, plus USD$5m = A$8.5 million then auditors tell us another $US3.5 on shipping the ore.... you have over stated it by $1.5m..... mining detail for a MCD analyst.
If 'Intrepid Finance' decide to pull the plug on the 2nd half of the convertible notes
.........your analyst didn't read the AGM addendum very carefully - intrepid acted as a broker they onsold the notes to the end subscriber - they are stuck with them for two years at 7.25% interest rate (wish i could do it at those rates - my margin loan is 7.99%!!!) - if the subscriber defaults withthe next $10m payment - ADY wins !!!! they get his $10m and the notes are cancelled!!!!
(which they can easily do, ....can I tell you garbage...
citing the fact that the directors think their company has "significant uncertainty with respect to going concern"), then the company falls over. .........This is exceptionally poor inference by your analyst mate - did you hear him correctly maybe he said he was something else...???
2) If they do get the 2nd half of the funds: 1,960,784 * 4.90 = $9.6M, before costs.
Of this, assuming no capital raising : a) US$3.5m will have to goto Wydnham when they first ship their ore ie $4.5M -- Funny how this wasn't mentioned in the original Feb 23 announcement???
.......why would they....look what Twiggy released and now he has egg all over his face ....september is still a long way off.........
That leaves $5M for working capital. That's not really enough to set up a new mine, im sorry.
...........yes you should be sorry for your crap analysis - i would apologise to everbody on hot copper - refer above to no issue capital raising mechanisms used by well qualified executives in mining companies.....
Which leaves the possibility of a capital raising...
...if you can't execise your brain and think.....
465Million shares on the market now, plus 165M 10c options. ... you goose its 175 million ....gee I wonder what would be easier - exercising the options in the money or letting the company go down... an astute fiancier and investor might have a difficult decision - staring you in the face saxien.........
Good luck getting an early conversion of options. .......
..........saxien ever been to the casino - you will probably get better odds.....ADY conversion will be a shoe in ...don't know when but it will happen...money for jam after taking a huge out of the money bet.......
A 1:1 rights issue at say 12c would raise $56M
..........why bother these guys will probably raise $150 - $200mm of junk bonds to be paid out of revenue/profits with their contacts in NY (Cometals) and London (the professor).
(i'm suprised they didn't announce one when the share price was >20c). Enough to get your iron ore mine up and running. Heck, you may even have enough spare to set up the non-lithium mine (US$4million), or the lithium mine ($US7-10M)
Just a reality check for some people with the 'blue sky' targets.
....... the real analysis is this ....
- six months profits - iron ore - USD$5m -next 12 months -2006/2007 iron ore - USD $30m sodium sulphate - $1m Boric acid - $2m they will have A$25 million in the bank
total EBIT - USD$33m exch rate 0.77 $A42 million 840 million shares on issue then, (465+175+200) eps 5 cents per share p/e 10 (FMG 14.7) 50 cents a share................
.......congratulations to the Board for cleaning out the dead wood - and appointing qualified and experienced people - this is fundamental analysis........
ADY Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
