quick analysis

Hi guys. i posted this on the zinc thread under best junior plays. i reposted it here for you guys.


Terramin TZN.

Market Cap @ $3.18 per share is $334.76 Mill fully diluted.
92.77 million shares. 7.5 mill unlisted options 5 million convertible notes.

Assumptions: $3000 usd/t for zinc $2000 Pb and .28c /gramme silver

3 Key Projects including one company maker.
Angas (Sth Aust) will be in production in Q3 2008 and is a smaller mine that has 243,200 tonnes of zinc and 94240 tonnes of lead and 103,360,000 grammes of silver for a total of $1 billion USD worth of metal assuming long term metal prices.
Capital expenditure is $80 million and is being financed with no effective dilution for shareholders.

Menninie Dam is the 2nd project in Sth Aust and is the largest known zinc deposit in Sth Aust and they have funded the drilling of this by JVing with ZFX and zfx is funding $8 million of drilling to earn 70% in the project. ZFX are spending that money and quickly. If the project is big enough for zfx, which they expect it will be, then it will be 30 million tones of zinc at 5.3% zn and 2.5% Pb and 20g/t silver. This is the worst case for TZN as anything lower may mean that ZFX wont exercise their option and will give TZN 100% of a largish mine of 20-25 million tones.
The capex on Menninie Dam is estimated at $300mil and TZN would need to find $90 mill of that for their 30%.
Menninie Dam is anticipated to be producing 140k tones of zinc from 2014 and 90k tones in 2013 over an 11 year mine life.

Algeria “the company maker” is a JV with the Algerian Govt. TZN 65% and govt 35% (they will dilute when they are required to contribute) I am led to believe that TZN will look for a JV partner to buy in and defray some risk rather than acquire the rest of the project.
They have recently released their maiden inferred resource of 55 mill tones at 5% zinc and 1.2% lead although it is believed to be a lot richer than that. The most recent drill hole a Tala Hamza revealed 123.3m at 10.1% zinc and 1.7% Pb. Kevin Moriarty said they were just beginning to scratch the surface of this resource.
My personal opinion is that between the Tala Hamza deposit and the North and South Deposits we should see 100 mill tones.
The Algerian resource is 10 kms from the major port and has good access to cheap labour and fuel and enjoys great government support.
The capital expenditure is estimated at only $150 mill usd by the company. Ord Minett are seeing up to $325 mill over two stages. Either way its very cheap and affordable. A lot of the large mines for nickel and Iron ore are expecting $1.6 billion in capex.

Terramin will fund Algeria with the revenue from ANgas plus some capital raising and finance.

The company has very little dilution and no listed options. They treat shareholders as important people and manage your funds as they would their own money.
TZN should see $6 within the next 12 months on the back of production at Angas and results of the JORC from Menninie Dam and some more great drill results from Algeria.

cheers
andrewe