if u didnt catch last mondays news / cmr
http://imagesignal.comsec.com.au/asxdata/20060508/pdf/00612464.pdf
This one came outa left field on the back of the oxides project approval and knocked me off my feet.
Bottomline, means on finalisation of this deal,
(1) CMR has a half free share of base metals oxides and sulphides projects thru capex and production, with Hunan footing the entire bill (approx 600 mill bucks) inc refunding CMR the oxides plant capex and exploration costs and footing most of next 5 years' exploration costs to fast track resource upgrades.
Hunan Nonferrous Metal Corp are PRC's biggest producer of non-ferrous metals (exc aluminium), mostly state-owned and newly listed on Hong Kong exchange. Their shares were in pre-open ahead of this deal (and one other local) and jumped 12% on release.
(2) Hunan takes up 10.4% of CMR per placement injecting further 30 mill cash into the Jungle King's kitty. This is unconditional. NOT the 30% reported in the AFR.
CMR is now around 50% foreign owned as our local instos still sit on the fence scratching their heads ...... poor show lads. At least no single entity holds more than around 10-11 % of the register which now reads like a who's who of the Olympian world. Lotsa bouncers at the door to keep the undesirables out it seems.
(3) This means that CMR is gonna be left with 90 - 100 mill bucks CASH, no debt, fully diluted share cap 115 or so mill shares with no more likely to be issued in foreseeable future, and immediate beneficiary of earnings from early 07 planned start-up of oxides production ..... poss 30-40 cps their share ?
This cashflow now has nowhere to go with sulphides now to be funded by the Chinese, so will prob head straight back into the hands of shareholders. At 5% effective "yield" say, this alone would support a 6- 8 buck share price u would think. Lot more I would think once u looked at what was ahead in way of capex / earnings expansions. Prob in line with my Chinese astrologer's 2009 call from 2 years ago haha.
But what it REALLY means for you guys in here and what shareholders have been waiting for for so long, is that CMR now has uncommitted cash cash cash to do the Rum Jungle JORCing justice and expose its glowing mellow yellow treasures asap as priority focus next.
CMR's uranium assets are NOT included in the Hunan Nonferrous Metal Corp deal. Hunan is just looking to secure the long term offtake of Cu-Co-Pb-Ni and others.
So where to next with a "free call option on uranium" and now also a "free call option on sulphides"?
Indications at last week's EGM were that FIRST Jungle-U JORC estimates are due in June from Mt Fitch reource.
Mt Fitch was in line to be Oz's 4th or 5th U mine back in the 60s but shelved before it began due to end of Gov contract back then. Heaps of holes were drilled back then and heaps more in CMR's program last year. Prob a few more left to do but based comments in Mining News recent survey, looks like the "Mt" might come up with 3 - 5 years' worth of Malcolm Humphries " 4 mill lbs pa "wanna" cake production.
And with the U-plant capex now in hand as well it seems, then any decision will be internal and based how soon EIS can be done and REGULATORY APPROVALS be given.
If FEDs are indeed serious, seems to me CMR could be producing yellowcake from the Rum Jungle about 2-3 years before BHP's planned Olympic Dam expansion comes into being.
Sooo here we go with a major test case for FED Gov's new U initiatives and promos ........ the Rum Jungle is in the NT under FEDERAL jurisdiction !
So how fast and how committed are the FEDs to new U for China now? Methinks we are about to see with Mt Fitch coming up soon.
The exciting stuff about all this is not Mt Fitch itself, cos thats only lower PDN-style grade entree to what else is likely to be served. Suggest u research whats on CMR's coming Jungle hitlist cos looks like CMR will be testing / JORC defining-redefining multiple targets within close proximity of each other and the central processing infrastructure being built at Browns for the base metals.
AS a long standing shareholder in CMR, personally feel like we are about to be served a multi-course banquet of golden cake coming into an early Christmas prob around my birthday in November :)
I aint no advisor, just a fanatic CMR groupie living and breathing this baby for a decade now .......and amazed at the momentum picking up right now when all the stars and planets finally seem to be cosmically aligned.
IMO, current market cap around 400 mill doesnt even do justice to the oxides start-up, with approvals finally in hand, let alone the sulphides deal just announced or the intense Jungle U-JORcing program about to start.
But thats MY opinion and now an extremely biased one.
IMO technos and fundamentals now falling into line and the few Olympian analysts now looking are licking their lips just as I.
Good luck to our U industry. Methinks the Rum Jungle Uranium Field is gonna be the next test case for the industry itself. The RJUF is in the NT and under FED government sayso. I believe Mt Fitch is on freehold land.
(20min delay)