To buy or not to buy, that is a question which the market should...

To buy or not to buy, that is a question which the market should be able to answer by comparing companies with similar assets or production.
The following companies have some similarities to Focus and could be compared to Focus either in assets or production.
Avoca capped at Aus$350M with a resource base of 1.35Moz, started production July 08 with a brand new $50M, 1Mtpa diesel/gas plant at an annualized rate of 160Koz at sub $500 cash cost per oz.
Current mine life 3-4years based on current reserves with excellent potential within a package of tenements covering 2700km2 between Norseman and St Ives however the size of the tenement package is a serious contingent liability to maintain the expenditure commitments as well as the rents and shire rates. Most of the ground has no nickel rights.

Integra capped at Aus$75M with a resource base of 1.8Moz @ 2.7g/t/Au.Recently bought New Celebration 1.2Mtpa plant and will expend $50M to move and supply infrastructure such as diesel/gas power, water etc.
Forecasting production late 2009 at an estimated cash cost per oz of $504. Pre-feasibility and feasibility remain to be completed. No known Nickel assets.

Ramelius capped at Aus$124M with a resource base of 83,000oz, at Wattle Dam started a cut back July 08 to develop an UG mine estimated to produce 67,000ozAu over a 12month period at an estimated cash cost of Aus$360 per oz. Last year they bought the Burbanks plant with a capacity of 140ktpa. Wattle Dam is a high grade gold mine hosted by ultramafics which are notoriously difficult to model and mine. Ramelius has some exposure to Nickel with a JV with Pioneer Nickel with best intercept of [email protected]%Ni.

Silver Lake capped at Aus$41M with a resource of 1.1Moz, started production at Mt Monger April 08 producing annually an estimated 35,000 oz at a cash cost 0f $542 per oz through the recently purchased 300ktpa Lakewood Plant situated 55k’s to the NW at Boulder. Expect to bring The Murchison gold assets, Comet/Tuckabianna into production late 2009 at an annualized rate of ~80,000-100,000 oz.

Focus capped at Aus$33M with a resource base of 1.8Moz @ 2.8g/t/Au, started gold production April 2008, forecast 54,000oz financial year 2008-09 at a cash cost of $475 per oz($2M+profit per Month) ramping up to 100,000 in 2010, utilizing the 3Mile Hill 1.2Mtpa currently on care and maintenance, which is on sec power, located on Kalgoorlie to Perth Highway within 15kms of major ore sources. Focus is currently toll treating Perserverance ore through the adjacent Green Fields Plant with a 10 year agreement to treat up to .5Mtpa. Then there is the Nickel. Focus owns 100% of +35km strike length of live ultramafic komatiite contact hosting 6 known type2 Kambalda komatiite Ni Sulphide deposits, this is like owning the whole Forrestania Belt containing Western area’s Flying Fox etc. The Nepean mine produced 30,000Ni tonnes up to 1987 and closed with 11,000Ni tonnes in remnant ore(500,[email protected]%Ni). To put this in perspective Independence bought Long Shaft which is the same Ni style sulphide deposit as Nepean and Flying Fox in 2002 for $15M. At the time it had ~ double the Ni resources that Nepean currently has and since then has produced $130M in profits and currently has 3X the Ni resource it started with. Nepean is the last major type 2 Kambalda Komatiite Ni deposit that has not been drilled at depth as it was cutoff by flat lying intrusive pegmatite at 500m very similar to Western Areas Flying Fox. This type of Nickel deposits have very well known geological characteristics such as they occur in clusters, the grade in the nickel channels generally increases with depth and they have long strike lengths. The other important point is that the ore above the pegmatite could not have got there without the source being down dip or below the pegmatite.

I think it is fairly clear that Focus’s cap of $33M is covered by the value of the plant and there is no recognition for either the gold or the nickel assets. There appears to be no rational reason for the low market cap so either Avoca,Integra,and Ramelious are over capped and the market has got it wrong or Focus is severely undercapped. I have heard that the low price could be due to the number of shares out ,1.2B, and they should reconstruct however just look how the market savaged Dioras share price when they reconstructed.

In conclusion it's blatently obvious that the share price is being capped and the situation reminds me of what is happening to CFE. Something is coming but in the meantime it's a screaming buy.