epm.to

[22bulwer]

本日成交大涨．

[22bulwer]

13-Dec-2006 3,000 EUROPEAN MINERALS CRP-NEW
BUY -$40.95 -$2,770.95

3000@0.91

[22bulwer]

４０．９５，
白给了ＴＤ．
准备换到ＱＵＥＳＴＲＡＤＥ．

[22bulwer]

The Varvarinskoye Project

The Varvarinskoye project is a gold-copper deposit in the development phase. The project is wholly owned by European Minerals and currently has resources of 3.8Moz with proven and probable reserves of currently 2.34 million ounces of gold and 269 million pounds of copper at metal prices of US$375/ounce for gold and US$1.00/pound for copper. Production is expected to commence in the second quarter of 2007 if the spring/summer construction window is fully exploited.

[22bulwer]

Licences and Permits

The Republic of Kazakhstan has granted JSCV two exploration, development and mining licences. Both licences permit JSCV to explore, develop, mine, extract, process and sell precious and base metals found in the licence areas.

Licence MG666 covers 326ha which includes all the ore zones scheduled to be mined and was issued on 28 August 1995 and is valid for 25 years. Within this licence area permits for the design and construction stages of developing an open-pit mine and processing plant producing gold dore and gold-copper concentrate have been approved by the State;

Environmental permits
OVOS (Kazakh EIA), approved by Environmental and Ecology Ministry, ROK in February 2005
EIA in accordance with Equator Principles which constitutes an international standard of approval
Land Allotment permit, approved by Kustanai Oblast Land Committee, valid for LOM.
Technical Project ('Expertiza') permit, approved by State Construction Expertise.
Construction permit approved by State Architectural Committee on behalf of Industry and Trade Ministry, ROK
Licence MG866 covers a 220km² area surrounding (not including) licence area MG666. It was issued on May 30, 1996 and has been extended until May 30, 2006 during which time JSCV is required to spend an additional US$1 million (over and above the original and initial extension expenditure requirements).
The SSUC provides that gold and copper production from the Varvarinskoye Project will be subject to royalties of i) in the case of gold, a gross royalty of 1.2% of the value of gold produced from the Project based on the average monthly spot price of gold on the London Metals Exchange and ii) in the case of copper, a net smelter return royalty of 1% based on the average monthly sales proceeds of copper.

[22bulwer]

Financials

All equity case, before taxes and royalties Project Base Case: $375 per ounce gold, $1 per pound copper
NPV (0% discount) US$303.5 million
NPV (8% discount) US$134.5 million
IRR 30%
Payback 30 months

Operating Cost

Base Case Operating Costs (using copper revenue as a credit)

Years 1-6 Years 1-10 Years 1-15
Ounces Produced 902,039 1,448,877 1,934,068
Cash Cost/Oz, with Cu as credit US$87 US$130 US$158

[wz111]

Overlooked Emerging Mid-Tier Gold Producer a Multi-Bagger

By David J. DesLauriers
07 Dec 2006 at 08:05 PM EST


TORONTO (ResourceInvestor.com) -- European Minerals [TSX:EPM], which closed today at C$0.84, is an extremely undervalued emerging mid-tier gold producer and proprietor of the Varvarinskoye gold deposit, which your correspondent likens to a mini-Alumbrera, the deposit which investors will remember essentially made Wheaton River - generating the monstrous cash flows that took that company to the next level.

Indeed, we believe that this could be the cheapest emerging gold producer in the resource universe. Here’s why.




Where We Are Today

European Minerals is undervalued and flying under the radar screen because of delays which resulted from the insolvency of MDM, the company’s general contractor and turnkey construction provider at Varvarinskoye in Kazakhstan.

As a consequence of that firm’s bankruptcy, EPM’s debt facility had to be reworked, which given the pace at which banks operate took quite some time and required the company to do a second equity placement, which was not anticipated by shareholders.

Those unfortunate developments left EPM shares under constant pressure, and persistently undervalued relative to comparables and peers - but that is behind us now. European Minerals is slated to begin gold and copper production in October of next year.

Kazakhstan

Investors who feel anxious about the Varvarinskoye project’s location need to look at the reality. Kazakhstan is not like the other Stans or Russia, and with its considerable newfound energy patrimony in the Caspian Sea, is coming onto the world stage, and not in kleptocracy mode.

There have been a number of centi-million and billion dollar Kazakhstan mining IPOs of late primarily in the London market, and considerable mining investment in the country. Investors should keep the following in mind:

Kazakhstan has a GDP higher than all of the other Stans combined.
By 2010 the nation’s goal is to have a GDP per capita of $5,800 per head, on a par with Czech Republic, Hungary, and Poland.
The country has the same bond rating as Mexico.
There is no reason to believe that a threat exists to the mining industry in Kazakhstan or that there is any threat to Varvarinskoye on a project specific basis.

Reserves & Resources

Current M&I resources calculated at a ludicrous $375 gold and $1 copper stand at 3.8 million ounces of gold and 432 million pounds of copper.

As part of its debt package, EPM had to take on a gold hedge of 443,000 ounces at a gold price of $574.25, equivalent to 19% of reserves. This does not concern us, and we will address precisely why below.

European Minerals will be coming out with a revised reserve and resource estimate in the next couple of weeks. The banks force the company to use very low metal prices in its projects, but the crux of the issue is that EPM will continue to optimize its mine plan according to where metal prices are in reality.

At a recent presentation in Dubai, Tony Williams, Chairman of European Minerals said “As we develop more reserves, as we open up the mine, the percentage of hedging of the mineable reserves will fall to less than 10% (from 19% currently).” Read between the lines – the company believes that at current prices reserves are in fact double the published numbers.

That will allow them to grow output in a big way.

Cash Flow & Growth

Starting in October 2007, EPM will produce over 140,000 ounces of gold and 40 million pounds of copper per annum.

We estimate that incorporating European Mineral’s hedge at $575 on 75,000 ounces of production, and using metal prices of $625 gold, and $2 copper, EPM will cash flow $120 million in 2008.

That is equivalent to 43 cents per share. At $3 copper (current price), EPM would cash flow $160 million or 57 cents per share. On a gold-equivalent basis with copper considered as a credit, EPM is producing gold ounces, much like Alumbrera, at a cost per ounce which is negative by several hundred dollars!

What makes this story even better is that based on metal prices and the company’s substantial reserves, the plan would appear to be that EPM will double production in year 3 after a small boost in year 2. The year 2 boost would take gold production up to nearly 200,000 ounces per year with copper output remaining roughly flat. But the year 3 increase should see gold output expand further to 300-350 thousand ounces per year, with copper output of 80-100 million pounds.

That increase could all be financed out of cash flow, and would take cash flow per share numbers right through the roof. Not only this, several hundred million dollars per year worth of cash flow per year and 5+ million ounces of gold reserves make EPM a takeover target all the way up the food chain to the Barrick’s of this world – this is big enough for the majors.

So what’s the best way to capitalize on this?



The A Warrants

European Minerals has a series of A warrants [TSX:EPM.WT.A] which expire in April 2010. They closed today at C$.37. With an exercise price of C$1.20 per share, these are EPM’s best series of warrants. Further, with the long life, we believe that this is the best way to play EPM. The leverage versus the stock is substantial and in our opinion, performance in the warrants should be double that of the stock in the scenario which we envision.

Conclusion

We believe that given European Minerals’ substantial and growing reserves, and impressive cash flows and production profile growth, the stock is going much, much higher as it begins to be discovered, and now that the delays and financing issues are behind us. The truth is, based on what they have, and how peers are valued, it should be trading at C$2 per share right now.

In fact, EPM is separated from all other emerging gold producers because of the sheer scale of the cash flow that the company will generate. It is in its own league, and we would challenge readers to provide another name that could even come close to throwing-off this much cash year-in, year-out.

Indeed, taking our cash flow estimate of 43 cents per share at $625 gold and $2 copper, and applying a cash flow multiple of anywhere between 10-12 times, in line with gold producing peers and accounting for the substantial production growth which EPM will experience, we believe that a 12-18 month target price of C$5 per share on European Minerals is called for.

That would represent almost a 6 bagger in the stock from current levels, and over a 10 bagger in the company’s levered, long-life A-Series warrants.

This is arguably the cheapest emerging gold producer out there, and with delays firmly in the company’s past, deserves to be on everybody’s radar screen. EPM is a value, cash flow, reserves, growth and critical-mass monster.

The updated reserve report coming out some time in the next couple of weeks should catalyze this story, and astute investors who climb aboard before then should make superior multi-bagger returns.

[22bulwer]

sold 3000@1.21

[trueblue]

how is questrade?

[schulich888]

up up ..

[chrysler]

作者: 22bulwer

sold 3000@1.21

你也太小农了吧.我买了4万,都放了1年半了,成本是0.89.

[22bulwer]

作者: chrysler

你也太小农了吧.我买了4万,都放了1年半了,成本是0.89.

嘿嘿，有钱赚就好．

[不好意思]

才起步呢！
好，再看一天，不搞一笔好象对不起mm这么长时间准备？