EKA are expecting to mine 3.8 million lbs of Molybdenum this year. For the more sceptical amongst you, read this to confirm:

http://moneyam.uk-wire.com/cgi-bin/articles/200412150700023844G.html

They own the mine and the molydbenum in it has been independently varified as stated in the announcement linked above.

Molydbenum currently trades at around $38.50 per lb, you can check this at:

http://www.monterrico.co.uk/s/MetalPrices.asp

so do the sums 3.8m x $39.25 = $149m = 82m

Eureka Mining's market cap is 26m

In 2006 they expect to pull over 10,000 tonnes (20m lbs) of Moly out of that mine.

On top of all that they have recently aquired a mine in Russia with estimated contained metal of 3.32 million tonnes of copper, 3.26 million
ounces of gold and 98.9 million pounds of molybdenum. They hope to complete the feasibility study for this one in 2006:

http://moneyam.uk-wire.com/cgi-bin/articles/200501130700033169H.html

Interesting background story to Moly;

http://www.cozine.com/archive/cc2005/01370511.html

The last 2 trades at mid price look like someone went around the MM's looking for what they would sell off at mid price to allow the MM's drop their holdings down. A positive sign that someone is interested in buying large chunks.

Would really like to know if production is still due for Q1 2006. If I could be sure of that, then i'd probably top up.

tallsiiii...this pup has cost me a few quid!

how are things old boy?

Rgds
PT

Hi Prop, things are good on the whole. The new issue hit this one quite badly. But at the moment there is no reason for it to be 20% below the original float price when they are now in a so much better position than they were then. They have delayed moly production from the Q4 2005 that we had expected, but if they are in line for next quarter, then they are severly underated at the moment.

Moving up now, bid rumours hotting up for the Chelyabinsk license ???

During writing the last post, I managed to talk myself into buying another 10K. So that explains some of the move.

What rumours are about at the moment?

The Times one, stating they were close to buying the remaining percentage of Chelyabinsk so that EKA then holds 100% of it.

This is cut from RNS on 15th June regarding government co-operation:

On 13th January 2005, Eureka announced the acquisition of 51% of the Chelyabinsk
Copper/Gold Project in the southern Urals region of Central Russia and, subject
to the satisfactory conclusion of a feasibility study, the Company has the
exclusive option to acquire 100% of the project.

To me it looks that if the rumour about aquiring the remaining 49% is true, then it is likely that the feasability study has arrived at a positive result.

Production and sale of Moly is now within three months, so January/Feb should see this go significantly higher !

This is the only free graph I know of, its small though, but you can see the price is still well above 19$ and demand will cut in late Jan/Feb again to boost the price, so on that score its looking very good.



and from the company on Moly cash generation targets for first year (Q1 06 to Q1 07);

The Company has used a molybdenum price of US$19/lb throughout the first year and US$12/lb thereafter to calculate cash flows arising from the project.

Once Moly is being delivered the cash flow from this will give EKA a very low PER ratio going forward, so this alone is one area where there is massive upside to come.

Excellent write up and full blown buy rating from the IC just released.

Also house broker Ambrian says Moly at 20$ should generate for EKA cash flow of 21.8m $ in 2006 and Ambrian has a price target of 175p.

Should be blue today with the IC tip.

The article also says EKA "vehemently denies" the rumours of troubles with the Chelyabinsk license.

Cheers Papal, piled in for a load more this morning at 94/95. I pretty confident that that was the bottom. Worth getting out of bed for!

Am suprised that they set the target at 175p as that would still leave the co. on a PE of under 3. Cash generating with massive potential in Chelyabinsk. And as for the Moly price, looking at the historical chart it seems that it followed the last commodities boom to its peak in 79/80. There may still be more upside to come for moly!

Going well today, taking into account delayed trade reporting, its 6500 sells and all the rest are buys.

IC has recommended this as a buy today. This has helped it move up in early trades

Yes g64946, it has.

tallsiii, I think the Ambrian note is quite old and conservative, they will surely put out a new one once we get the January (hope so) news on Chelyabinsk. Once actual cash generation starts and we know the trading range for Moly (which should be higher in Feb/March) then the targets will be raised again I think.

My target is over 200p come end of 2006 !

Yes I can assure you that the two big sells were actually buys. Tempting to close today with a 2.5k profit, but am going to be in this one for a while. Positive news on Chelyabinsk and confirmation of cash flow could finally get the co. recognized.