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

This report might help. its from June 05 but you can see the valuations :

1/ Present case 330p to 380p range when remaining Chelyabinsk license is purchased and with Moly at 20$ average in 2006.

2/ Present case 200p to 240p range without the remaining Chelyabinsk license percentage and Moly at 20$ average in 2006 (WHERE WE ARE NOW)

3/ Future with Moly from Shorskoye and Copper from Chelyabinsk then around 550p per share :)


The report link is below, PDF file :

http://www.fox-davies.com/FDC_Eureka_Report_220605.pdf

Has to be good news for Eureka, the Moly required for the steel to make this pipeline will increase demand. And, Eureka can supply Moly by road transport, a short distance to China, meaning they can supply with much cheaper delivery charges, meaning they should win more orders !

http://www.chinadaily.com.cn/english/doc/2006-01/19/content_513590.htm

"PetroChina to build two oil pipelines
By Wang Ying (China Daily)
Updated: 2006-01-19 06:45"

http://www.minesite.com/storyFull5.php?storySeq=3265

Feature Story Date: January 26, 2006

Eureka Mining Moving Fast At Both Chelyabinsk And Shorskoye.

By Jack Hammer

What with recurring illness and deal-making across central Asia, Eureka Mining chief executive David Bartley didnt have much time to stay in touch with the City last year, except when he was announcing big deals. But although the newsflow was sometimes a bit thin, those long hard hours on the road are beginning to pay off. Eureka is shaping up nicely full scale mining on the fifty per cent owned Shorksoye molybdenum project in Kazakhstan is imminent, and a pre-feasibility on the Chelyabinsk copper project in Russia is underway.

So, late in December Mr Bartley promised to pay more attention to the deskbound folk in London, to be around more, and to provide regular updates. He was off alcohol back then, on account of his recurring bouts of malaria, putting him for the time being - and somewhat unusually - on a level with Joe Nally, the mining money-man at Cenkos who is a close ally, and who has given up the booze for January. But some resolutions are harder to keep than others - David Bartley is not currently in town, and nor is he in touch. One mining analyst is under the impression that hes lying in hospital in Australia with another attack of malaria, but a PR for Eureka eventually establishes that hes in Moscow so, sorry, can I get back to you in two weeks?

Fair enough its not so long since Mr Bartley visited London to update press and investors. But he also spent a fair bit of time on that visit moaning about weakness in Eurekas share price. There are moves afoot to rectify that weakness from the broking angle, but if Mr Bartley wants the shares to firm up someone needs to be here pushing the story full time.

Its not clear either what exactly Mr Bartley is doing in Russia. With any luck though, its something to do with the pre-feasibility study on Chelyabinsk, which is due to be delivered in the first quarter of this year.

Chelyabinsk is a copper-gold project with a total resource 687 million tonnes at 0.7 % copper equivalent in the Russian C1 and C2 categories. Those numbers are derived from three deposits within Chelyabinsk, and a JORC calculation has been made and verified by Snowden - for Miheevskjoye, the largest. It shows 405 million tonnes at average grades of 0.4 % copper and 0.22 g/t gold in the inferred category. Its not world class, says Richard Chase, who continues to provide analysis for broker Ambrian, in spite of a recent move up the foodchain there, but its not bad either. It should be cheaper to develop than Montericcos bigger Rio Blanco project in Peru for example.

Last year Eureka signed up Barclays Capital to act as advisor on financing. Barclays chief Gerard Holden went out to take a look for himself, was favourably impressed, and on current plans could be looking to put the finance in place before the year is out. Post tax, assuming 60 per cent debt finance, and on a 15 per cent discount, Ambrians Mr Chase values Chelyabinsk at US$105 million. This isnt going to be a 200 million company, he says, before adding, with one eye on future developments, at least not on these assets.

Eureka is not a one trick pony, however. In the summer David Bartley pulled off a deal in which the company gave up 50 per cent of Shorskoye in exchange for access to the plant and processing facilities of local operator Kazatomprom. Thats a lot of a project to give away, but the point was to get producing fast. Molybdenum wont stay above US$30/lb forever the long-term average is below US$10/lb. Ambrians Richard Chase says: I wouldnt be surprised if Shorskoye is all done and dusted in three years. But over those three years he forecasts nearly US$45 million in net cash flow, assuming a (currently) conservative US$20/lb molybdenum price. Those are reasonable numbers, and should sustain Mr Bartley nicely on his travels, as he works up other early stage exploration assets and hunts down more deals.

Companies featured in this Story Eureka Mining Plc (AIM-EKA)

And there is that first step , roll on the news in the coming weeks :)

Eureka Mining PLC
27 January 2006

Eureka Mining Plc ('Eureka')
Change of Adviser

The Board of Eureka has appointed Cenkos Securities Limited as its Nominated
Adviser and Broker and Ambrian Partners Limited as a joint Broker with immediate
effect.

Enquiries

David Bartley, Eureka Mining Plc - 020 7921 8810
Nicholas Wells, Cenkos Securities Limited - 020 7397 8920
Emma Priestley, Ambrian Partners Ltd - 020 7776 6465

A return of buyers today, I think they might be well timed.

I want news on the BFS for Chelyabinsk asap, as it looks like a very good time is approaching for copper, if Chelyabinsk is producing in 2008, it will be perfect timing to catch the wave maybe.


Extract from Jan 06 report on copper (from http://www.miningnews.net) :


"Meantime a report early this month by UBS Warburg will have seen miners lighting up cigars and breaking open crates of the finest malt whiskey.

UBS said there were "strong similarities" between the positive fundamentals for oil and copper, including:

- Decline in reserve quality, and cost inflation
- Chinese demand
- Energy link (Electrical power requirements are growing, and the potential for increased copper use in hybrid autos is being driven by high energy values)
- Fund money
- Bottlenecks (Refining in oil, smelters in copper)
- Corporate perception M&A activity (It appears that both oil and copper companies remain unconvinced that high prices are here to stay; a consequence is conservatism on capital spending delaying the supply response. Even so, competition for operating assets remains heated)
- Elastic demand response to high prices (Consumers of both products looking at substitution)
- Focus on inventories

"While the similarities between the two commodities are quite striking, we believe that an argument could be made that copper fundamentals are superior," UBS said.

"A key difference between the two is supply reaction; a new copper mine takes a least two years to build and much longer to find; an oil well takes less than a year to bring to production.

"Furthermore, the copper market has no OPEC to satisfy unexpected demand when it arises."

All of which begs the question, is this copper nirvana?"

Extract from an 18th Jan The Australian report :


"A year ago copper was forecast to average $US1.23 a pound but came in at $US1.66 a pound. The red metal is now at a record high around $US2.15.

In a report from London last week, Credit Suisse First Boston warned that the market could be seriously underestimating the strength of the metal price outlook.

According to CSFB's scenario, mining executives remain scarred by past busts and are too focused on value, so they are reluctant to commit themselves to new mines, the costs of which have jumped 20-50 per cent in the past five years. That means supply simply won't ramp up quickly enough and the market is in for further metal price spikes in the next two years.

CSFB estimates that in metals such as copper, zinc, nickel and aluminium new supply won't be enough to cover demand growth of 3 per cent.

"Mining executives today are too focused on returns and aren't incentivised to take risk to build new mines or smelters. Share buybacks and mergers and acquisitions are a lower-risk strategy than developing a mine with four-year lead times and the uncertainty of where prices will be once the project is finished," it says.

CSFB says that while Rio Tinto and BHP Billiton are pulling out all stops to expand iron ore production following a 71 per cent price leap last year, growth plans are generally characterised by smaller brownfield expansions rather than large new projects.

CSFB estimates that for a new copper mine to earn a 20 per cent return, it needs a long-term price of about $US1.50 a pound, up from current thinking of US90c a pound.

CSFB sees copper prices averaging a whopping $US2.30 a pound this year.

The wide range in forecasts makes it tough for investors. Diversified majors such as BHP and Rio Tinto are trading at 10-11 times earnings, which is approaching the high side, if commodity prices are peaking. But if you plug in spot prices, they are trading closer to an attractive 8 times earnings.

According to UBS, the sector's quarterly reporting season, which kicks off with Rio's production report, could trigger a fall in prices if the reports highlight continued cost pressures.

But it says any fall should be seen as a buying opportunity. "Whereas we believe the market is lagging on updating for rising costs, we believe it is also lagging on upgrading for higher commodity prices," UBS says. "

Nice to see EKA make a solid move upwards today :)

Some decent buying again this morning, strength building and news should explode her....... :)

Another big T just gone through, this is looking up now, keep it up whoever it is who is buying the big lumps :)

Papalpower, did u get a chance to look at UEP?

Yes, and put a note on the UEP thread. Here is hoping we get some more solid buying at EKA tomorrow, something is happening now and lets have some more of it.

Good info from an AFN post;

unionhall - 1 Feb'06 - 15:03 -

Meanwhile, Phelps Dodge Senior Vice President for Marketing Arthur Miele Tuesday forecast a $2 per pound copper price during the first quarter, along with a 3.5%-4% growth in copper consumption this year. He also predicted an $18 to $25 per pound average molybdenum price during 2006 with a first-quarter average price of $22/lb.

A really explosive formula building, BFS done on Chelyabinsk ? License conformation on Chelyabinsk ? Moly production a go ?, if they all come in then prepare for a shoot through 200p, risk yes, but big rewards very much possible with that risk.



unionhall - 1 Feb'06 - 15:21 -

I understand Shorskoye production mid-April.

Stockpiled ore from mining confirms required grades.

All equipment in country following delay at customs. Clear for takeoff.

Trying to force final positive confirmation re Chelyabinsk while work continues on site.

Latest news we have from unionhall is :

David Bartley was in Russia beginning of week trying to finalise Chelyabinsk.

In all day meeting in London today.

Back in Russia next Monday and Tuesday.

Todays rise, two things could be happening, either CER is now increasing their EKA stake with the money they have after the Gold Mine sale, or the Gold Mine sale by CER has paved the way for EKA to get Chelyabinsk sorted out and 100% owned. We might be getting news next week, keep a close watch on it, something is surely happening I think, and we might get to now it soon.

New thread started for the next phase of EKA progress, at link below

http://www.moneyam.com/InvestorsRoom/posts.php?tid=9428