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

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