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

Could the company sell future production at a discounted price to take advantage of the currently high prices?

New Sums

3,800,000lbs of molybdenum last quarter at $46.6 per pound minus $5 in extraction costs

3.8mill x (46.6 - 5) = $158 million approx = 86.6 million


Current Market Cap 24 million

If assume valuation on 8 times PE in 4 quarters not one

86.6 million x 4 x 8 = 2,771 million

2,771million / 24 million = 115.5 times potential multiple of current share price



Next Year

Production target 20,000,000lbs molybdenum according to tallsii's statement above

20,000,000 x 41.6 = $832 million approx = 456.3 million

assume valuation at 8 times PE

456.3 million x 8 = 3,650 million

3,650 million / 24million = 152 times current valuation

or current sp x 152 therefore 137p x 152 = 20824p = 208.24 each

Can U look over these tallsii

Jimbob

The price tend to go on is that of Molybdenum Oxide. This one is quoted on the Monterrico website and is currently sitting at $38.50. The two ferro molybdenum prices did shot up last week, suggesting the underlying market is still rising.

As for the sums, if we are right, then we could be looking at a share that will make the returns on Asia Energy look like a deposit account. But as we know if something looks too good to be true, then it probably is. So don't put your house on it just yet!!

Tallsiii

wise words tallsiii! am i right in saying there is news out in the next couple of weeks?

There have been a number of timescales given for the final announcement on the Shorkye fesability study, but I hope there will be something out within a month.

Shorskye is a very hot prospect, but the future beyond that looks very bright also. Chelyabinsk in Russia is due to commence production in 2006 if all goes well with the fesability study. The resource estimates for this mine are 3.37 million tonnes of copper and 3.61 million lbs of gold.

If you assume a conservate $1 per lb for copper and $300 per lb of gold, then valuation looks very good.

3.37 million tonnes of copper = 6740 million lbs copper = $6.74bn

3.61 million lbs of gold = $1.083bn

After extraction cost and discounted cash flow this may boil down to a valuation of just $1bn.

Again this looks too good to be true, but if it is, then it will certainly give them something to be playing with when the molybdenum price has come back down to earth.

Good day so far half of me wants it to stagnate for a bit so that I can try and get some more funds together.

Maybe we should close down the thread for a few weeks until the news comes out. There are only really three of us at the moment anyway.

Tallsiii

No, I'm reading you!

Cheers, Madison

Only kidding! This board is a wonderful sense and sanity test for my analysis.

we love you man!

Healthy buying so far

yes 50k bought so far today. There seems to be a very steady upward path forming in this share.

Good day occasional chunky sells, people doing some trimming as price rises ?

or something else ?

Up again but chunky selling going on with lots small buys

opinions welcome !

50/- at 155. nice. i am in (not the 50/- though!)

Still waiting for the news.

the moly price is now up to $39.25. If there is going to be a major drop off in the price of moly, then it looks unlikely to be happening this year.

i agree. tallsiii - check out the CSB thread. the IB Daiwa stake has quadrupaled since i saw them...speak later.

Tallsii U still planning to go to AGM?

Will u give us a summary?