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Kalahari Minerals (KAH)     

julian1976 - 30 Mar 2006 08:45

Chart.aspx?Provider=EODIntra&Code=KAH&SiChart.aspx?Provider=Intra&Code=KAH&Size=



As copper becomes ever hotter property and the tantalising price of $3/lb heaves into view, at least for the optimistic among us, companies with their focus on the metal naturally become more interesting. A recent newcomer to the London market, Kalahari Minerals [AIM:KAH] can offer investors no less than three copper projects, with a uranium joint venture thrown in to add piquancy to the proposition.

Altogether, Kalahari can already boast an estimated 250,000 tonnes of copper in the ground across its Namibian ground, which makes it clear that the company has moved beyond exploration and into the pre-feasibility phase with its two key projects. The area in which the company is operating was explored preliminarily by other players back in the 1970s, and a sizable portion of the presently known resources originate from this spell, but failure by those then exploring to come across any very large targets plus a deteriorating political situation in Namibia brought proceedings to a halt.



Now that the copper market looks very different and the politics of Namibia have improved, Kalaharis ground is a lot more desirable. Indeed, the companys Chairman Mark Hohnen admits that it has been lucky to have been able to stake the areas it has, which essentially amount to a large slice of the Namibian section of the Kalahari copper belt, which has some geological similarities with the much storied Zambian copper belt.

Kalaharis first order of priority is the Dordabis project, within which it has homed in on a deposit known as Koperberg. Drilling here has identified oxide and sulphide zones of mineralisation and recorded some good intersections, the highlight of which has been 5 metres graded at 3.43% copper. A small scale pilot processing plant is already recovering copper cathode on site.

The Koperberg resource is still open, and an alluring possibility raised by Hohnen is that it could conform to the Olympic Dam geological model. That is, a massive body of IOCG (iron oxide copper gold) mineralisation with significant smatterings of uranium. It is too early to tell whether this is the case or not, but such a scenario is certainly something pleasant to dream of for Kalahari shareholders, and the company has allocated funds specifically towards testing this hypothesis.

Kalaharis second key project goes by the name of Witvlei, and hosts five known copper deposits along with a number of prospects. The next step for the company will be to try and expand the existing deposits and define resources at the prospects in order to come up with a total resource of a potentially economic size.

If this resource development programme comes up with the goods, Hohnen suggests that an attractive option for Kalahari at Witvlei may be the tried and tested development model of establishing initial cash flow from oxide material before moving on to trickier-to-process sulphides. The same development path could also be worth considering at Koperberg if the Olympic Dam model is not found to hold true there.

Kalaharis only grassroots stage project is Ubib, which has been is known to host copper gold mineralisation with a hint of uranium but needs appraising more thoroughly before much more than this can be said. The project is located some 15 kilometres from Anglo Gold Ashantis Navachab gold mine, which obviously auspicates well. Current work is centred on stream sampling to help identify prospective target zones for the application of more advanced exploration techniques.

The Husab uranium project, which is a joint venture with Extract Resources [ASX:EXT] structured to give Extract 51% and Kalahari the remainder, has surprised both companies. Hohnen says that little was thought of Husab until last year, when some great radiometric anomalies were turned up. The presence of uranium along with other metals has now been confirmed, and diamond drilling to test the deposit at depth begins in the next couple of weeks.

Husab is located right between the Rossing uranium mine, owned by Rio Tinto [LSE:RIO; NYSE:RTP], and the Langer Heinrich deposit, which is being developed by the uranium darling of the Australian market, Paladin Resources [ASX:PDN]. Extract has already gained significant recognition from its constituency of investors for Husab, and if drilling confirms the joint venture partners optimism, then the project could well help win Kalahari some fans in the London market, where uranium plays are not as numerous as they could be, and hence much in demand.

Investment Outlook

Kalahari has raised 6 million by way of its AIM listing, and intends to devote the largest portion of this sum to work at Dordabis. Therefore, this is the project that investors should be keeping their weather eye on. Significant progress down the road to feasibility is sure to add value to the company, other things, such as the copper market, being equal.

But in addition to Dordabis, there is scope for either or both of Witvlei and Ubib to shape up and grab investors attention. Husab already stands out, and with a high level of market interest in new uranium projects still apparent, it is a nice asset for Kalahari to have.

required field - 19 Feb 2009 13:41 - 61 of 427

Took profit too early..., but there you go...could have gone either way !.

cynic - 19 Feb 2009 14:25 - 62 of 427

greed is a very seductive siren .... thus, it is exceedingly tempting to dabble in KAH and/or ENK or similar ..... MXP (for me) proved to be a very interesting example, in that i got in late but, on the back of the impetus (and the sheep!), i managed to make and bank a decent profit ..... had i hung on, that profit would now be pretty much if not entirely wiped out.

decisions, decisions!

required field - 19 Feb 2009 14:34 - 63 of 427

A bird in the hand is worth two in the bush but then again the great late "Benny Hill" said that two birds in the bush was more fun than one in hand !.

cynic - 19 Feb 2009 14:43 - 64 of 427

two birds in the hand in the bush ain't too tragic either!

required field - 19 Feb 2009 15:03 - 65 of 427

Euhh no !.

required field - 19 Feb 2009 15:09 - 66 of 427

Could not resist it but bought back via EML which has big exposure to this stock....the only thing the spread is not fantastic but has been reduced today....did not want to break the 30 day rule....wish I had these in a Sipp or such......EML is at an incredible discount to assets plus $ in hand and profiting with the exchange rate....started a new blog on there.

cynic - 19 Feb 2009 15:11 - 67 of 427

presume just an NL(?)-based metals fund in emerging markets

required field - 19 Feb 2009 15:14 - 68 of 427

With big exposure to KAH...but by my calculations the assets plus cash are worth 2.5 the sp !....and KAH is rising and pulling EML with it...risky but with great possible upside !.

required field - 19 Feb 2009 15:17 - 69 of 427

Blimey !, up it goes again...goodness gracious me ...where is this going ?.

required field - 19 Feb 2009 17:19 - 70 of 427

What a bouncy bunny this stock is !....up down and all around !.

niceonecyril - 20 Feb 2009 03:06 - 71 of 427

A valuation of URU

Excerpts from the Hanson research note on Jan 29th 2009 relating to company valuation:


For the purpose of our valuation we have used the long term $80/lb price and the current $/ exchange rate of $1.40/1.00. Other assumptions include:
Cash URU currently has 1.4m in cash (1.3p per share) and no debt. We believe that this is enough to fund the companys activities until July/ Aug 2009

Kalahari Minerals The total market capitalisation of Kalahari Minerals is 77.83m. At the current share price of 43.5p, this makes Niger Uraniums 27.68m shares worth 12.04m or 10.64p per share.

Henkries project - Niger Uranium has an NPV15% for the project of US$150m before tax. Our own valuation based on the original 3.72Mlbs estimate is US$17.43m after tax. As no resource has been defined we apply a x0.6 discount to NPV, which equates to 4.89p per share for their 74% stake.

o If Niger Uranium can define an 11 Mlbs resource we calculate an NPV of $102.87m after tax or 28.83p per share again at a x0.6 discount for risk. Neither valuation includes any upside for the unsampled Henkries South.

Niger project - We dont believe that this is economic as a standalone project at this grade and tonnage. The grades are low but are typical for the region being similar to those at Imouraren and Arlit. However, with Niger Uranium continuing its exploration drilling with two rigs currently on site, the company could increase the tonnage significantly.

o With existing operations in the area including those of Areva and China Nuclear International Uranium Corp., we believe that the most likely scenario is that URUs Niger project assets will be acquired by an existing producer. The Paladin (ASX:PDN) and Fusion Resources (ASX:FSN) deal in late December 2008 provided an indicated value to resources of US$1.97/resource lb. On this basis and factoring in assumed recoveries and a x0.5 discount due to the perceived risks in Niger, we arrive at a value of 2.35m or 2.1p per share for the Niger project.

Argentina UrAmerica This is more difficult to value as it is a private company. However, Niger paid $2.5m and 4,664,306 new shares for its interest which would value the stake at 2.3m or 2.06p per share.
Conclusion

Our total sum of parts value is 20.90p, which does not include any share holder dilution caused by any subsequent fund raisings. It also does not include any upside for Henkries North and South, the Niger exploration or expected upside in the value of the companys Kalahari minerals stake when the full resource is announced by Extract Resources.

Given KAH's sp increase, the 27.68mln shares is currently worth 17.7p per share (at KAH = 72.5p), which would increase the valuation to 28.02p per share.

And - If they can get the 11 Mlbs resource from Hankries, then this would increase the sp to 51.96p per share.

So currently they are trading at a discount of 12p (or 75%) to the current mid price.

The total KAH holdings is 178,912.255 shares
http://www.extractresources.com/InvestorInformation/ResearchReports/tabid/616/Default.aspx

Some great reading on Rossing South.

cyril

required field - 20 Feb 2009 14:28 - 72 of 427

Article in the Investors Chronicle this morning...bottom line is : it remains a buy at 64p.....that's not far from where it is now !......I might have sold out yesterday and switched over to Emerging Markets ltd (EML), but today I would not sell out if I were still in !.

niceonecyril - 20 Feb 2009 17:07 - 73 of 427

At the beginning of the week i would have snapped your hand off for 71p, so all in
all one has to be pleased. As we know nothing goes up in a straight line, Rossing
South still their with its rich vein of uranium and the struggle to gain control will not go away, a few profit takers and a poor market at the end of the week closing,
alters nothing.
The average time for a RNS concerning the project is about 1 month so we should not be to far awy from one, if as thought another increase in resources will add further icing to the already overflowing cake.
aimho
cyril

jkd - 21 Feb 2009 00:33 - 74 of 427

rf
not holding on too long and not bailing out too soon? what to do? maybe a happy medium ? i think your original first course of action would have been so. just my opinion. no one knows whats going to happen next but a stress free,relaxing,forget about position is always nice to have. just my opinion.
looking at the 15 min intraday chart i see it made high yesterday(thursday) in the 3-15 to 3-30 time frame. bull trap? notice the times of your posts at or around this time.both just before and just after.
anyway for long term holders what does a fifteen min chart matter? quite right. but having waited for just another 45 mins we could then see what the 4 hourly chart might be telling us.and it tells us a lot. and so it goes on followed by the daily, the weekly and so on.the correct procedure is to do this in reverse to what i describe, it just seems more relevant to me in this instance. i will skip passing comment on the daily and weekly please dyor.
the long term quarterly chart is showing that price is currently sitting/resting just above a fibonacci support level.whether that will hold or break i have no idea.
good tactics combined with money management is as important if not more so than being right or wrong.
i hope you are right, but if you are wrong i hope also that you have a good tactical exit strategy planned.it also helps to have a good tactical exit strategy planned to take some profit should we be right.never be afraid to take a profit.
all just my opinion.
good luck to you and all holders.
regards
jkd

required field - 21 Feb 2009 10:17 - 75 of 427

Thanks jkd.... I love to read your posts !...., I've taken a big profit (makes a change), and bought back in to EML with half my funds...who have just increased their position in KAH.....with that company they also have exposure to other rare metals and a possible zinc price recovery....EML and URU sp's are very much tied to KAH's sp....and there seems to be a lot more to come from them and a possible Rio Tinto takeover;... for the exit : I have to hope that I am able to be watching should something go wrong...(big problem for amateurs like myself that !), but all in all this still looks very promising with the experts predicting that uranium prices are due to rise sharply along with KAH's resource estimate...cheers !.

cynic - 21 Feb 2009 11:54 - 76 of 427

why not take the sweat out and place a running stop?

required field - 21 Feb 2009 12:45 - 77 of 427

I'm not sure if I can do that on my account, I'll have a look,.....don't you have to do that on purchase ?, I know you can do that with cfd's and spread bets.

cynic - 21 Feb 2009 14:48 - 78 of 427

guaranteed stops - yes ..... non, should be able to place at any time

niceonecyril - 22 Feb 2009 12:53 - 79 of 427

RF; you certainly can on selftrade and i would have thought it possible on Barc?

To trade or to hold long term?

For me i will hold my KAH and maybe trade my URU? The question will always be,
bank a profit against a possible T/Over offer, which will see the SP rocket. Top slicing is probably the most prudent way and i know many sucessful investors who do just that.
Personally i'm most bullish on this stock and small pull back's are just run of the
mill, it should also be noted that institutions hold more than 70% of stock and seem to be increasing?
RIO (who,s own site is next to Rossing South(they knows,you know))are not in this for fun?
aimho
cyril

niceonecyril - 22 Feb 2009 17:13 - 80 of 427

Peter McIntyre, Extract Resources MD, is on record as saying "Rsing South is the first new alaskite-hosted uranium discovery in Namibia in many years and is shaping up as the most significant discovery since the SJ deposit at the Rsing Mine". Put another way, Rsing South could emerge as the most significant uranium discovery in Namibia in some thirty years.
It also should be remembered that KAH is not just about Rossing South, they have exciting projects of their own.

cyril

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