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Tagged with: Consolidated Minerals

Feb 2003 - Cons Minerals

Consolidated Minerals Ltd (CSM) – Extending its Life Beyond 10 Years at Higher Rates of Production

  • CSM has already established an ore reserves/resource life of 10 years at Woodie Woodie Manganese and is extending Coobina Chrome’s life towards 10 years. In the current exploration programme, CSM is aiming to extend the lives of both operations beyond 10 years and enable Coobina to consider doubling its chrome production to 500,000tpa (our modelling factors in an increase to 350,000tpa).
  • CSM’s annualised manganese production appears to be capable of increasing closer to 580,000tpa of lump and fines, of which the lump component could be >380,000tpa based on the progress that has been achieved in the 6 months to December 2002, and the new reporting disclosure.
  • CSM appears to be fairly valued, however, its products are in a poorly understood “area” of the market in which product sales and prices realised are not easily identified (like precious or base metals). Consequently, CSM’s share price appears likely to rerate according to its profit results and resulting P/E ratios, Price/cashflow ratios, and relatively high dividend yields (currently of about 8%).

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Aug 2005 - Cons Minerals

Consolidated Minerals Ltd (CSM) –Becoming a Mid-Tier Diversified Mining Company

  • Consolidated Minerals’ operations are based in WA where it has established an ore reserve/resource life of more than 10 years at Woodie Woodie and a position in the market of consistently producing one of the highest quality manganese ores in the world, currently at 1mtpa. CSM has also been producing 250,000tpa chrome from Coobina, and is now enhancing its product range with nickel production from Reliance’s Beta-Hunt mine, followed by future copper production from Jabiru.
  • CSM’s annualised manganese production has risen to 1.0mtpa and appears capable of reaching at least 1.2mtpa or so. When Coobina runs out of ore (in possibly 5 years’ time), it is expected to move the Coobina plant to Woodie Woodie South and increase production to at least 1.5mtpa of manganese.
  • Production from Reliance’s Beta-Hunt mine is expected to double when East Alpha starts in MQ 2006 and builds up to 4,000tpa to 5,000tpa Ni by December 2006, increasing total mine output to a credible 9,000tpa to 10,000tpa Ni. CSM has a long-term target of producing 15,000tpa to 20,000tpa Ni which appears to be attainable, particularly when it has its own concentrator.
  • CSM is able to have its own concentrator treating nickel ore from old WMC nickel mines because Reliance obtained the nickel rights from Gold Fields, and is hence capable of reaping the benefits like Jubilee (JBM). It should also receive the gold credits from its orebodies, & expects to treat orebodies such as TIR’s Armstrong.
  • The market has upgraded CSM as it achieves higher profits and dividend distributions. This trend has resulted in CSM’s share price increasing by almost 7 times in the past two years from 62c to its current price of $4.00, and is expected to continue, especially as its nickel production strategy unfolds.

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