Thompson Creek Metals (Blue Pearl Mng)

Molybdenum producer markets growth story to IPO investors
By Anette Jönsson | 2 April 2007

The company plans to set aside around $150 million for cornerstone investors from its $500 million share sale.

The name doesn\'t exactly role off the tongue, but if investors can get past that small problem, they will find that China Molybdenum, or China Moly for short, is actually quite a simple story – a mining company with one mine that produces a specialty metal which is in high demand by China\'s growing stainless steel industry.

And the one mine isn\'t just any old mine, but one of the largest pure molybdenum mines in the world with 498,000 tonnes of reserves. Much of the global supply of molybdenum is otherwise derived as a byproduct of copper processing, making companies with a primary focus on this metal something of a rarity.

The same mine also contains 506,000 tonnes of tungsten reserves, making China Moly the second largest owner of tungsten reserves in the world. This metal, which is a byproduct from molybdenum processing, currently accounts for less than 1% of China Moly\'s revenues but will become an increasingly important growth driver once the company completes the construction of its own tungsten recovery facilities by early 2008, sources say.



The company will also use the IPO proceeds to increase both the ore output from its mine and the processing capacity of various molybdenum products further down the value chain. Consequently it is being marketed as a growth story with a potential for 44% growth in net profit this year and 15% in 2008, according to a syndicate research report. This comes on top of 31% profit growth last year and 319% in 2005.

"This company has the necessary scale in its molybdenum production and it is in the right place with demand in China increasing rapidly," one observer says.

"There is also an M&A theme as the company is looking to buy up mines and mining rights amid further industry consolidation," adds another.

Molybdenum is used primarily to harden various forms of steel, making it more resistant to corrosion and improving its strength at high temperatures. Steel mixed with molybdenum has a variety of applications within the construction, shipbuilding, auto, defense and oil industries among others. What makes it especially valuable though, is the fact that it has few substitutes.

According to a Roskill Molybdenum Economics report, quoted in the pre-deal research, China\'s consumption of molybdenum grew at a CAGR of 17% between 2000 and 2005 which was 7.7 times the growth rate in the US, 5.3 times that in the US and 3.5 times the growth rate in Japan.

Tungsten too is used as a steel alloy and is a metal which should be familiar to Hong Kong investors after Hunan Nonferrous Metals, one of China\'s leading integrated producers of tungsten, completed its own IPO in March last year. Even those who didn\'t pay much attention to the IPO will be aware of HNF\'s spectacular 73% gain on its first day of trading. Since then the share price has continued to head higher and even after some volatility over the past month it closed at HK$5.06 on Friday – more than three times its IPO price of HK$1.65.

No doubt, investors will be hoping for similar medium-term gains for China Moly, which is currently pre-marketing an initial public offering of more than $500 million through Morgan Stanley and UBS. Notably, Morgan Stanley was also one of the bookrunners for HNF\'s IPO together with BOC International.

The molybdenum producer has already attracted the attention of a number of tycoons and corporate investors. According to sources, the company plans to sell around $150 million worth of shares to seven or eight such cornerstone investors who in return for a guaranteed allocation will commit to a 12-month lockup.

The final list of cornerstone investors has yet to be agreed upon, but sources say they will include many of the usual players who tend to participate in Hong Kong listings of large Mainland companies, including China Life Insurance, Henderson Land Development chairman Lee Shau Kee, Dickson Concepts chairman Dickson Poon, and either Temasek or GIC, both of which are investment companies set up by the Singapore government.

China Moly is selling 22.7% of its issued share capital in the form of 1.08 billion new H-shares. There will also be a greenshoe of between 10% and 15%, with the final size to be determined before the launch of the formal institutional roadshow on April 9. The price range will also be set at that same time.

As with all H-share IPOs, the company will also need to transfer shares equivalent of 10% of the new share issue to the National Social Security Fund. This transaction will be done outside the actual share offer but the shares will count towards the free-float, bringing it up to the required 25%. The deal will have the usual 90-10 split between institutional and retail investors with a standard clawback mechanism.

The eventual IPO price is expected to value the company somewhere in between fellow specialty metals producer HNF, which currently trades at about 15.5 times projected 2007 earnings, and base metals producers like Jiangxi Copper and Aluminum Corporation of China (Chalco), which tend to trade at an average forward P/E multiple of about eight times.

Base metals aren\'t in the same short supply as specialty metals, however, and the irreplaceable nature of both molybdenum and tungsten in steel production suggest they should trade at a premium to the former group, one observer notes.

HNF has a larger total tungsten reserves than China Moly at 525,000 tonnes, but when taking account of the fact that it only owns 79% of its main mine, China Moly\'s attributable reserve is actually 16% greater than HNF\'s 436,000 tonnes. China Moly\'s estimated profit is also about two times that of its listed rival. Balancing out that somewhat, HNF\'s tungsten business is more developed than China Moly\'s which was started only in the past year. HNF also has exposure to lead and zinc, making it slightly more diversified.

China Moly could potentially also be compared to Toronto-listed which is the only pure molybdenum producer that is publicly listed and currently fetches a 2007 P/E multiple of about 8.3 times. Here too, analysts argued that China Moly deserves a premium, because of its four times larger reserves (which are also of higher grade), its longer mine life at 46 years versus less than 10 years, and its lower cash costs.

Using a valuation based on enterprise value to molybdenum reserves, a syndicate research report estimates Blue Pearl\'s valuation at $4.56 per pound, compared with a proposed range of only $2.48 to $3.16/lb for China Moly (due to its larger reserves), which could result in some investors viewing the latter as a value play in comparison with its Canadian peer.

At the end of last year, China Moly\'s Sandaozhuang mine processed 9.9 million tonnes of ore per annum at its six processing plants, which was double its 2004 output. While this is expected to remain constant over the next two years, the company is forecast to raise its extraction of molybdenum concentrate to about 28,000 tonnes this year and 33,000 tonnes in 2008 from 21,410 tonnes in 2006, representing a three-year CAGR of 49%.

Starting from this year, the company will sell none of its molybdenum ore but will use it internally to produce other products down the value chain, such as molybdenum oxide and ferromolybdenum.

Last year, the company derived about 40% of its revenues from ferromolybdenum, which is its most refined product and about 25% each from molybdenum oxide and molybdenum concentrate (the rest came from its tungsten business, the selling of ore and "other" things).

Two years down the line, ferromolybdenum\'s contribution is expected to have increased to 55%, while molybdenum oxide will fall to 9% and molybdenum concentrate to 19%. The sale of tungsten concentrate should pick up to 4%-5% of the total from less than 1% now when it sends all the leftovers from its molybdenum processing to a 40% owned-associate that extracts the tungsten, the analysts project.

"We believe China Moly is evolving from an upstream material producer into a fully integrated molybdenum product producer," one report notes, and adds: "increasing downstream processing helps to create a more stable profit profile."

Like other mining and metals companies, China Moly\'s profits are highly dependant on the price of the metal it sells and as seen in recent years this can fluctuate substantially. Molybdenum prices multiplied to an average of $33.90/lb in 2005 (after peaking at above $40/lb) from $5/lb in 2003 as the global roasting capacity was unable to match the demand from the steel industry. The forced closure of small, polluting mines in China in 2005 added further to the supply pressure.

Last year the price came down to an average of $25.11/lb, and in the first quarter this year it has hovered at $25-30/lb. The pre-deal research projects a further drop of the average price to $22.5/lb this year and $20/lb in 2008, but notes that China Moly\'s cash costs of only $3-4/lb should lead to strong profits and cash flow nevertheless.

The price development at the start of this year also suggest that the price forecast may be too conservative.

The final price on the China Moly IPO is expected to be fixed around April 18-19, while the trading debut is currently scheduled for the middle of the week of April 23.





Copyright FinanceAsia.com Ltd., a subsidiary of Haymarket Media Ltd



 

ein Bericht von Firsteven.

Mad About Molybdenum (Reuters) Apr. 1/07

By Susan Taylor

OTTAWA (Reuters) - Investors are taking a shine to a rare, silvery-white metal called molybdenum, but the durability of a market rally may hinge on looming export controls from China.

A surge in prices could benefit producers and the Toronto Stock Exchange, home to the world\'s largest publicly traded, pure-play molybdenum producer, Blue Pearl Mining (BLE.TO: Quote, Profile , Research), and a host of explorers.

Stocks related to the base metal, valued for its anti-corrosive and strengthening properties, have been soaring for weeks, underpinned by sturdy prices and buzz about a new fund that will invest in molybdenum and the companies that produce it.



Now, anticipation is building for news on a quota system from China, which could soon release a list of the molybdenum producers it will allow to export. Fewer than 30 names are expected, a Chinese industry group said, and exports could fall by 10 percent.

"It comes down to the Chinese," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "They could make or break the market."

About 400 million pounds of molybdenum were produced last year, with tight supplies making the market sensitive to supply disruptions and contributing to price pressures.

China is a major supplier of the metal, used primarily as a hardening agent in the production of stainless steel. It contributed about 17 percent of the world supply in 2006 and topped the world in reserves, UBS said in a report.

Other key suppliers are the United States and South America, where molybdenum is a byproduct of copper mining.

The tough-to-pronounce metal moved into the mainstream amid a meteoric rise for shares in Toronto-based Blue Pearl.

Producers of the extremely hard metal make up only a small portion of the TSX materials sector, which is down about 1.4 percent over the past month. In contrast, Toronto-based Blue Pearl has climbed 37 percent.

Other producers and developers of what is being called a new mining "mega-star" have seen similar gains.



Moly Mines Ltd. (MOL.TO: Quote, Profile , Research), which has an Australian project that could contribute 20 million pounds annually in 2008-2009, has seen its stock surge more than 125 percent over the month.

Strapping stock jumps have also touched miners close to production. Roca Mines (ROK.V: Quote, Profile , Research) shares popped 100 percent this month and Adanac Molybdenum Corp. (AUA.V: Quote, Profile , Research) is up 74 percent.

Interest in molybdenum is also being piqued by resource guru Eric Sprott\'s planned Sprott Molybdenum Participation Corp. The fund, preparing for an IPO, will invest in miners and up to 50 percent of its capital directly in molybdenum.

Two weeks ago, tight supplies and uncertainty over China lifted molybdenum prices to 16-month highs of $79 a kilogram. Since then, it has slipped to about $75 per kilogram, 25 percent above the start of the year.

Investor interest has sparked an exploration revival among juniors and has senior miners revisiting old plans.

"You\'re seeing lots of companies coming out of the woodwork with historical molybdenum deposits that they\'re starting to promote," said Wellington West mining analyst Greg Huffman.

Still, he doesn\'t expect much new production over the next two years, though new deposits could be developed by 2010, or 2011, depending on prices.

Ten companies produce about 66 percent of global output, UBS said. Leaders Codelco of Chile and U.S.-based Phelps Dodge, recently acquired by Freeport-McMoRan, account for 33 percent. Other notable producers include Blue Pearl, Rio Tinto (RIO.AX: Quote, Profile , Research), Grupo Mexico (GMEXCOB.MX: Quote, Profile , Research), Jinduichenge and Antofagasta



(ANTO.L: Quote, Profile , Research).

Trading firm Shangxiang Minmetals predicted in late 2006 that the world molybdenum market will move from deficit to balance in 2007 with supply estimated at 445 million to 450 million pounds and demand at 445 million pounds.

Some analysts see it differently. "Commodities are here to stay for a while. (I see) sustainability for quite some time," said Nakamoto.



 

ich sehe gerade deine Postings. Da wollte uns doch jemand in den April schicken, hatte mich gestern schon gewundert, dass keine Pleitemeldung oder bereits durchgezogene Übernahme bekannt gegeben wurde.
Wie ich sehe, hattest du wieder Nachtschicht. Hatt Junior wieder gezahnt?
Kann mir vorstellen wie anstrengend das für dich ist. Sehe auch im Geiste vor mir, wie der Kleine morgens vor seinem müden Papa steht, den er die ganze Nacht auf Trapp gehalten hat

 

und hallo Geldsauger........ wir hatten ja schon per BM das -Vergnügen-
*der Captain klärt euch nicht auf* ist ein sehr schöner Artikel von dir,
und damit alle hier damit etwas anfangen können, schaut auf das Datum :-)))))))))

BPM-Fakten-Thread (Bitte Nur zum Lesen!)
http://www.ariva.de/board/281353

- das Sperren dieses Users löst schwere Depressionen bei der Blue Pearl Mannschaft aus -  

Euch allen! Ich hoffe, Ihr habt das sonnige Wochenende alle gut überstanden?
Ja diese Woche ist ja einen Tag kürzer, das kommende WE zwei Tage länger. ;-) Mal sehen, was unsere Perle mit den zwei fehlenden Arbeitstagen macht. ;-)
Ich wünsche uns jedenfalls hier gaaaanz viiieeeel grüüüüüne laaaaaange Balken im Chart, auch wenn hier von einer möglichen kleinen Korrektur gesprochen wurde.

LG, Harley


 

ich rechne heute leider mit fallenden kursen, asien ist komplett im minus. und da leider besonders die minenwerte.

sollte heute also leider rot werden. ich würde mich selbstverständlich freuen sollte ich mich täuschen.  

Mann Geldsauger...
Und das vor'm 1. Kaffee! ;-O War echt 'n Schreck! Ganz schön pöse!
Werde nachher nochmal alle Beiträge vom 1. überprüfen müssen.;-(

Werd wohl besser wieder den Grill hochfahren. ;-)

Bis gleich,  Strato  

kurs hält. (noch)

gruß  

....Das Feuerchen war richtig froh ;-).......der gute Brandbeschleuniger!
Es kann garnicht genug kriegen.
Ich glaub, es is' schon ein bischen süchtig. ;-)
Hab noch Vorrat!  hehe

Strato  

ich erkenne so langsam pyromanische Anzeichen bei dir. Nit dass das Feuerken außer Kontrolle gerät, für den Fall

 

hier herrscht ja die pure euphorie, kommt mal wieder nen bißchen runter. ;)

 

schwarzseher *gg*
da sind die ausis und japaner mal 1% im minus und der caddy redet von ASIEN KOMPLETT IM MINUS *gg* ..... du oller basher,willst ja nur noch billig an perlen kommen ;-)

@pichon....leider muß ich mir mein geld noch erarbeiten,bedeutet ME muß hin und wieder mal früh ausn haus ;-)
allerdings frühstücke ich gerne in ruhe bei lecker kaffee und brötchen und surfe in ruhe durchs world wide web.....bevor frau und kidis die ruhe torpedieren *gggg*
und der mit den zahnenden kidis war glaube ich harley *starknachdenke* ;-)
sollte ich mal mein geld nur mit aktien machen pichi schatz.....dann lade ich dich zum shoping ein ;-)

mfg
me

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der war das nicht. ;-) Ich bin zwar leiert, aber Kidis hab ich noch nicht. ;-)
Caddys Kinder sind glaube ich die Schuldigen. *gg*
Boa, irgendwie seh ich noch nicht wieder richtig, komm grad aus der Sonne, bin noch total geblendet. *gg*
Hab fast überhaupt keine Lust mehr, im Büro zu sitzen bei dem Wetter. Aber wat mutt datt mutt. Die restliche Zeit bekommen wir auch noch rum.
So, dann haltet mir mal unsere Perle auf Kurs, laßt sie nicht zu weit zurückkommen. ;-)
Bis später mal.

LG, Harley


 

2 nette berichte über rohstoffe,also nix mit abkühlung ;-)

mfg
me

Wirtschaftsnews -  von heute 09:45
China: Doch mehr als 11 Prozent Wachstum?


04.02.07 (emfis.com) Das chinesische State Information Council, ein regierungsnaher Think-Tank, rechnet jetzt für das erste Quartal 2007 mit einem Wirtschaftswachstum von rund 11 Prozent. Dies meldete heute das „China Securities Journal“. Bisher war dort lediglich von 10,2 Prozent Wachstum ausgegangen worden. Ein solcher Zuwachs würde der höchsten Wachstumsrate seit dem zweiten Quartal 2006 entsprechen, als 11,5 Prozent erreicht worden sind.

Das SIC habe in seine aufgebesserte Prognose neue Wirtschaftsdaten aus den Monaten Januar und Februar einfließen lassen. Demnach habe sich der private Verbrauch weiter stark verbessert, während das Exportwachstum robust geblieben sei. Dagegen habe sich das Wachstum bei den Investitionen auf ein vernünftiges Maß verringert, während sich deren Struktur gleichermaßen verbessert habe. Hervorzuheben sei, dass die Verbraucherpreise trotz der deutlich gestiegenen Geldmenge auf einem „normalen“ Niveau geblieben seien. Das üppige Wachstums habe also nicht gleichzeitig hohe Inflationsraten produziert.


Quelle: EMFIS.COM, Autor: (gh)

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Meldung

Xstrata sieht sehr starke Rohstoffnachfrage aus China

02.04.07 11:52

Laut dem CEO des weltweit fünftgrößten Minenbetreibers Xstrata Plc., Charlie Sartain, ist die Nachfrage nach Rohstoffen aus China geradezu phänomenal. Er geht daher davon aus, dass die Preise in den kommenden Jahren nach oben gehen. Die Nachfrage nach Kupfer aus dem asiatischen Land dürfte im laufenden Jahr gegenüber 2006 um 8-10 Prozent zulegen. Zudem befinde sich das chinesische Industriewachstum auf einem spektakulären Weg. „Wir sehen in allen Rohstoffsegmenten überragendes Wachstum. Zudem steige die Nachfrage aus Europa und im besonderen Deutschland, sowie aus dem mittleren Osten nach Kupfer zur Verwendung in Rohren und Drähten. Die Anstiege im Bereich der Nachfrage und der Rohstoffpreise würden jedoch mit Kostensteigerungen bei den Minenbetreibern einhergehen. Damit werde für die Branche ein Problem geschaffen. Xstrata verfüge jedoch über ein effektives Kostenmanagement“, führte Sartain in einem Interview weiter aus.

Quelle: BoerseGo



 

ich bin der pöse perlensammler. *huahuahua*

und dat mit dem zahnen ist bei meinen schon nen paar tage her. meine mädelse sind 9 und 6.

aber ich sehe schon ziemlich schwarz für euch. *hehe*

dat kiddie vom CAPTAIN zahnt. *hehe* dat gibt deck schrubben bis zur hauptversammlung.
*huahuahua*
 

traurig, traurig, traurig.........

was für eine Crew...............

alle Mann das Deck schrubben......... sonst

 

 BPM-Fakten-Thread (Bitte Nur zum Lesen!) http://www.ariva.de/board/281353  - das Sperren dieses Users löst schwere Depressionen bei der Blue Pearl Mannschaft aus -

 

ist einfach zur richtigen Zeit am richtigen Ort. Wenn ich mir ansehe wie kleinere Moly-Firmen zur Zeit in die Höhe schnellen obwohl sie erst in Jahren produzieren können, kriege ich bereits blaue Dollarzeichen in den Augen  

da bin ich aber richtig ins Fettnäpfchen getreten. *ichmichschämen*
Stimmt ja, der Captain hatte das doch erzählt. Warum ist mir das entfallen? ;-)
Ok Captain, bin schon dabei beim Deckschruppen. Meister Propper hilft mir dabei.
;-)Ich sag Dir, da kannste Dich hinterher drin spiegeln!

Ach ja, das ist übrigens der Meister Propper mit dem "Blue Pearl Effekt" *gggggg*


LG, Harley


 

hier noch schnell meine depot nummer. dort könnt ihr mir alle eure perlchen parken. *hehe*

aber so ganz ist mir nicht zum lachen. *buhu*

vorbörse can.

       8.7          §12.25 · 12.25 16.3  

depot 4711 bei der MEIN SCHATZ BANK. filialleiter GOLLOM  

Wenn keiner von den "Etablierten" dazu was schreibt, dann mach ich das. Wir haben die 8 Euro überschritten.

:-)  

wieso biste net beim deckschrubben hääää..... ich glaub das net,alle machen hier sauber und nen frischi ist hier am posten während wir alten ackern ;-)
mal spaß beiseite,immo ist kaum einer da....alle sitzen draussen beim becher eis und lassen es sich gut gehen,dafür haben wir ja auch auf autopiloten gestellt,was soll bei unserer perle schon anbrennen.....außer das wir mal die 8 verpasen,bald die 9 dann die 10 ach wat solls,ist sind doch nur zahlen ;-)
nun ja....me ist nun auch W_E_C_H ..... hab nen fußballspiel heute *gg*
bis später ;-)

mfg
me


 

wir sind wohl alle zu kaputt. Der Captain hat uns heute geschafft. Wenn sie hält,die 8, vielleicht läßt er ja mit sich reden und es gibt ne extra große Ration Rum. Soooo sauber war der Kahn nämlich noch nie.  

hagerup,  ich hab die crew dabei beobachtet wie sie den wischmop immer schön inner 8 geschwungen haben.  und klaus, schöne ausrede. ich wußte ja noch gar nicht das wir schon nen eigenen fußballclub haben.  aber ich hab da ne super idee, kannst dir ja nen paar bürsten unter die füße schnallen und dann damit über das deck rennen. und denk drann, immer schön ne 8 laufen. *zwinker*  

ich bin dann der Schieri, ich wolllte euch nämlich immer schon mal was pfeifen