Rankings   Forums   Features   Help    

GordonGekko's picture
Go, Zinc, GO !!!

I didn't know much about the zinc before , but then I found this article.

http://www.yukonzinc.com/research_ZINC.htm


The other thing I found was : Eurozinc mining corporation (EZM).

http://www.eurozinc.com


EZM owns 2 mines.

One  is working - Neves-Corvo copper/zinc mine .

The Neves-Corvo mine is currently producing approximately 200 million pounds of contained copper annually, and in July of 2006 also began producing zinc concentrate at a rate of approximately 55 million pounds of contained metal annually.

The other one The Aljustrel mine is currently on care and maintenance, however, the mine is expected to be in production by the second half of 2007.

When Aljustrel is in full production, by the second half of 2008, it will be producing approximately 176 million pounds of contained zinc, 40 million pounds of lead and 1.2 million ounces of silver annually.

Copper price = 1.68$ per pound
Zinc price = 0.63 $ per pound
Silver price =7.32$ per ounce
Lead price = 0.44 $ per pound

Now the production of copper is 200 mil. pounds = 336 mil. dollars

at the end of this year it will be 200 mil. pounds of copper plus 55 mil. pounds of zinc ( 34.6 mil dollars).
Revenues at the end of this year will be 380 mil.dollars

In 2 years the revenues will be 380 mil. dollars plus 110.88 mil dollars (176 mil.pounds of zinc)
plus 17.6 mil. dollars (40 mill. pounds of lead) plus 8.7 mil. dollars (1.2 mil. ounces of silver).
The total revenues will be 517.18 mil. dollars.That is 54% growth! (517.8 : 336=1.54)

http://www.eurozinc.com/i/pdf/California-ppt-may-06.pdf

If you agree that the prices of commodities will grow and you like companies with almost no debt. This stock could be your choice !

PS: I would be thankful for your opinions.Some of you already own this stock:>:>:>




By GordonGekko at 2006-07-25 17:46 | Stocks | GordonGekko's blog


zinc

I think eurozinc is a good company but I would recommend hudbay (t.hbm) on a dip
it is scheduled to earn I think $4-5 this year and a lot of analyst have said that it is very undervalued. Yukon zinc has a good asset but has horrible management. Hudbay btw also produces gold and silver.
By YY at Tue, 2006-07-25 18:16 | login or register to post comments

Fair value

Thank you miumiugirl. I will have to check the management.:>


I have tried to estimate fair value per share as well.

Production of copper 90 000 t   / a year. Total reserves of copper = 2000 000 t.
It has reserves for next 20 years.


Production of zinc 105 000 t / a year.Total reserves of zinc = 2000 000t.
It has reserves for next 20 years.

Net income of the company will increase from 88 mil to 130 mil. in 2 years.
Then it will grow 3% a year .Discount rate = 8%.(the 25-year average bond rate is around 8%)

1.year 130*(1.03/1.08)^1=124
2.year 130*(1.03/1.08)^2=118
3.year 130*(1.03/1.08)^3=113
.
.
The total sum of discounted net income is 1640.224 mil.
The total number of shares outstanding is 546.28 mil.

Fair value per share is 1640.224 / 546.28 = 3$ .

If I require 40% discount then I should consider buying the stock
when the price is 2.14 $ per share (3/1.4=2.14).

Am I correct ? What do you think ?

By GordonGekko at Wed, 2006-07-26 00:40 | login or register to post comments

zinc

 I know that the last financials disapponted the market for eurozinc.  The 200 day moving average is about $2.00 right now. I read that there is zinc shortage but many analyst have been bearish on base metals (as the housing boom seems over) and I expect another crash in commodities before the fall (August or Sept). I would wait for it to dip to buy it. If you see the company insider report, u can see that one insider has sold 200,000 shares just a week ago.

By YY at Wed, 2006-07-26 11:31 | login or register to post comments

eurozinc takeover?

I was wondering why the reason for the spike on Friday. Today, I read on the financial post that there is a rumor that eurozinc is going to be taken out soon. They are looking at a roughly 20% premium.
By YY at Sun, 2006-08-20 13:27 | login or register to post comments

Eurozinc takeover

It suprises me. I thought that the reason was three-fold increase in quaterly earnings. Anyway,I think there should be no takeover until next year (opening of the second mine).

By GordonGekko at Sun, 2006-08-20 15:38 | login or register to post comments

merger

It was a merger with Lundin instead, guess the post got it wrong.
I was thinking what would teck cominco might be looking at to takeover since no more Inco for them (rng or lim maybe?)

By YY at Mon, 2006-08-21 16:07 | login or register to post comments