Campbell (CCH / CBLRF) releases prospectus
Campbell Resources
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CBLRF.OB (United States OTC)
CCH.TO (Toronto exchange)
- Currently producing Copper and Gold
- Campbell has been around for 40 years
- Now trading under 20 cents
- Forward PE ratio of between 1 and 3 (probably closer to 1)
- There should be good upside here - notice the huge investment by Sprott
Update:
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Campbell released the prospectus for their restructuring on Wednesday, Sept 13th. The prospectus is available in Stockwatch and Sedar (free). The prospectus is full of detail.
Here are my first comments on the prospectus, from the Yahoo Juniors board:
<I will refrain from posting links to other message boards, until I know I am welcome here, and I am not breaking the rules>
There are a small group of Traders that are trying to keep a lid on Campbell. But the ASK depth is very small. There is an excellent buying opportunity right now.
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Campbell is a current PRODUCER, producing from 2 properties in Quebec. They have “been through hell and back”. For the last year they have operated under CCAA (Canadian restructuring protection).
Their Plans of Arrangement have been approved by their creditors, the 21 day appeal period is over, and the Superior Court of Quebec has approved their restructuring. THE RISK IS NEAR ZERO NOW. The prospectus was released this week, and the Rights plan should be closed in just a few weeks.
But Campbell is still trading below book value, as documented in this StockHouse post:
I will refrain from posting links to other message boards, until I know I am welcome here, and I am not breaking the rules
Yes, there is dilution, but we know what it is. Current shareholders will also be allowed to buy these new cheaper shares through a “Rights Plan”. We expect the prospectus for the Rights Plan to be out mailed in less than 2 weeks. Closing will be soon after that.
U.S. based investors will NOT be able to participate in the rights plan. For U.S. shareholders, the Transfer Agent will sell your Rights for you, still giving you a profit at today’s share price. You could buy Campbell today, for the real upside (my target price is above $2.00), and make some immediate money on the Rights that you are entitled to.
Full dilution will bring Campbell up to 400 million shares. But that's not out of line, when you consider that various models show Campbell earning $30 - $80 million a year, by the 2nd half of 2007. If Campbell can make it up to around $80 million USD in earnings, they will have a forward PE ratio of less than 1 (at today’s share price).
Where do my numbers come from? Campbell’s “Copper Rand” mine will be at full production in about 5 months. It will produce about 14 million lbs copper and about 37,000 ounces of gold per year. Copper production costs will be about $1.25 per pound. Gold will be treated as a byproduct (all profit). That’s over $30 million in earnings right there, and Copper Rand will be only one of 5 properties they will have in production by late 2007.
For comparison, look at Bema Gold (BGO) or Breakwater (BWR.TO). Both have about 400 million shares. Bema isn’t even profitable yet, but trades 40x higher than CCH.
The most respected precious metals investment firm in Canada, Sprott Securities, home of John Embry, is buying 125 million Campbell shares in a private placement. It appears that 9 distinct Sprott funds are buying an allocation. If Campbell can attract a $10 million investment from Sprott, you can be sure that something positive is going on here.
Campbell website:
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Campbell chart:
Notice the low volume walk down – nice buying opportunity
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Long-term Campbell chart:
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StockHouse Message board for CCH:
I will refrain from posting links to other message boards, until I know I am welcome here, and I am not breaking the rules
Posts that summarize the positives for Campbell:
I will refrain from posting links to other message boards, until I know I am welcome here, and I am not breaking the rules |
