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Pastimes : Crazy Fools Chasing Stocks w/5-letter Symbols Ending in F -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (291)	10/25/2002 1:16:50 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 307

September 4, 2002 BUSINESS AND INVESTING > THE SPECULATOR SPECULATOR: IN LIKE TIN With the news that directors of Sirocco Resources were planning a harbourside lunch for Sydney journalists amid a round of show-and-tell visits to brokers beginning last week, I didn't hesitate to pick up a few shares in the expectation they'll be talking up the stock. Sirocco has been in a bit of choppy weather recently, after announcing in April it planned to buy the old Renison tin mine in Tasmania from its then operator, Murchison United. The sale, however, was contingent upon Murchison in turn buying a copper mine in Portugal from Rio Tinto, a deal that eventually floundered (at least for the present) in Portugal's bureaucratic jungle. Nevertheless, Sirocco confirmed last week that the purchase of the Renison tin mine would go ahead with a cash payment of $5m to Murchison, followed by another $1m in cash or shares in six months' time. In addition, Sirocco is freed from any of Murchison's hedging positions on production from the mine and will repay in six months $2.5m of working capital Murchison is leaving in the mine project. Sirocco shares were re-listed after several weeks' suspension and traded last week from 12¢ to 11¢. Coincidentally, that's the price they traded at in late July, before the shares went "ex" an entitlement to a spin-off of one new Sirocco Technologies Group share for every six of the listed parent's shares held. The technology spin-off should list in a month or two but it doesn't look like the market cares much about Sirocco shedding its "high-tech" adventures of the late 1990s. From this week, Sirocco will trade under its new name, Renison Consolidated Mines (ASX code: RSN). With 221.4 million fully-paids on issue plus 152.5 million contributings paid to 3¢, the company carries a market capitalisation of about $27m. In announcing that the deal would go ahead (and at a cheaper price than first proposed), Sirocco managing director Richard Seville said the mine was expected to generate more than $50m a year in revenues and operating earnings before interest, tax, depreciation and amortisation of more than $10m a year, based on management forecasts. Current mine life should be extended beyond the present six years. When the Renison deal was first proposed, some analysts suggested it could be worth more than 20¢ a share to Sirocco. As a further potential sweetener, Sirocco's other project of significance is the Toms Gully gold show in the Northern Territory, where analyst Warwick Grigor reports a recent scoping study estimated it could produce 40,000oz of gold to earn EBITDA of $7m a year. Meanwhile, Consolidated Broken Hill this week begins a $1.5m drilling program into the western zone of the historic field, where it hopes to establish a measured and indicated resource of at least 20 million tonnes in the next six months or so down to a depth of 680m. Within its central mining lease covering 3.5km of the known mineralisation, it already has defined a resource of 4.65 million tonnes of 2.8% lead, 4.1% zinc and 33 gm/tonne silver. The new work should enable the completion of a bankable feasibility study by mid-2003, with a projected mine life of at least 12.5 years. With 175 million shares on issue selling at 5¢, CBH carries a market capitalisation of just $8.75m. It has $4m cash, including a $2m drill fund loan from Toho Zinc of Japan that will off-take at least half of production. Nothing is ever easy for small companies, however. I hear from Broken Hill that the NSW railways sought a security deposit amounting to millions of dollars when CBH first proposed drilling off railway land into the depths below. They wanted security against land collapse, not withstanding the fact that more than 300km of drives honeycomb the land beneath the town and railways, from depths below 50m to 1.3km on the way to Hades. Eventually, practical men pointed out that the largest drill cores would be less than 10cm in diameter, with the shallowest hole at least 30m beneath the tracks. The red tape controllers relented but still insisted on a $250,000 bond. One of our petroleum hopefuls, Pancontinental Oil and Gas, scored a coup along Kenya's Indian Ocean coastline with a 40% contributing interest in 21,400 square kilometres covering exploration tenements in mostly shallow water. The other 60% shareholder is Afrex, an overseas company controlled by oil veteran David Kennedy, who is also chairman of Pancontinental. The companies have conditionally agreed to drill up to 12 wells during a four-year exploration program. Bought 20,000 Sirocco Resources (now Renison Cons.) @ 11¢ $2244 Material in The Bulletin is protected under the Commonwealth Copyright Act 1968. No material may be reproduced in part or in whole without written consent from the copyright holders.