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Campbell Resources ------------------------ CBLRF.OB (United States OTC) CCH.TO (Toronto exchange) Campbell will be emerging from CCAA restructuring protection in the next 30–45 days. This seems perfectly on-track, an 80-page Prospectus has already been released (Sept 13th). The common shares will remain intact, but diluted. A rights plan is being offered, but you must be a shareholder to participate in the plan. Currently producing Copper and Gold from 2 properties: - Joe Mann - Copper Rand Campbell will be adding production from 3 more properties as follows: - Corner Bay, a massive high grade copper mine. Bulk sample starts Sept/Oct 2006. Full production mid-2007. - Cedar Bay, a formerly producing copper/gold mine. Restarting production 2nd half 2007. - Merrill Island (a small mine). Starting up Sept/Oct 2006 ---------------------------------------------- - Campbell has been around for 40 years - Now trading under 20 cents (Sept. 2006) - Forward PE ratio of between 1 and 3, probably closer to 1. This is my model. I calculate this based on expected annual earnings (the rate of earnings, by the middle of 2007), compared to the share price today, fully diluted (September 2006). - The Copper Rand mine was cash flow positive in the last two quarters of 2005. But Campbell has never included Copper Rand earnings in regular earnings, because the mine was still under development. The first two quarters of 2006 saw problems at both mines, because Campbell ran out of cash to develop new production areas. If you study the production and ore grades from Copper Rand, from the last two quarters of 2005, you will see the massive cash flow. Copper Rand results will be included in regular earnings next quarter (4th quarter of 2006), according to the recent Management Discussion and Analysis. With the inclusion of CR results, 4th quarter earnings have the potential to show a very large improvement. On Sept 13th, Campbell published their preliminary Prospectus. This document is available on Sedar (free) and on StockWatch (subscription). It’s over 80 pages. The Prospectus covers the Rights plan and the private placement from Sprott. The prospectus provides a 5 year production plan for the Copper Rand mine. All of the numbers that I discuss are supported by this detailed plan. The best news is that they use conservative metals prices in the plan. The Rights plan will be discussed in separate posts on this board. We expect the plan to close in just a few weeks (September or early October). The private placement by Sprott (home of John Embry) is a profoundly bullish development. A recent disclosure document indicates that 9 separate Sprott funds are investing in CCH shares. That shows a commitment to Campbell that reaches across the entire Sprott organization. Campbell Website: ressourcescampbell.com ------------------------------------- Weekly Chart: stockcharts.com - notice the horrible sell off when Campbell announced they were seeking CCAA protection, on June 30th, 2005. - Notice the massive BUY volume that came back into CCH, in several occasions in late 2005. The release of Corner Bay drill results provided Campbell with record breaking volume on the TSX exchange in Sept. 2005. Strong hands knew what those drill results meant. (I calculate 250 million lbs of high grade copper, if you include all 3 categories of resource). - Notice that most down moves have been on very low volume. This stock is being “played”. Strong hands are buying, while the Bashers and Trolls deflect small investors on the StockHouse CCH board. - Notice the “walk-down” this past week (Sept 13th – 15th). I watched it happen in Level 2. A small group of TD Sec Trolls walked CCH down on low volume. Late Friday, traders from TD Sec were trying to buy back those shares. ---------------------------------------------------------------------- 10 year chart: bigcharts.marketwatch.com If Campbell makes it, and I think they will, the upside here is enormous. CCH once traded on the NYSE. | ||||||||||||||
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