CLE 0.00% 0.9¢ cyclone metals limited

forget smaller assets, marampa is the the one

  1. 3,666 Posts.
    Thanks to all those who have contributed to the detailed analysis on CFE's assets. Whatever the valuation you come up with, it is clear that based on what is KNOWN, CFE is very underpriced.

    I won't dwell on the myriad of smaller assets CFE owns, and try to get an exact valuation on them. Because, one asset, above all, potentially dwarfs all other assets (even including Q Copper) in terms of value. And, at the moment, valuing that asset remains difficult. But perhaps not for much longer.


    "Diamond drilling continued at the Gafal West prospect at Marampa with a total of 2,764 m completed during the quarter. Total advance since drilling commenced is 3,576 m. Assay results EXPECTED LATE IN THE DECEMBER 2009 QUARTER." (30/10/2009)... So these results are due any time...

    With a 99-year lease on the rail and port infrastructure, upon which Tonkolili depends, the value of Marampa is as much about this strategic asset as the iron ore itself. Sage quotes Alan Watling (who built Fortescue's infrastructure) as saying it (Tonkilili) is the best project he has ever seen" - BRR 29th Sept. 2009.

    Reportedly, AML are an an "advanced stage" of discussions to sell Tonkolili.

    And with CFE working closely with their major shareholder in AML, Sage is looking for Marampa to be "swept up" in that sale process. Any buyer for Tonkolili would want to ensue they have the infrastructure issues sorted.

    Sage is on the record as saying that CFE was looking for "about US$400m for Marampa". Paydirt magazine, p.28. And yet when CFE acquired the 65% of Marampa they didn't own, in a deal costing (at current shares prices) only $31m in scrip, the market hated it, pushing the share price of CFE down.

    Clearly, the market does not rate or understand Marampa. And a successful resolution here is the biggest single factor in CFE's value. The exact value of the myriad of small assets is of secondary importance - a sale of Marampa at Sage's asking price is greater in its own right than CFE's entire mcap.

    Marampa is the dark horse. Forget the one-percenters. A sale here will see a massive and unexpected rerating.


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