interesting calculation/analysis in iii:
http://www.iii.co.uk/investment/detail/ ... d=10342636
below is my raw analysis of BZM, so if any errors please let me know. and feel free to add more info.
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It seems that amongst iron ore miners, BZM is one where its not really popular amongst PIs.
Perhaps because not many really understand what assets BZM has.
After reading RNSs and website, BZM is indeed so undervalued as although its market cap now is around 120m, BZM actually has huge iron ore
deposits while at the same time, already producing in Forecariah mine with JV with the chinese/CIF.
Resource:
Market discounted hugely the resource of BZM. BZM so far has JORC resource of more than 6.5billion tonnes (not only "inferred" but also
including "measured" and "indicated" which are much better resources)(
http://www.bellzone.com/projects/kalia)
Kalia mine alone has 6.16 billion tonnes JORC resource, has NPV of USD 5.5b and IRR 57%.
for rough comparison, BAO has much less than 1 billion tonne JORC and has market cap of GBP 64m
so, BZM with 6.5billion tonne (ie 6.5 times more resource than BAO) should be at least GBP64x6.5 = GBP 416m market cap (ie BZM sp should be around 60p). Not to mention that
BZM already producing in Forecariah mine, so technically the valuation will be even higher than that.
YET, currently BZM market cap only 124m !!
AND in 2011 when market cap of BZM was 576m (sp 80p) the resources at that time was only around 3.7billion (page 3 of
http://www.bellzone.com/images/download ... r-2012.pdf)
YET, currently BZM already have 6.5billion JORC and market cap of only 124m (17p) ??
its so undervalued that even BOD had no choice but to do buyback as per their statement below:
per interim report:
The Company undertook a limited share buyback during the period to demonstrate its belief in the business since the Board does not believe
the current share price reflects the value of the Company’s assets.
http://www.bellzone.com/images/download ... e-2012.pdf
so, with the iron ore price increasing and interests of investors coming back to iron ore market (at least), the continuous newsflow (with
Forecariah Jorc due anytime now) will soon attract more investors and realised that BZM is overdue for rerating very soon.
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newsflow (on top of my head):
- mid jan Forecariah Jorc update
- Q1 2013 Kalia JORC update
- Kalia feasibility review
- potential further JV re Kalia
more newsflow can also be found here:
http://www.bellzone.com/images/download ... r-2012.pdf
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http://www.ge.tt/1Wx2z1W/v/0?c
around 70% held by top 5 shareholders