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  1. #1

    Post CSM - Consolidated Minerals

    Bought into these at $1.59 last year, current'y at $3.02, however seems to be on a downward trend lately from a high of $3.46 only a few weeks ago.

    What are peoples opinions on this stock? done its dash or just a correction?

  2. #2

    Default Re: Consolidated Minerals CSM

    CSM are a major holder of ATX who have good nickle ground around coolgardie and are getting very close to production

    regards croc

  3. #3
    Yippyio's Avatar
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    Northern Beaches NSW

    Default Re: Consolidated Minerals CSM

    FYI - Mining News Article

    Boom times for the 'next BHP'

    Monday, October 03, 2005
    WITH record profits and dividends galore, this market darling has no plans to slow down. By Michael Quinn - RESOURCESTOCKS*

    It has been one of the real standout miners over the past couple of years, achieving multiple capital growth and paying nearly $70 million to shareholders in dividends. The question is, where to from here for Consolidated Minerals?

    Fiscal 2005 was an absolute boomer for ConsMin. Net profit went from a little over $25 million in 2004 to more than $70 million, including a trading profit of some $51 million out of earnings of $110 million (EBITDA).

    While most of the increase was attributed to the strong commodity prices, volume increases also played a role as production increased at the company's mainstay Woodie Woodie and Coobina operations in Western Australia.

    This year the miner is pumping for gross earnings of $140 million, with the forecast predicated on increased production of manganese and chromite (and a 15% decrease in prices), and a growing contribution from nickel.

    ConsMin managing director Michael Kiernan is unfazed by queries over the manganese price, which, especially in the shorter term, would clearly play the lead role in acting out ConsMin's forecasts.

    While the price has been down on the highs of the last couple of years, he points to its historical alignment with iron ore prices – which, incidentally were upgraded by one prominent brokerage/investment bank last month (September) despite the staggering gains made at the last round of price negotiations – plus the "quality" of Woodie Woodie's high-grade product and ConsMin's independent supplier status.

    "What happens to iron ore will happen to manganese," Kiernan says.

    Meanwhile, ConsMin's reliance on its manganese earnings will lessen as its nickel strategy kicks in over the next couple of years. Manganese's contribution to earnings is expected to slip from around 70% to 40%, at which point nickel will be delivering a similar percentage. More on that later.

    Cutting to the chase, over the next three-to-five years, ConsMin managing director Michael Kiernan is targeting a capitalisation that's at least twice that of current levels. On top of the capital growth, investors can also look forward to at least 50% of the company's profits being returned to them in the form of dividends.

    The dividends provide a beguiling mix indeed, and a major point of difference from most of the rest in the notoriously capital thirsty resources sector.

    A strong endorsement of the veracity of ConsMin's ambitions is to be found at Macquarie Bank, which recently published comprehensive research report on ConsMin startlingly titled - "Building the next BHP?"

    Macquarie's claims for ConsMin note the miner's aggressive organic growth phase of recent years, two ambitious company-changing deals – a failed merger attempt with second tier iron ore producer Portman and more recently a near-miss with the world-class Hope Downs iron ore project – and a host of investments in a range of small explorers.

    Macquarie's "price target" was $4.15 (in late-July), with company's valuation on an "as is" basis that excluded the near mine exploration potential and growth strategy, both of which it said have the ability to add "considerable value" in the short term.

    The investment bank claimed ConsMin had the necessary building blocks in place "to develop into a major diversified mining house", and was primed for further corporate action.

    "As part of building a portfolio of diversified mining assets, ConsMin is likely to undertake a considerable amount of corporate activity, at either the company or the asset level," Macquarie said.

    "While this adds a layer of acquisition risk, ConsMin has managed to ameliorate some of this risk through the use of ConsMin scrip as consideration.

    "Also ConsMin's 'shot gun followed by rifle shot' approach has proved successful."

    This colourful description refers to ConsMin's strategy of initially making multiple investments in promising exploration companies, before…

  4. #4
    Yippyio's Avatar
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    Northern Beaches NSW

    Default Re: Consolidated Minerals CSM

    Article Cont. - Part 2

    Boom times for the 'next BHP' - Part 2

    Monday, October 03, 2005
    This colourful description refers to ConsMin's strategy of initially making multiple investments in promising exploration companies, before taking that investment further in individual companies or projects if subsequently warranted.

    The effectiveness of this approach was recently played out in the case of Titan Resources, with ConsMin deciding to step away from its initial investment in Titan before subsequently taking a joint venture option over one of the junior's more advanced nickel assets – Armstrong.

    Other investments include just under 20% of nickel-copper explorer Mithril Resources, and a similar stake in budding copper-zinc miner Jabiru Metals, which is in the process of becoming a 8000-10,000 tonnes per annum copper and 20,000-25,000tpa zinc producer (as well as around 800,000oz of silver). Kiernan anticipates a doubling of these production rates, and ConsMin is widely considered likely to end up with up with either the bulk of the project or Jabiru itself.

    However it really is nickel that is at the core of ConsMin's efforts to stay on the high side of the growth road.

    Production from the company's assets in the Kambalda region is being targeted to grow around five-fold over the next five or so years - from around 4000-5000tpa to some 20,000-25,000tpa.

    Output from the existing Beta Hunt operation plus the developing East Alpha mine will push ConsMin's output to an annual rate of around 10,000t in the current fiscal year.

    Kiernan says the aim is to develop a mine a year for the next few years, with Foster likely next year and exploration worth around $10 million per annum being undertaken to ensure it remains a reality thereafter.

    Current resources stand at some 74,000t of contained metal, with immediate potential seen to increase in a 400m area between East Alpha and the historic Silver Lake mine to the north, WMC's original mine at Kambalda.

    Meantime, the company is also planning to build its own concentrator in the Kambalda region, and, significantly, it is likely to introduce a Chinese partner into the development despite the mooted $15 million or so plant cost being but a minor percentage of ConsMin's current cash holdings.

    "Hands over the sea" is how Kiernan describes this "strategic partner" initiative, which would seem more than likely to attract serious attention from resource hungry groups in China.

    Further down the track, the company's iron ore assets (Mindy Mindy, Shaw River) in the Pilbara will emerge, with the lack of available infrastructure the current constraint. ConsMin's relationship with the ambitious Fortescue Metals Group is the key to unlocking the value in these assets.

    For those bullish on China, and hence the commodities being produced by ConsMin, the following comments by analysts Huntleys succinctly capture the essence of the company.

    "In a few short years, CSM has developed a reputation for aiming high and delivering the goods," Huntleys said.

    "Return on equity has averaged a stunning 40% per annum for the past five years … (while) dividends have compounded at an impressive 63% per annum over the last four years, with more to come.

    "CSM has a modest forward PE and attractive fully franked yield (at a share price of $4.02).

    "The company has shown it can successfully grow through exploration, expansion and acquisition. China provides CSM an opportunity to grow into the vacant mid tier mining space.

    "The company is moving rapidly and efficiently to take advantage of the cyclical upturn with an impressive armoury of growth options."

    * This report, first published in the September/October 2005 edition of RESOURCESTOCKS magazine, was commissioned by Consolidated Minerals

  5. #5

    Default Re: Consolidated Minerals CSM

    Can this company still pull things off without Keirnan or are they going to be just as strong? sp seems to say otherwise lately.

  6. #6
    E/W Learner Kauri's Avatar
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    Sep 2005

    Default Re: Consolidated Minerals CSM

    I tend to think that CSM has been way oversold on the news of Kiernans departure, I admire the way he built the company up from nothing, but to say he was worth 30% of the companies market cap is, I think, overdone. Will be waiting patiently for a chart based signal to enter when insto's have settled down.

    West Australian today
    ConsMin eyes buy-back


    Consolidated Minerals is likely to start buying back its own shares on the market after a 10 per cent slump yesterday to a six-month low overshadowed plans for a major $120 million expansion of its Kambalda nickel operations.

    Managing director Michael Kiernan said the share rout, triggered by an investment fund dumping stock, was a "serious overreaction" and one that could trigger buying under the company's 5 per cent share buy-back program. ConsMin last bought shares under the facility in March when the share price was around $3.20, just 5’ below yesterday's close.

    Market traders said yesterday's 35’ share price hammering, the heavy volume of 5.4 million shares and the aggressive nature of the sell-down suggested an insititutional investor had quit its position.

    Southern Cross Equities was behind the selling, feeding 3.4 million shares into the market and was still offering more than 160,000 shares at $3.25 at the close.

    "They didn't want to scare the market so they drifted in and sold all day, but when they exhausted the buying they have driven the price down to get some volume happening," one stockbroker said.

    Nearly $160 million, or 18 per cent, has now been wiped from ConsMin's market value since WestBusiness revealed two weeks ago that Mr Kiernan was planning to leave after institutional shareholders raised concerns about a new lucrative employment contract for the chief executive.

    Yesterday marked the first exit of one of the company's institutional shareholders since the pay row, with the bulk of the earlier selling coming from retail shareholders concerned about what impact Mr Kiernan's exit would have on the company.

    The manganese and chromite miner revealed yesterday it had its sights set on becoming a major nickel player in Kambalda by building a $25 million stand-alone concentrator capable of producing up to 25,000 tonnes of nickel concentrate a year, in competition with BHP Billiton's WMC processing operations.

    ConsMin's concentrator would be fed from a planned $95 million underground expansion of its existing operations, picked up in last year's $76 million takeover of Reliance Mining, and would also be open for business as an alternative treatment option for other miners in the area.

    Mr Kiernan said the nickel expansion would help unlock the broader nickel potential of the area.

    "Based on the geological assessment of our team as well as historical data and mining information, we believe that there is a potential nickel endowment of up to 240,000 tonnes with an in-ground value at current nickel prices in excess of $2.5 billion if the mineralisation is shown to be continuous," he said.

    He said the first phase of the programe involved the $45 million development of twin exploration declines to access a potental 90,000t of nickel about one to 2km to the south-east of the current Beta Hunt-East Alpha mine.

    If that program was successful, ConsMin would commit a further $50 million, funded out of cash flow, to further extend the twin exploration declines 3km to the south, targeting an estimated potential nickel endowment of up to 150,000 tonnes.

    Feasibility studies on the plan are being finalised and the board is expected to make a final decision at its November meeting.

    "But it is one of those things I would say is a must-do, not a like-to-do," Mr Kiernan said.

    He said the company would make a decision before December on pushing ahead with plans to establish its own concentrator in Kambalda. He said the company was looking at the possibility of converting the old Burbanks gold mill from Coolgardie into a nickel processor, which would help cut the development time from two years to 12-18 months.

    "To get our own concentrator gives us greater revenue per tonne, reduces our conversion costs and also gives us the ability to blend other ores, particularly (Titan's) Armstrong ore, and also acquire nickel from other players," he said.

    "We then sell our concentrate direct to China."
    Attached Images
    The above post is personal opinion only, for investment advice consult a licensed professional who fully understands the value of trailing commissions.

  7. #7

    Default Re: Consolidated Minerals CSM

    Howdi Jay. From a technical perspective, it would seem that this weeks action has been very negative for CSM. In fact todays fall has seen a crucial support level at around $3.20 fail. This weeks fall has been accompanied by huge volume which has further negative reprocussions. OBV has dropped off, while there has also been negative divergence in the RSI. I personally would not be holding this stock in my portfolio after this weeks action. Another option is to go short as a CFD and leverage the downside. If I am wrong, CSM would need a strong surge back through $3.20. Definenetly a possibility. However the smart money seems to be getting out of CSM currently. Just my opinion. Cheers mate.

  8. #8

    Default Re: Consolidated Minerals CSM

    CSM support level is $3.00...short-term resistence should be $3.25.

    It should rebound from here, but await some directions from LME i would say and hopefully through mid November will recover to be above $3.50.

    There are also rumours of a share buyback in the immediate future which should hold prices above $3.25.

    Just have to wait and see...

    note this isnt advice just my thoughts.

  9. #9

    Default Re: Consolidated Minerals CSM

    I think this is one of those stocks that i will be saying to myself later that i could have bought in at 3.00 if you know what i mean. Still remember when mining news article branded thisone as the next BHP big call but if they are right imagine what 3.00 wiil look like then lol i got out and not back in yet will live to regreti it im sure

  10. #10
    E/W Learner Kauri's Avatar
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    Sep 2005

    Default Re: Consolidated Minerals CSM

    Kiernan moves to steady ship


    Outgoing Consolidated Minerals boss Michael Kiernan has offered to stay at the manganese, chromite and nickel miner until mid-2007 after an outcry by small shareholders over his decision to quit next year in the wake of a pay row with some institutional investors.
    The above post is personal opinion only, for investment advice consult a licensed professional who fully understands the value of trailing commissions.

  11. #11
    E/W Learner Kauri's Avatar
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    Sep 2005

    Default Re: Consolidated Minerals CSM

    Well CSM may be forming a reversal triangle, too early to say if it is an ascending or equalateral, or indeed a triangle at all, also would have more confidence if it was bouncing off atrend line or support/resistance but still warrants watching for mine.
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    The above post is personal opinion only, for investment advice consult a licensed professional who fully understands the value of trailing commissions.

  12. #12

    Default Re: CSM - Consolidated Minerals

    Just a quick note on CSM. I posted late last year in October that CSM had breached support which indictated a very negative signal for this stock. Well since then CSM has been punished. It closed that week at $3.12 and is currently trading at $2.26. It has broken through 50% fibonacci retracement support and its next support is around fibonacci $1.80. OBV has fallen through the floor. Dont want to be too negative , but it can be painful ignoring strong technical signals, especially when they are on the downside. (Unless you are short selling )

  13. #13
    Ann's Avatar
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    Dec 2005
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    Default Re: CSM - Consolidated Minerals

    Hi Lachlan6,

    It does seem to have a battle on its hands doesn't it?

    Let's see if the reaction to the recent Open Briefing will breath new life into the price.

    6/03/2006 Cons Minerals. MD on Results & Growth

    Attached Images

  14. #14

    Default Re: CSM - Consolidated Minerals

    doesnt look good

    I'm just pleased I sold @ 2.60 last week, after weeks of waiting for it to get back up to $3.00

    still a 80% profit so not unimpressed, just a far cry from the 160% it was returning 12 months ago

  15. #15

    Default Re: CSM - Consolidated Minerals

    to those who follow this stock,
    your thoughts would be appreciated.
    Should I continue to hold or is it headed back down again?

  16. #16

    Default Re: CSM - Consolidated Minerals

    I am a long term holder. It has been a bumpy ride the past year, am hanging on it has good exposure to the resources boom and especially China, I think it is a stock worth holding long term IF you believe the resources boom can continue medium term. Here is a good article for you to read which gives an overview of where we are now at:

    from Australian Financial Review

    ConsMin fights to restore credibility
    Author: Jo Clarke
    Date: 23/03/2006
    Words: 885
    Source: AFR
    Publication: The Financial Review
    Section: Market Wrap
    Page: 25

    It has been a tough six months for Consolidated Minerals, with a collapse in the manganese price and disruption in the top management interrupting the company's ambitions to fill the gap left by the recent disappearance of WMC Resources and MIM.
    The next 12 months is crucial as the company moves to further reduce its reliance on manganese and chromite, while new managing director Rodney Baxter stamps his authority on what has long been predecessor Michael Kiernan's baby, with plans to invest overseas.

    Mr Baxter will assume the top job on July 1 and plans to be his own man despite the enigmatic Mr Kiernan remaining on the board as a non-executive director.

    Mr Kiernan announced his resignation in October after a handful of fund managers refused to endorse his remuneration package.

    "The new MD is a bit more old-school in terms of mining, a bit more conservative and reserved, but that is not to say that he won't put his own stamp on the direction of the company," BT portfolio manager Tim Barker said.

    The changeover is likely to lead to volatility in the ConsMin share price in the next few months while the market gets used to Mr Baxter, another analyst said.

    "People don't like change, they want evidence that he will be able to deliver, particularly as the company has been through some tough times lately," he said.

    Mr Baxter, with his background at Anglo American in South Africa, has already flagged a desire to turn ConsMin into an international company. Africa is high on Mr Baxter's list of potential investments, but that may not be appreciated by ConsMin's Australian shareholder base.

    "The Australian market will try to ignore it," Mr Barker said.

    "African assets have always been discounted by the Australian market, but that is not to say that others - most noticeably the Canadians - will not value it."

    ConsMin, under Mr Kiernan, has been accused of a scatter-gun approach to acquisitions and Mr Baxter will have to be careful not to perpetuate this in his overseas ambitions.

    An eastern states roadshow by Mr Kiernan and Mr Baxter earlier this month has boosted the share price by about 25? to $2.50, but it is still well below the high of $4.38 achieved in August before Mr Kiernan resigned and the extent of the manganese cool-down became apparent.

    Mr Kiernan recently reiterated the company's philosophy of returning at least 50 per cent of profits to shareholders, while continuing to seek acquisitions.

    Analysts expect ConsMin to pay a total dividend this financial year of about 10? a share, giving a yield of around 4 per cent, broadly in line with that estimated for nickel producer Minara Resources, but well above the prospective 1.76 per cent for diversified miner Straits Resources.

    ConsMin is trading at 20 times estimated 2006 earnings, well above the price-earnings multiples of 7.5 times for Minara and 8.6 times for Straits Resources.

    The high multiple is in part due to depressed forecast earnings of about $25 million because of an expected fall in manganese prices and volumes, particularly in the first half of the financial year.

    The company was built on manganese, but the manganese market - dominated by BHP Billiton and Brazil's Companhia Vale do Rio Doce - has suffered falling prices in the past 12 months because of oversupply and destocking by Chinese alloy producers.

    The price has fallen sharply from a high of $US4 a tonne in early 2005, but seems to have levelled out at about $US2.50 as Chinese buyers return to the market.

    ConsMin remained bullish on manganese prices throughout 2005, despite the falls, and lost a certain amount of credibility in the market.

    From manganese it was a logical step to buy the Coobina chromite mine - both commodities are used in steel making and have significant marketing synergies.

    Mr Kiernan has said publicly he will not invest in any more chromite mines once Coobina runs out of ore, because the barrier for competitors to enter chromite mining is too low.

    After chromite, Mr Kiernan turned his attention to nickel, with the acquisition of Reliance Mining last year.

    ConsMin is also in a joint venture with Titan Resources to develop the Armstrong nickel deposit.

    The Armstrong ore was rejected by BHP because its specifications did not meet the Kambalda concentrator's needs and ConsMin is threatening to build its own concentrator to process it.

    There has been speculation that ConsMin will move to take over Titan, although this may not be on the agenda of the new boss.

    Buying into Jabiru Metals was ConsMin's first move into base metals.

    Mr Kiernan is keen to gain control of Jabiru's Jaguar copper-zinc project, but so far Jabiru MD Gary Comb has rejected advances regarding a joint venture.

    "The 30 per cent [holding in Jabiru] is probably enough in terms of having sufficient influence over what the company does," Mr Barker said.

    But to be able to do exactly what it wanted, ConsMin would have to take over Jabiru, and that was unlikely to happen until the Jaguar project was much closer to production.


    * Rodney Baxter takes over as managing director on July 1.

    * Baxter is considered an 'old-school', conservative miner.

    * ConsMin lost credibility over its optimism on manganese prices.

  17. #17

    Default Re: CSM - Consolidated Minerals

    very useful
    probably sit it out until end of June (and hopefully beyond....)

  18. #18
    PlanYourTrade > TradeYourPlan RichKid's Avatar
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    Default Re: CSM - Consolidated Minerals

    Looks like CSM is struggling again, could be in for a fight with the Titan takeover, still quite a way from the recent bottom but it only takes a little bit of a push with volatile stocks like this to get it going down again.

    My posts are not recommendations (even when I rave about something). Always rely on your own research & judgement.

  19. #19
    Pigs In Space GreatPig's Avatar
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    Jul 2004

    Default Re: CSM - Consolidated Minerals

    Quote Originally Posted by RichKid
    Looks like CSM is struggling again
    Sold it today after yesterday's drop through the $2.60 level.

    Was hoping for an up-side break out of the triangle.

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  20. #20
    Lord of the Ledgers Kipp's Avatar
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    Nov 2005

    Default Re: CSM - Consolidated Minerals

    GP- are you sure there isn't some long-term value here? CSM has been punished by the market, but Hartley's, Patterson's, ABN Amro and co have all given BUY valuations in recent reports (valuation s of ~$3.20) and pretty healthy FY07 profit forecasts of in th 55-65mill range.
    Equally well, Huntley's has admitted they had BUY or Hold for CSM in 05 when it went down the sink.

    CSM also positive ASX announcement today (increased nickel grades) but nothing could stop the horror run of today... all of my watchlist in the red! (Except IDO which had a cracking day.. up 16%!)

    Fin Review suggests CSM might have some competition for Titan, but even if it misses out still retains a 20% stake and some 33% of JML.
    Advice is a refugee. Everyone wants to give it, no-one wants to take it...

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