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.
KEY POINTS
* 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.