Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Champion Iron Mines Limited CPMNF



GREY:CPMNF - Post by User

Bullboard Posts
Comment by edflanderson Sep 29, 2011 12:48pm
181 Views
Post# 19099367

RE: BNN

RE: BNNHi green,
It's hard to draw comparisons between Campo Alegre de Lourdes (CA) and CHM's Fire Lake North (FLN), because CA is so far behind FLN.  Even though Largo is targetting 1.5 billion tonnes, they haven't even started drilling it yet, so who knows how it will end up.  FLN on the other hand has already been the subject of a PEA, and is scheduled to start production in 2015.
.
But, if you're trying to get an idea about what a 1.5 billion tonne iron ore deposit might be worth, and surprised by Champion's low market cap... well, so am I.  The FLN PEA gives the project a NPV of in the neighborhood of $3 billion at current prices, and CHM is trading at 80 million?  It's just one of those things that I'm sure you're used to, as a holder of LGO.
.
Actually, I would be more inclined to compare FLN to LGO's Norther Dancer, in terms of timelines and economics.  Both are at the PEA state, with similar NPVs and IRRs.
.
CHM has many other iron ore properties in the drilling stage, with some historical resource estimates, but FLN is their main project. They also have a JV near Schefferville that looks promising for near-term DSO, although I haven't heard too much about it lately. They have a good website with maps, etc. There are no huge, obvious negatives like massive debt or incompetent management, nor is there any obvious explanation for the relatively massive decline in the share price.
.
Another company to compare is Alderon (ADV), who, like Largo, is a Forbes & Manhattan/Stan Bharti company.  They have a similar size deposit (somewhat smaller) in the same district as Champion, with similar economics, but their market cap is 210 million. As far as I can tell, they get a premium because F&M was responsible for Consolidated Thompson, but CHM has recently hired some of CLM's old management so I don't know if that's all there is to it.
.
I own both LGO and CHM, and view them both as very under-valued at current prices.
Bullboard Posts