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Jinshan Gold Mines (JIN.v)

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MarketCap : C$165 MILLION = 137.6mn shares os x c$1.20 (($51.2 / oz.))

 

Daily Chart ... update : weekly : monthly : 15min.-10day

bigzs2.gif

 

Jinshan Gold Mines is a Canadian mining company focused on the exploration and development of gold projects in Asia. The company is developing one of the largest gold mines in China - the Chang Shan Hao (217) gold Project - and conducting exploration work on other prospective properties in China.

 

Jinshan Gold Mines has completed an independent final feasibility studyindicating that the planned mine would be capable of producing approximately 117,000 ounces of gold a year for the first 9 years at a cash cost of approximately US$253 an ounce.

 

Resource: 2.9 million oz.: 42mn x0.85 g/t & 68mn.x0.81g/t

 

Management :

Jay Chmelauskas / Director, President and CEO

William Lee / Chief Financial Officer

Calvin McKee / Chief Operating Officer and CSH 217 General Manager

X.D. Jiang / Vice President of Business Development

 

A mining license has been obtained, and commercial production is expected to start in early 2007.

 

About 50% of JIN's shares are held by Ivanhoe Mines, Robert Friedland's company. JIN shares offices with Ivanhoe in Vancouver.

 

((THIS company has been one of my long term holds. I have been impressed by management and their ability to get things done, while continuing to get out and tell the stories. Jinshan is emerging as one of a handful of winners in China.))

 

### COMPARISON ###

 

If Jinshan were quoted in Hongkong, what would it be worth?

 

Not a completely fair comparison, because JIN is not yet in production. And both the major Chinese gold mining companies were producing when they were quoted in Hong kong. However, once production starts in early 2007, it will be a relevant and interesting question.

 

Thus, some comparisons are in order:

 

COMPARE CHARTS:

 

Zijin Mining Group, China's 2nd-largest gold miner/ hk:2899

 

Lingbao Gold Company Ltd. / hk:3330 , 2188111

 

Description:

Lingbao Gold Co Ltd. The Group's principal activities are gold mining and smelting. Mines are situated in three mining areas, namely Henan mining area, Xinjiang mining area and Jiangxi mining area.

 

Two HK-quoted vs. JIN.v: since early January 2006: JIN & 2899=Zijin / 3330=Lingbao... update

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COMPARE STATISTICS

Mining Company : Jinshan : Lingbao : Zijin

MarketCap... US$ $150 mn : $612 mn : $4,946 mn

M-Cap, local.. : c$168mn , $4,774m , $38.58bn

Shares O/S ...... : 138 mn. , 770 mn. , 10,513 mn

Share Price ..... : c$ 1.22 , hk$6.20 , hk$3.67

Oz.Resource.... :. 2.9 mn , 1.58 mn , 13.2 mn

M-Cap/ Oz. .... : $ 51.72 , $ 387.3 , $ 374.7*/oz.

Oz.Production. : est117k , est350k , est980k

Employees...... : N/avail , . 2,391 , ... 966

M-Cap/ Prod.. . : $1,282. , $ 1,748 , $ 5,047*/oz.

Cash Cost..... . : $ 253 . , $ xxx . , $ xxx .

$550-cash cost : $ 297 .., $

Margin x Oz... : $861 mn : xxx mn : xxx mn

MarginV / mcap : R- 5.79 :

 

 

==

*Zijin - much more than Gold mining

 

Zijin is mainly Copper

Resources========= xPrice/qty = $Value : mult Valuation

Gold... 375 tonnes.

(Au oz):(13.2 mn. ) $ 550/oz. $ 7.26 bn. x10% = $ 726 mn

Copper. 6,250,000 . $3.50/lb. $48.21 bn. x 7% =$3,380 mn

Molybd.. . 214,800 . $26.0/lb. $12.31 bn. x 3% = $ 369 mn

Zinc...... . 660,000 . $1.50/lb. $ 2.79 bn. x 3% =. $ 84 mn

Tin........ . 100,200 . $9,000/t. $ 0.90 bn. x 3% =. $ 27 mn

Iron...... . 226 mn. . $77.00/t. $17.40 bn. x 2% = $ 348 mn

Coal...... . 400 mn. . $47.00/t. $18.80 bn. x 2% = $ 376 mn

================= . ......... $107.7 bn. 4.9% =$5,310 mn

 

 

= = = = =

LINKS :

Corporate website : http://www.jinshanmines.com/s/Home.asp

Presentation, 5/06 : http://www.jinshanmines.com/i/pdf/Jinshan_May_2006.pdf

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JINshan's Charts : Weekly : Daily : 15min./10day

 

If Jinshan were quoted in Hongkong, what would it be worth?

 

Not a completely fair comparison, because JIN is not yet in production. And both the major Chinese gold mining companies were producing when they were quoted in Hong kong. However, once production starts in early 2007, it will be a relevant and interesting question.

 

Thus, some comparisons are in order:

COMPARE CHARTS:

All three, since early January 2006: 2899=Zijin / 3330=Lingbao ... update : to Oct.24

bignb8.gif : intraday-10d

 

COMPARE STATISTICS

updated, now in first post

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((same group - big news))

 

Ivanhoe Mines and Rio Tinto Form Strategic Partnership to Develop Mongolian Copper-Gold Resources

 

RIO TINTO TO MAKE A STAGED INVESTMENT OF UP TO US$1.5 BILLION IN IVANHOE MINES

TO FUND CONSTRUCTION OF THE OYU TOLGOI MINING COMPLEX

 

LONDON, ENGLAND & ULAANBAATAR, MONGOLIA - Robert Friedland, founder and Chairman of Ivanhoe Mines, and John Macken, Ivanhoe's President and CEO, announced today that world mining leader Rio Tinto has agreed to form a strategic partnership by investing in Ivanhoe and, through an Ivanhoe-Rio Tinto Technical Committee, will jointly engineer, construct and operate Ivanhoe's Oyu Tolgoi copper-gold mining complex in Mongolia's South Gobi region. The agreement creates a defined path for Rio Tinto to become the largest shareholder in Ivanhoe Mines.

 

Provisions of the agreement between Ivanhoe Mines (IVN: TSX, NYSE & NASDAQ) and London-based Rio Tinto (RTP: NYSE; RIO: LSX, ASX) require Rio Tinto to make an immediate investment in the equity of Ivanhoe Mines of approximately US$303 million (CDN$345 million), an amount that will increase, under defined conditions, to up to approximately US$1.5 billion (CDN$1.7 billion).

 

"This partnership with Rio Tinto is the most significant strategic step in Ivanhoe's 13-year history," Mr. Friedland said.

 

"We have long believed that the right partnership would bring important benefits to the Oyu Tolgoi project, the people of the South Gobi region and all of Mongolia. We said in a formal statement three years ago that Ivanhoe was evaluating strategic partnerships with qualified companies that had relevant experience and resources to help ensure completion of a successful mining complex at Oyu Tolgoi. Today's announcement marks the realization of that vision."

 

Please click on the link below to read the news release:

http://www.ivanhoe-mines.com/i/pdf/2006-10-18_NR.pdf

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...minesite story...

 

Jinshan Brings Canadian Alchemy To Inner Mongolia

 

Toronto-quoted Jinshan Mines, which hosted a visit to its mine last week, is only months away from opening this new gold mine in Inner Mongolia. The Chang Shan Hao 217 Gold Project is a breakthrough project for foreign mining companies operating in China. It will be the fourth largest gold mine in China. And, it is also the first foreign-owned gold mine to receive a new gold mining license anywhere in China.

 

Other foreign miners active in China include Sino Gold, which took an existing Chinese goldmine public in Australia, and London-quoted Griffin Mining. Griffin was the first foreign miner to gain a new mining license, but it is a predominantly a zinc miner, and produces gold as a by-product. Some cynics said that China would never give a foreign owned company a license for mining gold. But Jinshan has proven them wrong as it owns 96.5 per cent of the mine, and is a joint venture with Ningxia, the so-called nuclear brigade in Northern China.

 

Jinshan's success has been rapid. The project has evolved quickly from early exploration to a mine-in-development. Those on a recent site visit, saw a mine which is perhaps half-way to completion with huge leach pads in place, a processing plant rapidly taking shape, with power lines erected, and a water supply pipes being laid. The initial gold pour is currently expected in April 2007. Once full production is underway, the mine is expected to produce 117,000 ounces per annum at a cash cost of US$253/oz. That would mean the mine has gone from a rough bit of exploration land to an operating mine in about three years, an achievement anywhere, but especially in China which has a reputation as a difficult environment for foreign companies.

 

This is a tribute to Jinshan's management team, led by its charismatic and young chief executive, Jay Chmelauskas, who was been described as fresh-faced but highly capable. Jinshan shares an office in Vancouver with Robert Friedland's Ivanhoe Group, which also owns about 51 per cent of the stock. Jinshan has made progress in China look easy. At the start, it did not look so promising. The CHS 217 deposit is now a large low grade deposit, which was passed over by various companies at lower gold prices, including a Canadian company, which gave up the deposit before Jinshan took it on.

 

Jinshan has transformed the caste-off into gold, through an alchemy of scale and efficiency. The company perceived that if the deposit was large enough, it could be tackled with the large scale approach used by major global miners, rather than the pick-and-shovel approach used to start many of China's 1,200 gold mines. The company’s initial mining license application raised questions from Chinese mining authorities because the grades were lower than what they were accustomed to seeing on economic mines. It took a while for Jinshan to demonstrate that the Canadian approach of using economies of scale to reduce costs was the best way to approach a deposit of less than 1.0 g/t. The deposit had to be large enough to make it work.

 

After some 20,000 meters of drilling, the deposit is now 2.9 million ounces at an average grade of 0.83 g/t (on a 0.5 g/t cutoff), and a further 1.2 million ounces to the Northeast Zone will probably be mined later. During this visit, Chmelauskis stood in the middle of the deposit and gestured to his right and left saying, "We will be mining about 2 kilometers in either direction." The experienced Chief Operating Officer, Mr. Calvin McKee said that the rock and terrain reminded him of Murantau, where he previously worked as Newmont's general manager of the Zarafshan-Newmont heap-leach gold mine.

 

Last year, Jinshan mined 100,000 tonnes from a trial pit, and found that the material crushes easily and leaches well, and they anticipate high recoveries from their leech pads, which are now China's largest, and have been built to Canadian standards, as the processing plant will be. Jinshan's alchemy was also assisted by rising gold prices, which are up 60% in three years, and a local advantage: low Chinese mining costs. They will be using a large Chinese contractor, whose winning bid was a mining price not far north of US$1.0 /tonne. On top of that, Jinshan will have its capital costs, processing expense and overhead. But with gold near US$600, which is about US$19 /g., there's a decent profit in 0.83 g/t.

 

Others have stumbled in China because they took on projects with legacy issues, uncertain titles, or failed to work "from the ground up." Jinshan has worked hard to get the local people onside. Strong relationships have been built at the local level, before seeking approvals at provincial and national levels in Beijing. Those visiting the mine saw evidence of local ties in an impressive banquet hosted by Baotou's Deputy Mayor under a colorful banner bidding "Welcome to Visiting Mine Inspectors." It is apparent that the local communities are supportive of the foreign influence which is helping to transform once-backward parts of Inner Mongolia into 21st century cities.

 

Government support is also apparent in the improving infrastructure. A 30 kilometer power line is being built from a new local substation to join Jinshan's own 10 km line. And one of the three main routes to the mine is a brand new four-lane highway for most of the 5 hour journey. The quickest route was closed for some repairs, so on the return journey to Baotou, we tried an alternative, winding three-and-a-half hour dirt road through the mountains. Nevetheless, this demonstrated that transport to the mine can be arranged in various ways.

 

Successful start-up will confirm the economics, and help shrink the current discount due to perceived "China risk" and the usual discount for a mine-in-development. Jay Chmelauskas has also said during a recent visit to Hong Kong that he may seek a listing for the company on the Hong Kong stock market. It would likely become the 4th or 5th gold miner listed on that exchange, after giant Zijin, Lingbao, and one or two others who have announced an intent to list such as Sino Gold. Jinshan's own shares were upgraded from the Venture exchange to a full Toronto listing about two weeks ago.

 

@: http://www.minesite.com/storyFull5.php?storySeq=3885

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CHINA NATIONAL GOLD CORPORATION PURCHASES CDN$218 MILLION OF JINSHAN SECURITIES WITH A MANDATE TO CREATE A LEADING GLOBAL GOLD PRODUCER VANCOUVER, CANADA

 

– Jinshan Gold Mines Inc. (“Jinshan”) (TSX: JIN) is pleased to announce that China National Gold Group Corporation (“China Gold”), China’s largest state-owned gold producing enterprise and its financial partners, have agreed to purchase the entire holding of Ivanhoe Mines Ltd (“Ivanhoe Mines”) in Jinshan. The transaction, worth CDN$217.7 million, will see China Gold acquire Ivanhoe Mines’:  Ivanhoe’s entire holding of 67,520,060 common shares of Jinshan Gold Mines, at a price of $3.1115 per share; and  A Jinshan promissory note of $7.5 million issued to Ivanhoe Mines, due June 26, 2010, together with accrued interest at 12% from March 31, 2008. Upon closing of the transaction, the purchaser will replace Ivanhoe Mines as Jinshan’s largest shareholder with 42% of Jinshan’s issued and outstanding common shares. Ivanhoe will retain warrants to purchase up to 1.5 million common shares of Jinshan, each exercisable to purchase one Jinshan common share at $2.50 at any time up to June 26, 2009.

 

Jinshan believes the presence of China’s largest gold producer will create new opportunities for strategic associations in support of Jinshan’s ambitions to expand its asset base through global acquisition, and the ongoing consolidation and optimization of the Chinese gold industry. Jinshan will continue to access global financial markets to fund growth; however, the company will now have access to potentially significant debt facilities from Chinese institutions to fund acquisitions. China Gold has a mandate to optimize and develop more than 65 operating mines and advance their significant exploration and development portfolio in China to international standards. Jinshan believes that it can support this mandate through partnership with China Gold. Jinshan also believes that with support from China Gold and with new access to financial resources, that there is great potential for significant growth within China and internationally.

 

The transaction, which is subject to Chinese Government regulatory approvals and Canadian regulatory filings, is scheduled to close on May 10, 2008. Under the terms of the agreement, the board of directors of Jinshan will be increased to eight members and China Gold is planning to appoint four new members to the Jinshan board, one of which will be independent, replacing certain directors, including Ivanhoe Mines’ appointees. Sun Zhaoxue, President of China National Gold Group, will be nominated to serve as Chairman of Jinshan Gold Mines. Jay Chmelauskas will continue as Jinshan’s President and CEO.

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I'm looking to get a bit more leverage into gold - got plenty of physical and hold an equal amount in silver. I see Jinshan closed at c$3 las tnight - have I pretty much missed the boat on this ? I see it was a recommended buy at less than $2.50.

 

 

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I think this is a good company with good prospects and good management. But the ideal entry point was a couple of weeks back below 2.50. I am hoping it will go higher from here.

 

Take a look at Capital Gold. (US:CGLD) - good producing junior. The stock has been under some selling pressure as people have been exercising warrants but this should have dried up by the summer so the selling pressure that has held the stock back will be gone. Again the ideal entry point was a couple of weeks ago in the low 60s, but the chart looks good for a run.

 

Just my opinion.

 

bigoq1.gif

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I think this is a good company with good prospects and good management. But the ideal entry point was a couple of weeks back below 2.50. I am hoping it will go higher from here.

 

Take a look at Capital Gold. (US:CGLD) - good producing junior. The stock has been under some selling pressure as people have been exercising warrants but this should have dried up by the summer so the selling pressure that has held the stock back will be gone. Again the ideal entry point was a couple of weeks ago in the low 60s, but the chart looks good for a run.

 

Just my opinion.

 

bigoq1.gif

 

Cheers CC. Waited a bit and got in at $0.62 on Thursday ;)

 

Gonna try to get in on Randgold under £21.00 after tragically missing an opportunity to get on board at £19.90 on Friday morning :angry:

 

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I think this is a good company with good prospects and good management. But the ideal entry point was a couple of weeks back below 2.50. I am hoping it will go higher from here.

 

Jinshan currently down at $2.58. I couldn't find anything in the news that had changed outlook fundamentally but I'm mindful of your "below 2.50" call. Any thoughts, CC, since you appear to eat and breathe this stuff ? . . .

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Over the last 3 years the 55 week moving average (blue line) has consistently been a good entry point, so, based on that, yes, you could buy it here.

 

But the stock has sold off lately and I don't know why. It may just be in sympathy with gold. To me this is one of the best gold producing juniors around with the potential through acquisition to quickly become a mid-tier producer.

 

 

 

 

BTW I had lunch with Capital Gold today and I think you have done well to buy the stock. It is a very good company.

 

There is a big decision coming this summer from Anglo-Gold on whether to exercise an option to buy half of their mine. Capital Gold will benefit whether Anglo decide to do this or not. If Anglo decide not to buy, it's possible the stock may sell off a little. But it will quickly bounce back as the company have lots of cards ready to play. So if this sells off, don't panic and sell imo. Ride out the volatility. I am impressed with this company and I am treating my stock in it like physical gold.

 

 

This is just my opinion and that opinion is worth the money you just paid for it - ie zero.

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Jinshan currently down at $2.58. I couldn't find anything in the news that had changed outlook fundamentally but I'm mindful of your "below 2.50" call. Any thoughts, CC, since you appear to eat and breathe this stuff ? . . .

 

I like Jinshan's story, and its managment.

But I sold out my shares near $3.00, because I think the share price may get dragged down a bit

when it announces an acquisition. I plan to buy it after the acquisition announcement and the expected dip.

 

However, below $2.50, I may nibble a bit.

 

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There is a big decision coming this summer from Anglo-Gold on whether to exercise an option to buy half of their mine. Capital Gold will benefit whether Anglo decide to do this or not. If Anglo decide not to buy, it's possible the stock may sell off a little. But it will quickly bounce back as the company have lots of cards ready to play. So if this sells off, don't panic and sell imo. Ride out the volatility. I am impressed with this company and I am treating my stock in it like physical gold

 

AngloGold decided not to exercise their option but the stock gained a little.

 

http://sev.prnewswire.com/mining-metals/20...08072008-1.html

 

Capital Gold's Chairman Gifford Dieterle said: "This is the best possible outcome for our shareholders and a very important event. We can now move forward immediately on our strategy to develop Capital Gold into a mid-tier gold producer." Dieterle added, "We are looking to grow the company through acquisition, the development of our own exploration properties and the potential to further expand El Chanate

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The stock actually sold off a little on the news, but not as much as I thought it would

 

Happy days :lol:

 

Think I'll wait and see if the price ticks down a touch before picking up a few more shares. Still sleeping with one eye open looking for a Jinshan entry point . . .

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Happy days :lol:

 

Think I'll wait and see if the price ticks down a touch before picking up a few more shares. Still sleeping with one eye open looking for a Jinshan entry point . . .

CGLD still reasonable today at 0.68

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Happy days :lol:

 

Think I'll wait and see if the price ticks down a touch before picking up a few more shares. Still sleeping with one eye open looking for a Jinshan entry point . . .

 

Think your entry point is here Justin, it went below $2 today. I'm going in.

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Think your entry point is here Justin, it went below $2 today. I'm going in.

 

Grrr . . . I completely missed that but a quick look at Friday's close had it at $2.18. I'm going to have a look around for anything material that could've caused the drop and if it it's clean, it's gotta be a buy. Thanks for the heads up, GD ! ;)

 

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Grrr . . . I completely missed that but a quick look at Friday's close had it at $2.18. I'm going to have a look around for anything material that could've caused the drop and if it it's clean, it's gotta be a buy. Thanks for the heads up, GD ! ;)

 

No worries. Anyway I missed it too because I got too greedy and set a limit order too low. Serves me right. I got some GDX at a good price last week though.

 

In the end I got cold feet on Jinshan because I don't have time to do the research to get together a good portfolio of individual miners. I'd appreciate you letting us know whether there was anything material in that move!

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Taken a beating recently - down to 2.04 - gonna wait out gold's hiccup then have a look ;)

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I've searched far and wide - can't pin down any fundamental reason for the dip other than the gold price itself, of course. Nothing ominous at all. Sub CDN$2, China bucks behind it and the long-term gold bull market still intact . . . I'm heading in on open - no point trying to pick a bottom for the stock !

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I've searched far and wide - can't pin down any fundamental reason for the dip other than the gold price itself, of course. Nothing ominous at all. Sub CDN$2, China bucks behind it and the long-term gold bull market still intact . . . I'm heading in on open - no point trying to pick a bottom for the stock !

 

Well, I finally bit yesterday at 2.02. Right now it's at 1.79. It's getting beasted by somone out there! :D

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Well, I finally bit yesterday at 2.02. Right now it's at 1.79. It's getting beasted by somone out there! :D

 

Yeah and, fortunately for me, I never got around to buying it. With Gold heading to $850 and the stock price probably tracking that, I'll just hang back for a while . . . even though I can see 1.73 on my screen

 

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Bit the bullet and got in at 1.35 :unsure: Not heavily but I guess I'm looking medium term.

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