THEMAC RESOURCES GROUP LIMITED (
In October 2010, Kevin Maloney Chairman, Founder and 68.5%
shareholder of THEMAC Resouces (via Tulla), sold his listed
mining services group The MAC Services Group in a $651 million
deal, from which he took about $340 million off the table.
The MAC Services Group Mr Maloney built from the ground up,
hunting out opportunities in low cost operations and renting them
accommodation, Like many Aussie's Kevin Maloney knows his way
around a mine.
So with $340m in his pocket, where did Kevin Maloney head to,
Monte Carlo, The Greek Islands, no he headed for the dusty plains
of New Mexico looking for what he and I agree is the next big
While journalists beat up the China hard landing story and
Copper is trading very cheaply, many people have over looked the
real copper news.
Africa, South America, Australia and Asia are closing the door
on foreign ownership, introducing taxes and changing the future
cost base of Copper. At the same time demand for Copper is rising
Global growth may have slowed a touch but due to the continued
growth in emerging markets the consumption of commodities is
expanding faster than supply. Heffernan Capital Management and
Morgan Stanley predicts shortages in copper, palladium and iron
ore this year and Barclays anticipates the same thing for
China's economic growth will decelerate to around 8.1% this
year and edge up to 8.7% in 2013.
China's manufacturing activity is far from optimistic despite
the Country's Purchasing Managers Index (PMI) for the
manufacturing sector put in a predictable slow Q1.
China's economy expanded by 9.2% in 2011 from a year earlier
and 8.9% Y-Y in Q-4, according to the National Bureau of
). ASEAN, BRICS and other Emerging markets are also growing at a
solid rate, in short there are no real demand fears and the
numbers support that fact.
Increased net imports and higher domestic production pushed
implied consumption for refined copper in China, the world's top
consumer of the metal, up 20.8 percent month-on-month in
February, based on official customs data released on
Daily implied consumption of refined copper in China surged
44.7 percent from a year earlier, despite increased stocks in
warehouses monitored by the Shanghai Futures Exchange.
China's inflows of refined copper rose 12 percent
month-on-month in February to hit the third-highest level ever at
375,831 tonnes on delayed shipments from the holiday month of
January and as buyers stocked up on expectations of rising demand
during the peak March-May consumption period.
The imports rose 137.6 percent from a year earlier.
So far we have 2 Winners, Kevin Maloney, proven
Miner/CEO/Chairman/Entrepreneur and Copper a Metal that has a
solid future. The location in New Mexico is free from the
problems facing the emerging markets.
Now lets take a look at the site:
The Highlights are
Drilling program underway with following main objectives:
Better understand gold and silver controls
Expansion of resource base through step-out and depth extension
Definition of additional high grade breccia resources
Providing in-fill geotechnical data
Preliminary modelling indicates the early processing of higher
grade material will likely remove capital sensitivity of the
overall project (Capital payback potentially 2 years)
Status: Preliminary economic assessment (PEA) - Complete
Prefeasibility study (
) - Underway
Permitting - Underway
Planned Production: 36 million lbs copper per annum
Mine life: 17 years
Cash costs: US $1.41/lb copper equivalent
First production targets: 2014/2015
Resources: 107Mst Indicated
0.303% Cu, 0.01% Mo
0.24% Cu, 0.006% Mo
Civil infrastructure in place: Tailings dam, largely
pre-stripped open pit, power lines, water well field and
pipeline, access roads, diversion channels and building
At 36 Million Pounds of Copper per annum at an estimate of
average $5 per pound in 2015 provides $180m in revenue, based on
a cost of $2 (estimate) leaves $108m, if you include an
excessively high interest and administration cost of $1 per
pound, then gives a bottom line of $72m ignoring Gold etc
At $72m and trading at a discounted multiple (FCX equivalent)
with 74m shares on issue we should be looking at around $8 per
share in production.
After the DFS the stock should move over $2, but the Heffernan
Capital Management long term 2015 target remains $8 per
Shayne Heffernan oversees the management of funds for
institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with
him over 25 years of trading experience in Asia and hands on
experience in Venture Capital, he has been involved in several
start ups that have seen market capitalization over $500m and 1
that reach a peak market cap of $15b. He has managed and overseen
start ups in Mining, Shipping, Technology and Financial
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