CuDeco trading was halted pending an announcement regarding a Rocklands Group Project Copper Update.

Successful management team bringing large deposits to market. Perhaps to market early? Other speculations are bulk test results, JORC upgrade or an update on EIS.

It would be great to hear from anyone familiar with the CuDeco story?

Last quarterly Moves towards production, China’s Sinosteel to supply 3 mt pa processing plant. They have water for that qty and can contract for more.Issued 6.25m shares at $4, current SP $3.18.

Management

Annual Report

A quick visual overview of the company. Hopefully they had a fantastic voice over instead of the music at the presentation.

The Story. Huge resource opportunity. Fist 18 months worked with one RC and one Diamond and market punished them for that. When boom over they completed 3.5 years in 7 months with 16 drill rigs. Now have five rigs, 3 Diamonds. RC is reverse circulation (tube within tube that hammers way into ground at around 300m a day. RC rig is not the best thing as don’t get to see core like with diamond and the large chunks don’t go up the RC so measurements aren’t as accurate or definite. Drilled with it not knowing there were large nuggets down there.

Valuation. To figure out a net present value (NPV) you’d need to estimate the commodity cycle and production levels, yes you could do that with a probability weighted matrix, but you’d be ignoring other likely scenarios. Perhaps you can assume away those other scenarios and come up with NPV. At worst it gives you a number other people will be looking at and a comparison point for other valuations. A peer comparison by resource size and production gives a fast broad range of values. Acquisition pricing off recent deals.

If the valuations are above the current SP, keep digging.

$460M market cap could be sitting on multi-billion dollar area.
Valuation Info: 20 year offtake agreement for mineral concentrates to China Oceanwide International which has agreed to purchase a minimum of 60% of the total product from the Rocklands project. CuDeco has the right to sell the entire 100% of production to China Oceanwide. Copper/gold and pyrite/cobalt concentrates with pricing linked to LME and the LBMA see details.

Recent news from M*

Las Minerale Central is one of the richest deposits of copper in the world to a depth from surface to 150m within the supergene zone over a central bonanza zone of over 800 metres.  In 2006 I, as the Chaiman of CuDeco, reported that the Rocklands Group Copper Project was one of the richest copper mines in the world and declared Rocklands would be a “World Class Copper  Cobalt Deposit.”   I say it again this time with more confidence and conviction.

Yours Faithfully
Wayne McCrae
Chairman & CEO

China’s and Australia’s sovereign investment arms have bought into General Growth, the 2nd largest US Mall owner, as it comes out of bankruptcy.

China Investment and Australia’s Future Fund hold their stakes in General Growth through entities created by Brookfield Asset Management Inc., a Toronto-based company founded by members of Canada’s Bronfman family. Brookfield and its clients invested about $2.31 billion in the mall unit through the bankruptcy reorganization, with an additional $200 million devoted to Howard Hughes Corp. more at Bloomberg

Confirmation bias is a possibility, that is confirming my idea that buying long term US assets is a good play right now.

If this guy is right “High-quality U.S. commercial real estate is an attractive alternative for sovereign wealth funds to invest American dollars,” then maybe Westfield is worth another look.  Westfield launched 1st Stage of their Online Shopping Mall in Australia on 17th November.

CFA Level 1 study for the December exam is my priority right now. Andrew at ACAP Finance kindly provided me a copy of the full version of their CFA Level 1 Mnemonics Memory Trick Notes. I’ll review their memory tricks after the exam, but for anyone who hasn’t mastered the material yet these notes would be a wise use of  $20.

My other tip is positive visualization. If you want to be on the 40% who pass the CFA Level 1 exam this December then visualize confidently nailing the exam.

By now you should have at least skimmed over the two sample exams provided at the CFA site. Visualize knowing enough to be in the top 40% of taking that exam.

Excerpts from ACAP Finance’s Mnemonics: see the PDF sample with the associated visual clues.

• Kurtosis – alphabetically ordered
• Biases – Small STD Large
• Scale – NOIR
• Yields M<B<E
• Porter’s Competitive Forces – RNB Super Star beyonce
• Put Call Parity- SiP-a-CoKe

Disclosure: ACAP Finance provided me a copy of their Mnemonics without charge so I could review them.

M2 announced today higher than expected 2011 forecast.

According to the guidance M2 expects substantial growth since the last financial year.

• Revenue is forecast to grow by 12 per cent in 2010-11 to between $425 million and $445 million from the forecast $380 million to $400 million in 2009-10.
• Net profit is expected to explode 52 per cent to $22 million and $23.5 million in financial 2011 from the 2009-10 guidance figure of about $15 million.
• Earnings per share is forecast to rise 36 per cent to between 18.1 cents and 19.4 cents from the previous year’s guidance of 13.3 to 14.3 cents. Excluding non-cash amortisation of customer contracts, underlying eps is forecasted to up 42% to 20.7-22 cents.

The market still appears to be substantially undervaluing MTU. On underlying eps MTU is trading at a forward P/E of 8.7 which is ludicrously low for a company executing their growth story in such fine fashion.

Disclosure: Long MTU

Headline Group popped 18% yesterday, up 5 cents to 33c on huge volume of 1.4M shares after this big announcement.

The highlights of the announcement were:

1. Mothercare PLC proposed acquisition of 25% of Headline Group via investment of $12.2M.
2. “Baby on a Budget” acquisition in W.A. Seven stores, deal multiple of 4x EBITDA .
3. Headline to acquire 100% ownership of Skansen KCG in returns for shares in HLD.
4. Current stores operating above expectations.
5. Roll-out of Mothercare stores to be accelerated.

Headline Group Limited has exclusive rights and is currently launching the world’s leading retail parenting centre into Australia under the international brands of Mothercare and Early Learning Centre Toys.

Thoughts anyone?

Disclosure: No position at time of writing, but looking closely.

Jeremy Cooper, the superannuation reviewer not the brewer, has released A Conversation About SMSFs. This document is as refreshing Cooper’s Pale Ale, Cooper even leads off with a Coopers joke.

I encourage all SMSF trustees to read the document, though in summary Cooper says SMSFs are doing well and despite concentrated asset allocations* are performing as good as if not better than other investment vehicles.

SMSFs might be able to aspire to this [excellent performance] because:

• SMSFs can pursue asset allocations that would be difficult to implement in an APRA-regulated fund;
• SMSFs can have longer-term investment horizons (ie not chasing short-term performance driven by league tables and ‘peer risk’);
• SMSFs can be run in a tax-efficient manner, particularly in transition to retirement and in managing assets supporting a pension;
• there is a better alignment of interests in a SMSF – members can make well informed decisions in their own interests with minimal agency costs; and
• members are able to bargain directly for reduced prices for the various services they need (eg accounting, administration and broking).

A favourite line of mine from the conversation is “One approach might be to say: “The SMSF sector isn’t broken so it doesn’t need fixing.” How refreshing is that? It appears Cooper is endowed with more common sense than all our politicians combined.

* 59 per cent of SMSFs, that’s approaching 250,000 of them, held only listed Australian shares and cash/term deposits.

The Super System Review is examining Australia’s superannuation system in three phases. The Cooper Review released the phase three issue paper later today. Here’s the timeline for the review.

There has been some great if obvious findings so far in the review.

MORE than $13 million a day is being sucked from Australian retirement savings because of underperforming retail superannuation funds and commissions paid to financial planners…

via Business Age

Last week the Super System Review released statistics on self-managed super funds.

The Super System Review today released a statistical summary of self-managed super funds (SMSFs). The summary provides a broad factual overview of the SMSF sector, which is both the largest (by asset size) and fastest growing superannuation sector.

The summary provides information on topics including: SMSF member demographics, investment performance, operating expenses and compliance issues.

Key statistics

As at 30 June 2008:

• 73 per cent of SMSFs had more than $200,000 in assets.
• The average SMSF member balance was $456,000 and the median balance was $288,000.
• Members aged 50 and above represented 67 per cent of total SMSF membership, while in other superannuation sectors only 22 per cent of members were aged 50 and above.
• The operating expense ratio for the average SMSF was 0.69 per cent, down from 0.86 per cent in 2006, a fall of nearly 20 per cent. [Excellent stuff, the expense ratio should continue to fall]

From the executive summary

The SMSF sector is the largest superannuation sector by number of funds and asset size. As at 30 June 2009, there were around 410,000 SMSFs, representing 99 per cent of all superannuation
funds, with over $332 billion or 30.9 per cent of total superannuation assets ($1.08 trillion).

The sector has about 772,000 membrs, which comprises about 7 per cent of the roughly 11.6 million members in Australian superannuation.

The SMSF sector has reached its leading asset‐size position in the superannuation industry,
surpassing the retail sector in 2009, through rapid growth in recent years, increasing from $132 billion to $332 billion in the five years to 30 June 2009; an annualised growth rate of 20 per cent.

2x leverage wasn’t enough so we got 3x, now Kelly Capital are taking it to an extreme with 100x leverage. It’s good to see someone at the SEC has a sense of humour, Ben Meriwether is a funny guy. Of course the powers that be at Kelly Capital also appear to be full of mirth calling their leveraged ETFs, SINK and SOAR.

“These are intended for attentive traders only,” says Kelly Capital chief executive officer Jason Kelly. “The extreme leverage employed will cause both funds to go bankrupt within the course of most trading days.”
Kelly Capital will reset and re-launch the funds at the beginning of each trading day. The company is in talks with the Security and Exchange Commission about the possibility of re-launching the funds after lunch should they go bust in the morning session, but the SEC is balking.

SEC spokesperson Ben Meriwether says: “We recognise the right of investors to employ as much leverage needed to find fortune or ruin in a day, we just aren’t sure of the need to extend that right twice per day.”

via Kelly Capital launches 100x leveraged ETFs | ETF Express.