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Author: kbatl Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5  
Subject: Re: Idaho General Mines Inc. Date: 8/31/2007 2:25 PM
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I listened to the conference call yesterday and was impressed. I had bought some shares after I heard the outcome. I think it will gravitate a bit until it gets more institutional buyers, there seems to be a lot of shorts attacking it periodically, which makes it volatile.

Here is te powerpoint link from the call yesterday.
http://www.igmines.com/gmo/presentations/gmo_presentationBFS_Release.pdf

If you have some time, listen to the call also:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=181598&eventID=1623511

The NPV of simply the Mt Hope project is about $19 per share. They have another smaller mine in development, which bumps it up to low 20's. They will need to do a possible 2ndary offering, which may dilute a bit, but could see a valuation with built-in risk of $13-18, depending on how well they can keep on schedule.

If some long-lead items start to slip or permits aren't issued in a timely manner, or if Moly prices slip well below $30, the price could come down quick. I'm comfortable with an entry price anywhere below $6 (it's at $6.60 now), but think it will gradually move up once institutional buyers get in, and the timeline progresses on schedule.

If they promote themselves well to institutions, they are helping investors, since a 2ndary will result in less dilution with higher prices. I could see this being bought out at $20-24, if it looks more promising.

If they decide to remain GMO for the long haul, Moly is $20-25 long-term, and discount at 8%, NPV could be $2.5B (nums may be off a bit, don't have the ppt open). With a 30% dilution for a 2ndary, 100M outstanding shares, looking at GMO = $25 (just for Mt Hope), and add in $4 for the other mine, and the high end target of $29. $15-20 in the next few years is much more likely. Anything above $9-10 would be an expensive entry point by the end of the year. People will get bored, and sell some off in the next year. Buy on the dips, and wait. There is a lot of work to be done. Any major slip-ups will cause this to drop severely.
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