Sapphire Corp

As you know, Sapphire has a 9.2% stake in VTM which is a listed company on the HK exchange. In marked to market accounting,  the market value of the VTM shares  is computed at every financial reporting. So if the VTM shares are up or down, the value will affect the bottomline of Sapphire. In recent quarters, the VTM shares have fallen (cos of the euro crisis affecting markets everywhere). Came down from nearly HK4 to nearly HK1 in 2H2011.

So Sapphire's net profit has been pretty ugly.

The stock now is HK1.72.....

Thanks for the explanation. So do u think sapphire is fundamentally a good company? Profitable? I notice it's revenue is increasing but the profits (before mark to market accounting) are not increasing proportionally cos it's operating cost is increasing by a lot more. Do u know why?

Let’s wait a bit more for the results to come out.

In the meantime, Sapphire’s China VTM has received a positive rating from StanChart in HK. It  maintained OutPerform with TP HK$3.69.

what about buying China VTM too? haha where can we find that report?

CHINAVTM MINING (00893) maintained OP with TP $3.69 by Stanchart

2012-01-06

China Vanadium announced that it entered into an Acquisition Agreement to acquire the entire paid-up registered capital of Panzhihua Yixingda Industrial Trading Co. Ltd. (Panzhihua) for a consideration of at least RMB600mn on 28 Dec 2011.

The only asset of Panzhihua is the Yixingda iron ore mine covering an area of 20.37sq.km at Panzhihua City, Sichuan Province, with exploration permit from 14 Nov 2011 to 31 Dec 2013. It is estimated by an independent geological agent that the mine has a minimum of 100mn tonnes of resources and reserves with minimum average iron content of 15% or above.

We think this is positive for China Vanadium’s long-term development, considering the potential capacity of the mine could reach 1-2 mtpa, depending on its final exploration results.

We maintain our Outperform rating on China Vanadium and price target of HK$3.69. The current share price suggests a valuation of 4.2× 2011E PER and 3.5× 2012E PER, which looks very attractive.


China Vanadium announced that through its wholly owned subsidiary Lingyu, it entered into an Acquisition Agreement to acquire the entire paid-up registered capital of Panzhihua for a consideration of at least RMB600mn on 28 Dec 2011.

The target asset. Panzhihua’s only asset is an iron ore mine (Yixingda mine), which covers an area of 20.37sq.km at Renhe District, Panzhihua City, Sichuan Province and it holds an exploration permit that is valid from 14 Nov 2011 to 31 Dec 2013. According to an independent geological agent, the estimated resource is at least 100mn tonnes with a minimum iron grade of 15%.

Completion of the acquisition is subject to satisfaction of condition. A minimum of 100mn tonnes of mineral resources and reserves with a minimum average grade of 15% needs to be confirmed by the Mineral Resources and Reserves Report issued by an independent geological agent before 30 Mar 2013.

Final consideration of this transaction. This is also based on the final mineral resources volume (with minimum Fe grade of 15%) determined by the report, and progressive rates apply: For the first 149,999,999 tonnes of resources, consideration is RMB6/tonne; rising to RMB5.5/tonne between the 150,000,000th tonne and 200,000,000th tonne; while consideration for resources above the 200,000,000th tonne is RMB5/tonne.
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[jameskuwe 29-01-2012]:
what about buying China VTM too? haha where can we find that report?

thanks for the report. did you notice that Sapphire increased by 2.3 cents or 16% today? now trading at 16.2 cents with high vol too