Been shaking these off but beginning to wonder if I've made a huge mistake. Today's SA article kinda takes the cake however. Would they have really built a new mine and be doomed from the start b/c of it's location? I mean really, is this actually a concern??? Good Grief!
An interesting tidbit here - the author of the SA article, after an extended exchange of ideas "remains bearish" but has taken a LONG position in TC today.....
Sentiment: Strong Buy
I take comfort in the original PEA, which was based on $2 a pound copper and $700 an ounce gold. If it was worth doing then, it's worth doing now, even with the cost overruns and 52% of the gold going to Royal Gold. If the profit is there to be made, refinancing of the debt will happen. This is a test of the speculative investor. In less than a month it will be obvious to all which way this is going, and the share price will plummet or double. I wouldn't gamble with the rent money, but I like their chances.
Sentiment: Strong Buy
I agree with what you say, but when the PEA was done at such low prices and deemed feasible why is the CEO now saying we are in trouble at $2.50 or $2.80 CU?
Something doesn't add up. Cu prices are strong, the amount of copper alone should be able to support a much higher price than this if the financials are accurate?
Copper supplies are expanding and even if there is no glut of copper, everyone agrees that there is certainly no shortage for the next couple years. In a flat or down market, low cost producers will outperform all others. The ore grade at MM is low (.3%), and requires the processing of a greater proportion of ore per finish product than many other mines. The lack of a railroad siding at the mill increases transportation costs relative to other mines. TC is required to comply with a greater number of safety, environmental and workplace regulations than mines in many other countries. These three characteristics, will make TC a marginal producer from the outset. Other copper mines also have second stream metals, sometimes gold, often silver and moly. The 50% of the gold stream that remains with TC does not provide the substantial competitive advantage that many on this board seem to believe. Be careful of those who suggest that TC is a "no brainer".
Sentiment: Strong Sell
Few copper mines ON THE PLANET have a by-product metal that (at current prices, and considering the full extent of the streaming deal) still defrays upwards of 75% of the operating cost of the mine.
Sentiment: Strong Buy
What's your strategy? Long term investment? How long are you willing to wait before you cash in your chips? If you are in it for the long term and are underwater but it doesn't impact you financially short term, you have to make a decision. Do you believe those who have been saying it's going down to 50 cents? And what do you think it's really worth?
It may surprise you, but I think the books are slightly askew, however I'm not an accountant in the mining industry so I'm not familiar with the sleight of hand used to mask income. We only know we have a working mine and 2 billion dollar mill projected to produce roughly a half a billion + dollars a yr in product for the next 20+ yrs. What would you sell that for if you owned it? 5-7 billion? More with the other properties?
The 9 mo balance sheet shows a valuation of 3.4 billion in assets against approx 2 billion in 2013 liabilities including 800 million in deferred income and 114 mil in deferred tax exp. I assume that's Royal Gold's amortized contribution for the money they gave TC before they become fully vested as a partner on the gold. So somewhere in this maze of numbers and completely unaccounted for are hidden many billions, probably in unextracted metal deposits. The question is, when will those other missing billions filter down to the long term shareholders? Over time for sure, or when the company's sold or the HFT algorithms go long the stock. So, as they say on Shark Tank, what are you going to do? BTW, in the latest hatchet job on SA, the author keeps harping on the missing cost per pound of copper in the financials. There's no cost per pound until the concentrate has been reduced and all the final products are separated and accounted for, but being the expert he is, he would know that. That's one pretty damaging mischaracterization both for him and Seeking Alpha.
I agree that the article is a little weak. He mostly just parroting what the TD folks said. Big deal. If they're not going to make any announcements soon, I'd like to someone on the board/exec level make even a token share purchase. Something, anything that signals confidence to other shareholders. I get the whole diversify away from your employer thing, etc... but these are extraordinary times.
there is nothing in the article today; all he does is refer to the TD article. We have this TD analyst that gives a forecast that the whole market cap of TC will be less than $50 million, while the others point to around $700 million. Kind of a big gap there. And the latter analysts say they will revisit their forecasts when the mine ramps up and guidance is given. If you want an interesting read, check the gold articles in Zero hedge today. Finally, remember our Turkish friend just put down $30 million for shares in TC two months ago. At $50 million he will take the whole company. He is making huge money on steel exports to Africa now. He needs the safe and steady supply of moly, his Chinese partners cannot supply moly that cheap. The rest of TC is icing on the cake.
Sentiment: Strong Buy
It's not that difficult to figure out is it?. The gold stream basically pays for MM costs (@ $200mil). TC moly at $5 cost and $10 price can pay for TC SG&A, etc. Close Endako or leave it open - $10 cost = $10 prices. The copper revenue essentially drops to the bottomline. Ultra can nail these numbers down to the thousand. If one of these analysts would take some broad brush strokes, they might see the forest from the trees. Metal prices aren't going up 30% but they may just hold steady. And, that'll be just fine. Even if copper drops 10%, TC still makes money.
The piece was subpar at best. No wonder I see no opportunity to reply. Can't believe what these guys write that basically say's nothing. The last few SA pieces have been easily dismantled by some on this board that even a novice like myself can see!