two weeks ago the 2018 notes were trading in the low to mid 70's , after having troughed at even slightly lower levels. Late this week, the same bonds were bid strongly (in size) above 80 cents on the dollar. This reflects that the bond investors are gaining confidence that the recovery in copper prices and the positive affect on TC is more likely, ie more realistic.
The common shares are also showing signs of accumulation. There is a lot of overhanging supply to hinder price improvment, but all in all , the above are constructive signs .
At first blush, one can see why many people are disappointed with the recent price action of TC, in the face of a pretty nice more than one day rally in copper prices. It probably reflects the attitude by investors that they are not about to give TC the benefit of doubt , they would rather wait to see copper rally more and stay up than to pay up for TC shares, before they see the copper rally sustained. This of course does have one advantage for the smaller trader/investor. If you believe that copper will continue to rally, it gives you the opportunity to buy shares on the cheap longer and thus increase your total return eventually. Because it is a virtual certainty that if copper prices go higher and stay higher , TC shares will also move higher.
I don't care what he did with it. It is an abuse of this board for him to have even posted about it especially in the manner of his disgusting style . Only unintelligent people are drawn in by him.
I is amazing that some people put up with his fake accent bs. He is the multiple ID perpetrator, but he accuses me of it. I have some suspicions of who his other main alias is, but won't say it at this point
with the stock selling off, even in the face of dropping oil, is suggestive that the big money knows that fundamentals are deteriorating. The read on my channel checks and indicators agrees in that price competition is finally making its way back into the equation combined with softening bookings.
They always say "this time it is different" and for a long while it was, but the one thing that has not changed is HUMAN NATURE. And given what has occurred in the energy market, the world economies, the geopolitical landscape, it was only a matter of time before that HUMAN NATURE exerted its unstoppable and unchangeable force.
The analysts see it, some have recently reflected it in their analysis, it suggest that pride , or conflicts of interest keeps others from adjusting their ratings and estimates.
I am not trying to predict a complete demise and trashing of AAL stock, but it is fair to say, that evidence is growing that "we have seen the highs"
People talking about $100 a share prices and buying on margin despite already having too big of long positions were just another sign of a "top".
I know this post will get thumbs down, but it won't change the truth.
Do lo when's recent plugging of his penny stock play should tell you that he is a person trying to manipulate others If you had any doubt before, you should reevaluate.
I am Arnold, not "bernie". I post only under this ID. He has persisted in perpetuating lies and false accusations. Not one bit of evidence has been presented.
Frankly, I am a bit surprised that more people on the board have not called him on his abusive behavior, both on the bernie false accusations and the pumping of his penny stock play PAL.
TC shares will appreciate in value if and only if metal prices , particularly Cu and Moly increase substantially and sustainably.
But the real world chances of a take over at a PREMIUM is essentially nil due to the onerous terms that TC management felt forced to agree to with Royal Gold. Unlike the note debt , which itself is formidable, but at least has a chance to be resolved at some future date if metal prices increase, the Royal streaming agreement can only hurt TC, because if Gold prices rise, plus the natural tendency for inflation of costs added, cost to mine the Gold will increase, but no matter how high those costs go, TC has to sell 52.5 percent of the gold produced to Royal at $435 and ounce, not for 5 years or 10 years, but for the life of the mine which is now considered to be 24 years, And TC cannot buy itself out of this agreement. It is conceivable that TC could actually get into an extreme money losing situation with gold price moving higher , and gold cost moving higher to the degree that the margin on their 47 percent share not sufficiently offsetting the big losses on the 52.5 % sold to Royal at $435. NO ONE is going to offer a premium to buyout TC shares with this reality.
Contrary to the opinion of some, all streaming agreements are not created equally onerous. It is also a fact that TC's first streaming agreement with Royal involved a much lower percentage & was increased subsequent ally. Yes, they may have felt they had to, but that doesn't change the fact that it SUCKS, and that it will be a huge drag on TC's financials for the next 24 years.
Bottom line, it is ok to hope for share appreciation in conjunction with higher copper prices , it is a pipe dream and unrealistic to hope for a buyout at a premium.
translation of the Cowen action:
Cowen trading desk was caught short on AAL and need this downgrade to get them out of the difficulty.
Guaranteed that Cowen's trading desk will be one of the bigger net buyers of AAL today.
very cute stephen, but hypocritical. I am not the one playing "childish games".
There is no change in my opinion re the repurchase of the 2018 bonds at a steep discount. It would be beneficial if it could be done prudently and safely . Safely meaning , not putting them of greater risk of liquidity crisis. If you refer back to my posts on the subject which were quite a few, I always maintained that the restrictions or limitations on them doing it , would be availability ( obviously not a problem now as plenty of the debt is available at a steep discount) and their financial ability to do so; not the terms of the indentures.
The company clarified in last friday's conference call that they "have more uses for cash than they have cash", and that they are quiet on the bond repurchase at this point, ie which means they either don't have enough cash cushion to feel comfortable buying back more at this time , given the other demands on cash and perhaps their priorities for use of cash. So you can direct your questions or advice to Mr. Perron if you wish.
your wrote ," But Arnold, what about all the cash they have? They can put aside the extra $60 million ($15 million is already budgeted for) for the crusher and they still have $200 million. Why don't they use that money for open market bond purchases? "
Look at their balance sheet, they have $91 Million in Payable account vs only 42 in receivables. Also if you understand the business, they can't control the timing of certain payments going in and out, and since the credit markets are closed to them (effectively because of rates), they MUST a considerable cash on hand position to avoid a liquidity crisis. Also they have to keep some additional cushion should copper prices drop. They simply cannot afford to spend money on ANYTHING not absolutely necessary at this point.
As far as being on "team ultra" in regard to the indentures, that is your choice, Perhaps you should research things further, all of Ultra's arguments are founded in part truths, the 2018 and 2019 notes are described as "senior", they are not subordinated obligations. the terms of the "collateral" portion of the indentures speak about protecting the collateral , ie the production facilities etc, an example is keeping the production facilities in good working order etc. They are not talking about the use of cash balances , if that were true , paying for the construction of the permanent secondary crusher construction could or would be prohibited by the indentures. You could contact the U.S. trustee Wells Fargo , if you want the truth, but somehow I get the sense that the "Team ultra" is not interested in the truth, rather the continuance of the megolamanic control of a yahoo finance board game.
6. If the recent modest recovery in commodities like oil and copper fade and instead turn back to a negative trend, then those cash needs for TC come under further pressure, as the previous factors discussed in this thread all point to an accleration of difficulty, ie credit markets more closed than they are now, etc
7 In the cc, Pam Saxton , in response to questions and discussion of the priorities of cash management etc, said "we have more uses for our cash than we have cash."
So bottom line, at present and unfortunately in the forseeable future, the issue of whether TC is restricted from making more open market unsecured note repurchases by the 2017 indentures is a moot issue, they cannot make them because they simply don't have the cash to prudently do so .
It also speaks to the issue of investability in TC. By any reasonable analysis, it is a highly speculative issue which conventional wisdom dictates should be only a small portion of ones investment portfolio.
I have a confession to make. I usually don't invest in the manner I did as I made my initial investment long in TC last summer without doing h due diligence, when I read your and dragon legal's post discussing it on another board
Having studied it considerably since then, I realize I would have not bought it had I done the study first. My mistake. For me it represents a small fraction of considerably less than one percent of my portfolio, so I am trying to view it as an option. I don't buy options, I sell them, that is how I made my nest egg as an option market maker,
It might work out, but it is not one to bet the farm on, that is an understatement, for sure..
a few days ago you spoke about the very important issue of 2015 cash flow
The analysts were of the same mind , more than one asked multiple questions to clarify the projections . I encourage all to read the cc transcipt, & in particular the Q&A from the Jeffries and Deutsche Bank analysts. They were persistent enough to finally get the answer that at current metal prices, that TC is only slightly 2015cash flow positive IF you take into account the moly inventory . That inventory will be sold this year, in fact , most of it in the first half and as the analysts learned , help to cash flow will be gone ..ie not applicable to 2016
Bottom line, TC will not be building cash significantly unless & until the copper market recovers significantly.
This as you opined has implications for the investability or wisdom in investing in TC shares.
The above material also speaks to the other issue , open market debt repurchases.
1. TC is not now , nor does can it expect or t project significant cash build in the forseeable future.
2. the projections made for 2015 production are going to be back end loaded, given the update the first quarter has been weak due to weather AND operational snafus. That makes these projections, at the very least, reasonably at risk of being made.
3. TC has already declared the need for a permanent secondary crusher, with the capex cost of aprox $75 million.
4. The bond market for TC's unsecured notes is speaking loudly that the credit markets are effectively closed to TC at rates worth considering. Hence TC MUST set aside the $75 million for the crusher from existing cash on hand.
5. Given TC's other cash needs in the normal course of business, it becomes clear that TC cannot afford to make any expenditures not absolutely necessary, including open market bond repurchases, no matter how good it would be for them to do so.
Continued in reply
Ask yourself the following question:
If Ultra is so smart, with such business acumen , understands the terms of the indentures which he believes are so restrictive as to not permit the company to do the obviously wise thing of reducing debt in the best possible manner , the terms of the streaming agreement , the markets, etc etc
then why did he invest so much of his personal funds at MUCH HIGHER PRICES in a company that was so severely restricted by those indentures (assuming he is correct in his view) and in a company managed by people who would get the company is such an onerous and unfavorable position
Someone who believes as he does should have not made the mistake of paying up for the shares. On any level, any way you look at it he comes up lacking.
I will give you one thing, you are consistent. Unfortunately consistent in making the errors that your megalomania forces you to do.
You can't think of obvious reasons for Perron's response? are you that dull? I don't think so, it is just your megalomaniacal pride which prevents you from seeing the possible reasons they might be :quiet now" (it is all quiet, of course, not all quite)
The 2017 notes have priority to the unsecured 2018, 2019 notes in the event of a default by the company. That is a different concept than that of open market repurchase. Even a reasonably intelligent junior high school age person could understand the conceptual difference.
he could have said, all is quiet because we are restricted by the indentures, but he did not say that.
He did not give any time parameters of future changes in in the process , just that they were quiet NOW.
jack, perron answered the question wisely. As I have said from the beginning , the only limitations and restrictions on TC buying open market of their outstanding notes, are factors such as how much cash they have, the outlook for cash management in the forseeable future, including factors such as known needs such as the operational aspects your mention etc, outlook for copper prices etc, and the willingness of note holders to sell at discounted prices. Right now the last factor is not a problem, but the first factors are. That is what is restricting or limiting them, they don't have enough cash considering the other needs for cash , to feel comfortable spending on the open market purchases. It is not because the indentures are stopping them. I hope that will change , because it would make a big difference. In fact, it is a good indicator, one should not get too bullish about TC stock , if they are not able to take advantage of the opportunity placed before them. But then, following the history of TC, that has been pretty typical.
An analogy can be easily understood. How many people on this board had spent their total available investable money on TC stock at prices above $2 or $3 etc, and could not take advantage of the opportunity at $1.20? , whether actually physically limited by no available funds or too scared to take the chance of being even more exposed than they felt prudent. TC management, unfortunately may be in the same predicament.
"No RGLD agreement = No Mount Milligan"
maybe after the mismanagement of the previous ceo, it got to that, but it does not change the validity of my post. All streaming agreements are not created equally, it certainly is conceivable that agreement could have been designed to be less one sided to Royal's favor, if the TC management at the time had been better negotiators or had managed the company in such a manner that they were able to be in a position of more strength to be able to demand better terms.
Bottom line, it does not change the fact that TC will be shackled and limited financially by the agreement in the maner I described,
you are one classy person.
his response today to the question does not indicate that you are correct, if you cannot figure out the possibilities, I am certainly not going to help you.
Why would the holders of the 9.75 % care if TC purchases bonds on the open market at prices that others are obviously willing to sell at. It does not hurt those who continue to hold the bonds, if TC buys some of the outstanding debt. In a sense , it helps the 2017 holders, in that , if purchasing any of the notes on the open market at discounted prices places TC in a better position financially it makes their investment more secure, not less
Only in your twitsed megalomanic mind do you not realize that the covenants of the notes were not meant to be punitive to TC and make it harder for them to survive and prospser, but only to protect the interests of the note holders, so that they will receive the principal and interest that are due to them. That is what they contracted to receive , the spirit of the covenants is to protect that right, not to make it harder for TC to manage their balance sheet prudently. The fact that some of their fellow note holders are willing to sell at lower prices does not harm the rights of the note holders who choose to continue holding their long positions in the notes.
smart money investors really don't care about TC's last quarter earnings, whether they made a penny or two or lost a few pennies per share is not very important to the investment thesis for TC.
The key is if they can manage their balance sheet while they wait for the metal markets for Copper and potentially Moly recover.
we have often talked about the 2017, 2018, 2019 notes of debt which is just under $1 BILLION,, which is a big drag on the company & the need for the company to see it way in reducing it. But the Royal Gold streaming agreement, which has been serially expanded is even more pernicious. Why?
the note debt can conceivably reduced and managed, but the streaming agreement which mandates that tc sell 52.5 percent of gold production to Royal for $435 an ounce no matter how high gold may go is for the LIFE OF THE MINE. Adding insult to injury if gold rises and costs to mine gold rise, TC has to bear all those costs , royal pays nothing, and still gets the gold production for the same price. So for at least the next 20 years, TC pays all the costs and gives that differential to Royal with no way to get out of it. If the life of the mine is extended, the agreement is automatically extended. If you do the math, the amount of money TC is EFFECTIVELY paying Royal Gold over the life of the mine is considerably more onerous than the significantly onerous trio of notes 2017-2019. This reality is probably the biggest reason why those who make huge upside share price predictions are being unrealistic.
I post only under this id. I suggest that you stop making false accusations.
Your continued abuse makes me suspicious that it is you who is attempting to fraud the board with multiple iD
I don't know nor do I care what other ID"s you may use, but I defy you to show any evidence that I am posting here with other iD's. You cannot , because I don't do it.
I challenge you to reveal who your "friends" are, ie those that have informed you that "arnie and his ID army are at it again". It is a lie and you are doing something wrong. I don't care if I am ignored or not. I am only trying to post and learn truth.
As I said, I don't know which ID's here are part of the "ultra gang" that has as its mantra, the sytematic abuse of anyone who dares post things that the gang perceives as a threat to Ultra's megalomaniac inspired self appointed "king of the board" I won't spend time trying to elucidate it, but it here, any intelligent person can sense it.