Wouldn't it make sense for RGLD to drop the covenants with the provision that TC use the case to rebuy distressed debt? Over the long run it makes sense for both. Stream $200 M lets say, and then raise the Secured Cap to $500M adding in terms that this can be increased as long as the money is spent on certain things ( crusher, buyback, etc.)
Any reason why this couldn't happen? It would be mutually beneficial. I
if there was ever a time for TC to buy back bonds, this is it.... but clearly, given the current prices, there isn't a whole lot of demand, so I guess they're not. Bad time for copper to hit lows of the decade. Oh well.
agreed. No producers will be hedging below the cost of production. what's the point? momentum should shift soon.
Royal Gold already has a vested interest in seeing TC do well. They are doubly incentivized to stream more. Makes them money, and greatly reduces risk on their prior investment.
The additional risk of TC is related to debt... not the mine itself. Guess we'll see if/when a deal comes out.
you aren't taking into account that this stream would be from a fully operational mine. Much lower risk now. It would be a LOT more than $400M
why worry about the extra $25 mil now? they could always borrow $25m to buy the second crusher, right?
also...lt''ll still worth repurchasing 2017 bonds if there is no action on 18/19. obviously later maturities are preferred, but paying $95 instead of $105 for something is still a good deal.
Quick follow up question.. You said bonded stocks are at their lowest in a long time. I see that LME levels were much lower last year, I think 157,000k mt vs the 265 we are at now. So it was 108k mt lower at this time last year.
Am I understanding correctly that because of low bonded stocks in China that overall supply available is actually lower?
Why was LME so low this time last year?
Could this cause a run on gold? 298:1 ratio right now... People wanting to protect value... people getting married in India.... Hope they don't stream before the end of the year. This could be the catalyst that gets all that going... On the other hand.. Commodities could suffer someone else said? I guess I'd say that copper is driven more by India and China so what's bad for us is good for them as far as world reserve status is concerned.(right?)
My call options run dry mid-January.... Lot of potential for good things before then.... but with my luck it will stay here and then pop January 18th :)...
Thanks! I do see that its 1-2K tons lower today. Slowly but surely getting there. Maybe the lower prices will hasten the drawdown and bring supply issues to light sooner.
Arnold might boil me for this, but I see this Fed thing as the perfect opportunity for shorts to cover without causing a squeeze Lots of volume with price in the high $2.20's and enough market noise about the rate increase that no one is going to call too much attention to themselves over the next few weeks. ( which is too bad because I'd really like to see a spike) good luck!
When I look at LME stocks of Aluminum, Copper, Lead, Nickel, and Zinc, they are all tracking a pretty similar (although perhaps not as drastic proportionally speaking) path downwards over the last 30 days. Is this something seasonal? I have been hearing about how copper stocks are as low as they've ever been, but copper doesn't look much different from the other graphs. Any predictions for what LME copper stocks will do over the next month and the effect that will have on prices?
Probably a stretch.... but this could present issues for all mining in the country.? Shut them all down proactively to save face since there's no power either way?
Typical of a government focused on, monopolising wealth and power, looting and self enrichment, Mugabe and his corrupt Zanu PF regime, failed to regulate mining operations in Marange.
The Mines Minister added that infact the companies were not paying their licence fees all along over the years.
This discrepancy came to light when the Zimbabwe’s Minister of Mines, Walter Chidhakwa, announced that, the regime has suddenly realised that all licences for mines in Marange area had expired.
To the discerning eye, this disclosure raises concerns about whether or not, if at all ever, the offending companies, obviously all of them were infact paying any remittances to government coffers.
Mr Chidhakwa, also stated that failure by mining companies to pay and renew their licences meant that the offending mining companies should not continue mining.
This latest move by the ministry of mines, is envisaged to consolidate all the companies and regulatory issues in Marange.
It is again , to the discerning eye, an open admission by the regime that their own mining operations are no longer as lucrative as before and the Zanu PF regime are now desperate and seeking to generate income from independant mining operations, hence the sudden attention to obvious licencing issues, which they missed out on, all along when the going was good. By Sibusiso Ngwenya
photo of the public digging for diamonds, before the Chiadzwa genocide in which Mugabe’s regime used two helicopter gunships to shoot and kill at least 140 of them in broad daylight as away of establishing a military monopoly and control of the then lucrative diamond mining operations.
have you considered writing an article for motley fool or seeking alpha or something ?
You have some good stuff to say and it will reach a wider audience.. I have seen you post a lot of comments on other people's stuff, and a few years ago I think I posted a reply tht your comment was more of an article than the article itself.
I think you could make a fortune basically copy pasting your stuff from here over there. Doesn't seem to be a whole lot of people talking about this power issue in Africa. SA east up that kind of stuff...,. and I think you could get some good quality dissenting comments that don't end up in a back and forth about forklifts and basements.
Give it some thought please :) Thanks!
I think that is a very thoughtful post and I liked it. That said... I give the posters on this board a lot more credit than you do. Analysts have an agenda and not much time. There is also a herd mentality and I there may be an aversion to standing out. If you believe what you are saying (that the market is perfect) buy an ETF and don't waste time stock picking. I do think the market on the whole is undervaluing copper a bit. Basically, every analyst out there is wrong one way or the other. It's not like there's some big market consensus out there that ultra is up against. He happens to be more positive than the mean, and has good (IMO) reasons for it. Good luck sir!
I noticed that trade too.. I put in a bid of 5 cents in case there were any more folks out there wanting to sell. Who knows? Why anyone would want to sell that and pay $10 commission on a $30 trade is beyond me, but more power to them. Maybe it was a margin call or something. There was a 5 contract trade on the ask a while ago for December that sat for weeks. Imagine it was the same person.
I believe that the fundamentals for TC are not as good as when I purchased (the production numbers recently released were not great/not as good as I expected) and I would not pay the same price now that I did before seeing those. That said, not all is lost, and I still believe the company is undervalued. Will it gain within 3 months? Who knows? Fair value of those options is 7-8 cents IMO.
Do ultra and do lo really post from the same IP? Can you prove that?
Looks like one buyer was picking up the ask. A couple of large block trades of 100,000 shares or so. Nice to see someone interested, but it's going to take a lot more demand than that to make a difference.
Current market perceptions of China may be more thoroughly divorced from facts on the ground than at any time in our nearly five years of surveying the economy” -Leland Miller
Maybe copper realities will aid in the shift of this perception and it will become a virtuous cycle...maybe
I think traders/hedgers are looking at Copper as they do Gold and being a little short-sighted about it. People seem to be fine buying and selling paper gold indefinitely. Part of the reason for that is Gold. for the most part, is not useful. The gold façade will continue as long as people treat paper as the real thing and don't mind that paper has taken on a life of its own. There is very little physical supply to back the paper and most folks don't seem to care. Paper is easier to trade anyway.
Copper is different. Builders don't just want to be long 100k tons of copper, they actually want to have and use the copper to, you know... build stuff. Copper shorts are going to have trouble when all the people they sold to start wanting delivery of the real stuff. I'm surprised more Gold bugs don't jump into copper.
Ultra usually you have a lot of comments, but thus far what I'm seeing about the numbers is potato talk. Should we take that to mean that you are not happy with the results?
Has your near-term target for TC changed in light of what many are saying is a bad production number?
When I read your articles about Chile and whatnot, it seems like there are always production and ramp-up issues. Is management really that bad, or is it just the nature of the business.
Thanks in advance for your thoughts