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Silver Wheaton Corp. Message Board

dlhild 606 posts  |  Last Activity: 8 hours ago Member since: Dec 3, 2009
  • Yet there is no discussion here. Humm.

  • Reply to

    Any view on the CEO announcement?

    by darv222 Jul 10, 2014 2:02 PM dlhild 8 hours ago Flag

    I agree with poorhouse that this was a positive change. I'm guessing Jon Salveson played a role in this happening. I suspect one thing could become a problem though. SA is a 100% control freak, like a total control freak. The company is his baby and his life. Can he REALLY step back and let Pat Mackin (PM) take control? I don't know, but this will be an interesting dynamic to watch as we go forward in time. If SA and PM can in fact work well together, they would be a powerful force. Also, it had always appeared to me that DAL was perhaps being groomed for the CEO role, so I wonder how that will play out. Since DAL is more a finance person, the selection of PM was a good one in my opinion. Another plus is that prior to this it was my view that CRY's relationship with MDT was probably very poor, because of SA's personality..just my opinion obviously. Now though, CRY's relationship with MDT is likely a good one. The odds of a buy-out just went up. Probably not right away, but a year or two out CRY may well have some attractive buy-out characteristics. I think too that this just made the buckeye 3-5 game plan even better.

    Conclusion: Definitely a positive development. If SA and PM can work well together, then this will likely prove to be super positive. Also, it was time for new blood to evaluate CRY's product line and start making needed changes. Simply put, it was just time for some fresh blood at CRY.

  • Presently there is way to much capacity, so prices are in the tank. Global growth is slow, and perhaps slowing, so volumes are not going to increase any time soon. Nattie gas price at Henry Hub is at the very low price of $4.22/Mcf. This makes it hard for coal to effectively compete in the US. Coal exporting capacity on the west coast is still limited. BTU did extend their debt payment schedule, so they have some breathing room for the moment. However, for another 6-18 months coal is not likely to do well. While I'm long a few shares, I would not be a serious BTU buyer above $12/share. It may even hit single digits before sufficient coal capacity is taken off line. Also, if the Fed is tapering $35B per month and sounding like they are going to taper to zero, interest rates may bump up and growth slow even further. If on the other hand they quit tapering, then they are admitting the economy is not growing very much and that is bad for coal volumes. No reason to buy BTU to buy anytime soon at the current price. If you ant to read an interesting reflective blog on energy and the economy google "our finite world". Just my simple opinion.

  • by dlhild Jun 20, 2014 12:59 PM Flag

    04/15/2015 - 2.375% note is due - $267,000,000

    08/15/2015 - 3.25% note is due - $513,000,000

    Do you hear the BIG sucking sound of bankruptcy...?

  • by dlhild Jun 18, 2014 9:02 PM Flag

    Coal prices are still crap. Low volumes + crappy prices = low prices for quite a while longer. Buy next June for $7.50/share.

  • by dlhild Jun 17, 2014 1:53 AM Flag

    MDT - COV, your thought?

  • Google Gail Tverberg and read her blog. She projects global energy usage usage will peak in 2015 at around 12.5 Mtoe's and then decay exponentially to around 2.5 Mtoe's by 2035. In other words she is saying energy usage will fall by an estimated 80% over the next 21 years. Should this happen, the global economy would be destroyed as we know it. Don't blow off these estimates lightly, because she makes a strong case that energy will fall this much because as energy, particularly crude oil, prices get too high people can't afford the high price. Without the high price the producers can't afford to keep going after the cheap oil. This results in recession/depression and the system continues to implode. This is an excellent blog. The title of the blog is "Our Finite World". She argues that if crude oil prices collapse because of financial reasons, other energy prices like coal will collapse too.

    Civilization it not natural. It has to be continuously fed with energy, resources (physical and human), and needs a moral structure and probably a legal structure as well.

    I think she makes quite compelling arguments for her positions.

    A great video on how math, energy, economics, and the environment work together is one by Chris Martenson. Google "Martenson the next 20 years". A zerohedge link will show up and the video is contained in that link.

    Enjoy, or perhaps panic.

  • by dlhild Jun 3, 2014 11:02 AM Flag

    Coal prices are the big reason BTU's stock price is down.
    CAPP $60.70 per ton down $1.88 per ton WoW
    NAPP $65.50 per ton down $2.67 per ton WoW
    ILL Basin $46.00 per ton down $0.02 per ton WoW
    PRB $13.00 per ton down $0.02 per ton WoW
    Unita $36.75 per ton up $0.02 per ton WoW

  • There are roughly $380,000,000 in these debentures outstanding. At $2.50 per $1,000, the penalty payment would be roughly $950,000 (if every bond holders accepts), so it would seem anyway. Within the scope of all the debt BTU is juggling, $950,000 is simply NOT A BIG DEAL. Accordingly, this is nothing more than a tiny tiny momentary distraction issue. BTU's far bigger long term problem is pricing. Powder River coal is somewhat land locked (because of the lack of west coast exporting facilities) and is currently priced too low as well. Met coal is at terribly low prices globally. ACI, ANR, and others are going to be able to stay in the coal game for a long time. Natural gas at $4.55/Mcf is seriously hurting coal prices too. Perhaps if one steps out 2-3 years, domestic natural gas prices will move up to the $8+/Mcf range. This may happen, because all the natural gas export talk is not about helping the good old USA, but instead all about international price arbitrage so that producers can get the higher international price ($12/Mcf Europe and $16/Mcf Japan). Because about 25% of natural gas is lost in production/transit, the USA price would likely be about 70%/75% of the European price (ball park $8-$9/Mcf). Also, it is clearly possible, perhaps even likely, that there will be another recession somewhere (globally, Europe, USA, Japan, etc.). If there is another recession in the cards over the next 3 years, prices may even move down from here.

    BTU has done a nice job of pushing out their debt structure. Debt structure through Sept. 2020 is shown below:
    Nov. 2016 - $650,000,000
    Nov. 2018 - $1,518,000,000
    Sept. 2020 - $650,000,000

    IF, and that is a BIG "IF", coal prices were to move up materially from here (say by 20% or more), BTU would have a lot of leverage to the upside. I think there is plenty of time yet before it is worth buying BTU, but BTU's price will probably start moving up before better price becomes apparent to little investors like me.

  • Reply to

    BTU Convertibles ... In today's STL Post-Dispatch

    by joeschmo_4 May 31, 2014 10:58 AM dlhild May 31, 2014 7:45 PM Flag

    ST. LOUIS, May 28, 2014 /PRNewswire/ -- Peabody Energy Corporation today announced that it has begun to solicit consents from holders of its 4.75% Convertible Junior Subordinated Debentures due 2066 (the "convertible debentures") to amend the related indenture. Details regarding the proposed amendments are contained in a Current Report on Form 8-K filed today with the SEC. To adopt the proposed amendments, Peabody must obtain consents from holders of a majority in aggregate principal amount of the outstanding convertible debentures, excluding any convertible debentures owned by Peabody or any of its affiliates.

    Holders of the convertible debentures who validly consent to the proposed amendments on or prior to 5:00 p.m., New York City time, on June 10, 2014 (such date and time, as they may be extended, the "expiration time"), will be eligible to receive a consent fee of $2.50 per $1,000 principal amount of convertible debentures for which consents are received (and not validly revoked) on or prior to the expiration time. Peabody's acceptance of consents and payment of the related consent fee is conditioned upon, among other things, the receipt of sufficient consents to adopt the proposed amendments on or prior to the expiration time.

    The consent solicitation is subject to the terms and conditions set forth in the Consent Solicitation Statement dated May 28, 2014, which is being distributed to holders of the convertible debentures. Holders are urged to read the Consent Solicitation Statement carefully. Persons with questions regarding the consent solicitation should contact the solicitation agent, Morgan Stanley & Co. LLC, at (855) 483-0952. Requests for copies of the Consent Solicitation Statement and the related Consent Letter should be directed to the Tabulation and Information Agent, Global Bondholder Services Corporation, at (212) 430-3774 (collect) or toll-free at (866) 924-2200.

  • Reply to

    BTU Convertibles ... In today's STL Post-Dispatch

    by joeschmo_4 May 31, 2014 10:58 AM dlhild May 31, 2014 7:31 PM Flag

    From page F-37 of 2013 Annual report: Under the 2013 Revolver, the Company must comply with two financial covenants on a quarterly basis, which are a maximum net secured leverage ratio and a minimum interest coverage ratio. The Company was in compliance with those covenants as of December 31, 2013. The Company is permitted to pay dividends, buy and sell assets and make redemptions or repurchases of capital stock when in compliance with its financial covenants (including compliance on a pro forma basis giving effect to such transactions), subject to certain restrictions imposed by the 2013 Credit Facility. That agreement also imposes certain restrictions on the Company's ability to incur liens, incur debt, make investments (including acquisitions), engage in fundamental changes such as mergers and dissolutions, dispose of assets, change the nature of its business, enter into transactions with affiliates, enter into agreements that restrict the Company's ability to make dividends or distributions, enter into agreements with negative pledge clauses and make dividends from the top-level Gibraltar holding company of the Company's Australian operations to the Company's domestic subsidiaries in an amount in excess of $500 million per year. It also contains customary events of default. The agreement generally does not restrict the Company’s ability to provide for loans and advances between the parent company and the subsidiaries that secure or guarantee the related indebtedness, provided that certain of such loans and advances are subordinated to the Company’s obligations under the 2013 Credit Agreement.

    The above must be what the St. Louis paper was talking about.

    Would someone with access to the St Louis paper copy paste the article?

  • Morgan Stanley analysts are convinced Pres. Obama's plan for cutting carbon emissions from existing power plants will call for a greater than 17% reduction when it is unveiled early next week, meaning the impact on coal demand would be “substantial” in the long term.

    In 2009, Obama called for a 17% cut in emissions from 2005 levels by 2020; if he were to stick to that target, the industry might not feel too much pain since lower coal plant output already has cut U.S. power-sector carbon emissions by ~11% since 2005.

    NYT reported this week that Obama will use his authority to cut emissions from coal-fired power plants by up to 20%, in turn spurring the creation of a state cap-and-trade program.

  • Low stock piles, constrained rail deliveries, and lower production levels are having the strongest influence on coal demand from units relying on coal from the Powder River Basin (PRB), says the consultancy.

  • by dlhild May 28, 2014 12:21 AM Flag

    Another week and still low coal prices. There is no reason to rush this investment, plenty of time left to wait for lower prices.

  • by dlhild May 28, 2014 12:20 AM Flag

    Another week and still low coal prices. There is no reason to rush this investment, plenty of time left to wait for lower prices. BTU at $12/share sounds about right.

  • by dlhild May 27, 2014 7:23 PM Flag

    Anybody know squat about PWR?

  • Based upon my analysis, I like the company. However, I'm new to PWR so would like to hear the opinions of someone who has been following them for a while. Quality of management? Honesty of management? Where you think PWR be be in 3 years? 5 years?

  • by dlhild May 23, 2014 11:22 AM Flag

    This may take 18 months or so. ANR has $780M in debt coming due within the next 15 months. They have not extended their maturities like BTU and ACI have done. If ANR burns and crashes, then market supply/demand will result in very profitable pricing for those companies that survive. Nattie gas priced at $4.40/Mcf put downward pressure on coal prices too. Coal has a serious pricing problem for at least 1-2 years, so ANR bankruptcy is not that far fetched.

  • Drum roll, "ANR GOES BANKRUPT". This may take another 18 months though. ANR has $780M in debt coming due within the next 15 months. They have not extended their maturities like BTU and ACI have done. If ANR burns and crashes, then market supply/demand will result in very profitable pricing for BTU and more likely than not for ACI as well. As for now though, there does not seem to be any rush to buy BTU. IMO, buy below $15 later this year.

  • Buckeye's Posting:
    I'm looking at the free cash flow long term growth of the business. Besides the US, the company is expanding in Europe, Latin America and Asia.
    I'm not counting on it but a buyout at a substantial premium to today prices is possible , too especially when you look at SA's age. There have been 3 that I know of in the last 5.5 years related to hemostasis type products . The first was Ormrix Biopharmaceuticals in Dec of 2008 for $408,000,000 by JNJ. Their main products were 3 liquid based hemostasis type products that had very small sales but just got FDA approval. I think you should be aware of the other two. From my standpoint the most likely buyer would be Covidien. In 1998 way before Covidien was spun off from Tyco, Tyco bought US Surigical for 3 billion. On of the main things US Surgical does is provide all kinds of surgical staples and stapling machines. CRY's products would be a perfect fit with COV.
    Unlike dlhild, I think CRY's other products have some value but he is right that bioglue and perclot are by far the most valuable products. They contribute to the free cash flow of the business and require little capital investment. The Hero Graft and tissue businesses are also one of a kind businesses which attract some of the leading cardiovascular surgeons in the world to CRY's hemostasis products.

    My Re-Thought Response: The parts would be greater than the whole. A strategic buyer would probably be interested if it could spin off the unwanted parts to another interested party. Also, with low interest rates, a strategic buyer may actually be able to make a buy-out work for CRY shareholders, because money doesn't cost them much. So I'm not as negative right now as I was previously. At the moment, I see CRY's risk more as general market risk, and I'm not very good at predicting that.

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