I read that earlier and just cringed. In particular "That will just not work with the major producer that sits in Brazil and holds about 80% of the market share". You couldn't make this stuff up...... It would be way too far fetched for television!
David Haughton of BMO Capital Markets commented in a research note that as of June 30 Iamgold's net debt stood at about US$520 million and noted that "the proceeds from a sale of Niobec could potentially be used to partially repay outstanding debt."
As far as I was concerned, the niobium was worth the entire market cap of the company (at 4/s). It still is but we now know that it is being given away for "around" $500M (net of taxes, whatever the rate is....). If you were struggling to entice a private buyer, why wouldn't you spin it off in an IPO.... I'm done. Some investors bet on the CEO rather than the company (think Mark Hurd, Google, Gates etc). A lot of money could have been made on the short side betting against Letwin.
Earnings call transcript - Steve Letwin - President, Chief Executive Officer, Director
The end of life is at least eight years to 10 years out. So we are not approaching it, but I think what you are talking about is our view of potentially going to block caving it at some point to extend the life of mine. And what we have been able to do and Carol can talk to this and Gord can talk to this more comprehensively, but the good news at Niobec is that as we work through this and focused on capital reduction, it looks like we are going to be able to extend the mine life out towards that 20 year mark and spend far less capital. And this is extremely attractive obviously for us right now. But Carol, maybe you could speak a little more to it.
It gets better "With Niobec continuing to demonstrate operational excellence, we raised guidance for both niobium production and operating margins".
More from the last earnings report: World steel production in the second quarter 2014 was 2.5% higher than the same period a year ago due to increasing production in North America, the Middle East and China.
If Niobec was a company on its own, with these numbers, it would have gone from a 500M company to 750M. There are very few companies in the materials sector producting growth and margin improvements like that. Seriously, what is Letwin's problem.....
• Niobium production for the second quarter 2014 was 1.4 million kilograms, up 17% from the same quarter in 2013.
• The operating margin1 in the second quarter 2014 was $18 per kilogram, up 6% from the same prior year period. The increase in operating margin reflects sustainable cost saving initiatives implemented in 2013 and higher production related to the optimization of mill performance.
• As the result of strong performance in the first half of the year, we are increasing our 2014 production guidance from a range of 4.7 to 5.1 million kilograms of niobium to 5.2 to 5.5 million kilograms of niobium and our operating margins1 from a range of $15 to $17 a kilogram to $17 to $19 a kilogram
Let me try to get this straight..... On the recent earnings conference call, we were told that Niobec is doing tremendously well (I bought more shares on that news) then in this statement Letwin tells the world that "the niobium market hasn’t grown like we forecast". Try telling that to X stockholders who have seen their shares triple in just over a year while IAG continues to bleed.....
A CEO from one of the Majors said exactly that at the Denver conference (or somewhere) the other day. He said that he thinks the sector is still in denial.... I don't disagree, I just consider IAG to be trading at a fair price, considering the niobium hedge they have.. Just bought a few more shares at 3.25.
Do you know if they've been buying back shares this Q? Analysts est. for this Q are .67 Whether they beat may depend on whether they bought back shares.... Whether they meet, beat or miss, after the next earnings report I expect revenues to decrease considerably.
It's not just US, it's every central bank. ECB and PBOC reported that much of the recent billions in QE didn't get loaned out. Now rates are rising and US QE is ending (pushing rates higher). The middle class is completely tapped out. I think the FED will get desperate when they see the next batch of economic data (housing starts down 14% reported today). They will have to save face by sticking to their guns (ending QE) but as we dip into recession (I think that's almost a certainainty now - this winter is expected to be another brutally cold one) the printing press will be out again. I think they will know that it will have only a tiny effect (buying UST and MBS to bring down rates again) but perhaps government will give the $ from the UST sales to the public next time around in the form of tax credits..... The only thing I am sure about is the need for US to create inflation. TPTB, absolutely will not allow deflation and I can't blame them for being so scared of it. If you were in debt up to your eyeballs with fixed interest loans, your financial mortality would be immediately brought into question. Wouldn't suprise me in the slightest if, during the next recession, checks for several thousand dollars start arriving in the mail. Of course, that will not work either. The majority of it will be used to pay down debt (as it was last time under GWB) but the FED seems to realize that they get about 20 cents benefit for every buck they print in terms of GDP and yet they still do it!
Gold will have another time in the sun. It's quite inevitable!
Agreed. I have been short for a couple of months. Increased that position today although the Q may have good headline numbers and there may be a new high a few % above where the pps is now. Another short of mine is TPX. Take a look at that and let me know your thoughts. Thx.
I still don't think they will change the language in their statement this week but it has become apparent that the banks have gained as much benefit as they could have possibly hoped for over the past few years. They have sucked the consumer dry with lower interest loans and they have sucked many mom and pops back in to the stock market. The profits made on the back of ZIRP and QE have also enabled the banks to pay billions to the government in fines over the past few years. Current fed policy has served its purpose (as far as the banks are concerned) and now, it is in the interest of the banks for interest rates to rise. The top 3 banks estimate that they will make an average of 3B/year for every 1% increase in the fed funds rate, going forward.
All along, I anticipated that we would experience a period of deflation or disinflation, before the fed embarks on another bout of QE (after this one ends) so I'm ready for some short term pain if it arrives in the from of gold making a new low. However, I anticipate the US embarking on QE4EVR when we head back into recession.
Well, I have my final open order in at 3.31...... Not looking good for POG right now but I'm guessing the fed will not switch the language to something more hawkish, as the MSM is predicting.