Doesn't seem to be publically available because the average analyst estimate for 2015 earnings is 17 cents. If TC produces and sells 8 million pounds of moly at a $8 cost in 2015 for an average price of just $13 per pound, they will have $40 million in earnings from just the TC moly mine in 2015. That is 17 cents per share right there (using 225m shares).
If we asked investor relations, do you think they would tell us how much mayo is left on the sides and bottom of the moly jar? Would it be a figure they know now?
If I could be reasonably sure they would have moly through Q3 2015 to run in their mill, I would load the boat at this price level even more than the 52k shares.
I think you are correct and they have and will process 5m tons or so of lower grade moly in the first half of 2015. They have employees that have to be doing something and stripping phase 8 wouldn't start Jan 2015. 5m tons x 2200 pounds x 0.0008 (lower grade) = 8.8m pounds of moly from TC alone in 2015. Figure that costs $8 a pound, and you have over $40m profit at $13 moly. At $15 moly you have 60m profit. That is enough profit to easily pay for beer and the first half of phase 8 stripping.
I bet they scratch up more than even you or I believe possible. If they really are moving ahead with phase 8 while publicly stating they haven't officially changed the C&M provisions, I bet they are looking over all sections of phase 7 where they can scratch a few million more pounds here and there. If TC could scrounge up just 8 million pounds in 2015 at $7 a pound and Endako produces the usual screw up 8 million pounds at $10 a pound, 2015 earnings will be better than $0.17 overall, aside from accounting games. Thanks for the in depth analysis, gives me warm and fuzzies long term. Still think we get bought out before all of this can happen, but if not this will be a great long term investment.
Keep half your stock and sell half as calls. This way it is like you are getting a 2.5% dividend every month on all of your shares (0.15 is 5% of $3 but you only get it for half your total shares). Name another stock that pays 2.5% dividend per month!
Reality is more like $0.35 to $0.45 for 2015 as MM goes to 90% to 100% of design capacity and TC/Endako still processes 15 million pounds or so of moly from stockpile and phase 8 post strip in 3rd, 4th quarter 2015.
At $3.20 copper, $1300 gold, $13 moly this would be easy to achieve ($0.35 earnings). Higher moly and copper, make it closer to $0.40 or even higher.
$0.30 x 225m shares is $79m added to the cash stash.
2016 with similar metal prices and phase 8 running full bore, and $0.50 to $0.60 earnings possible.
A little more than 2 years from now it would be pretty easy to have $400m in the bank and earnings of $0.60 a share, which would be PE 5 at our $3 price. With that amount of cash and earnings, financing debt at 6% would be cake.
1) You end up paying too much if you are the acquiring company and you wait for everything to be 100% rosy. Right now you might get a majority of shareholders to agree to a $6 to $8 buyout but if TC is trading for $5 with $350m in the bank, moly at $15 and phase 8 approved, you are not buying the company for under $12.
2) The debt is much easier to reduce for an acquiring company because of clauses in the debt contracts.
That was prime market manipulation.
Ok, that makes sense. They want the correct figures for the tMED share dilution update.
Light said famously Microsoft would not buy Nokia's phone unit. Light was very adamant about this and even sold most of his Nokia at $4.
B) Waiting for some final numbers
C) Company in buyout talks and they just don't care to spend time on something that will be irrelevant.
So it doesn't seem to be a great hedge but it isn't horrible either. Sort of like bonds are today...when you factor in inflation, short and medium term bonds pay negative real yield.
I am still here. Still have 52,000 shares. A bit disappointed that everyone raised the price target on TC since a 300% beat would have been really nice. My 9000 options are at $2 strike for Jan 2015 expiration. I purchased some at $1.05 and some at $0.85. Not too concerned about them.
With MM going cash flow positive including interest payments this year and moly holding at $13 (maybe going higher again soon), the downside to my 52,000 shares is about $2.40 area. The upside is $3.20+ near term. My cost is very low, in the $2.60 range for average if you don't count the option selling and trading I did over the past year.
The only crying I am doing is from selling some Gilead call options too early. I made a few tens of thousands of dollars but they have gone up 400% since I sold (in one month time!).
I remember buying scrap copper at a buck a pound in the 1990s, so $3 *looks* like inflation to me.
But metals depend on lots of factors, as everything else does too. Artwork is probably the best inflation hedge of recent....the high end stuff like Picasso. Hard to make change though from a Picasso when all you want is a foot long with onions and a root beer.
I read this first as "they should r9oast Endako" and was about to give you 3 thumbs up! :-p
500m to upgrade the mill and it only produces 8m pounds a year of high cost moly...
I don't follow the benefit of this trade gtstock.
If TC is less than $3, you will have to buy shares at $3 (no gain over just buying the shares now)
If TC is equal to $3 at Jan 2016 your puts and calls expire worthless but since you had to have $3 per share cash tied up in the account you might as well have owned the common
If TC is greater than $3 your sold puts expire worthless and your calls are worth something, but then again, if you had just bought shares at $3 (well, $2.79 today) you would have the same profit with the same tie up of money.
The only advantage I see is paying more money to your broker for options over stock.