Scup- Regarding AISC for each of EXK's operating mines. From the companies website. 2015 AISC for Guanacevo was $12-13, Bolanitos $10-11 and El Cubo $17-18. While El Cubo's costs were trending down, it appears that it's taking more time than management expected. Thinking back a year or so, I expected El Cubo to be the lowest cost producer by this time. The capex to get the job done was expended but the results appear to be lagging. Still, the promise remains.
Sentiment: Strong Buy
scup - For the first nine months of 2015 the AISC were $15.09. The Guanacevi mine had the lowest cost followed by Bolanitos with El Cubo bringing up the rear. El Cubo's costs are coming down but it's development has been a challenge to management.
Scup- There are significant costs involved in placing a mine on care and maintenance. With that in mind, I would GUESS that metal prices above AISC could cause management to reconsider.
gh0613- Good news if it comes to fruition. Indicates that management is pro actively managing the company to assure survival in these difficult times.
It appears that you are one of few that hasn't completely given up on management.
After you're through busting chops, get back to the camp fire. They are about to begin your favorite activity, the Circle Jerk
Sentiment: Strong Buy
Were any of you guys and gals long in 2008 when NM was being seriously spanked? Was the news, sentiment and longs as negative then as they appear to be today? Was there talk of imminent bankruptcy then as now? What are the chances that this is a Blood in the Street opportunity? From the posts, it appears that a majority of the longs have sold or are in the process of selling. I would have thought that most longs that hadn't sold by now had already made the decision in their mind, not to sell at any level.
There may be a solution to resolving this problem of overcapacity very quickly if every lessor cold stacked 20% of their fleet rather than leasing at or below opex. This action would remove the over supply and the revenues lost on the cold stacked would be more than compensated for by the rising rates that would result in a balanced market. Instead, each will wait for the other to cut, in the mean time, they all circle the bowl.
Not rocket science, just supply and demand. Same applies to oil, cut ten per cent and a one hundred plus per cent rise in oil prices. Not happening because each is waiting for the other.
Joey- In attempting to resolve the imbalance problem the lessors have to consider all the ramifications. For the sake of discussion let's assume that all of the lessors cold stacked 20% of their fleet instead of leasing them out below opex.. If this were done there wouldn't be too many ships chasing to little freight. The remaining 80% could be leased at significantly higher prices, more than offsetting the revenues lost on the cold stacked ships.
The same is true with oil prices. If all the oil producers agree to cut production by 10% demand would outstrip production and the over supply would be gone in less than a month. Just the announcement would cause oil to rise more than 10 %, likely more like 100% and more by the time the cut was implemented.
Sounds too simple a solution, it's not rocket science, it's supply and demand. Why it isn't done is because each is waiting for the other to cut, in the meantime, they all circle the bowl.
Sleepingoneoff - Why the heck are you spending so much time posting on this board? You've been correctly bearish so it only stands to reason that you've made a ton of money on your short position. Why not take some time off and enjoy yourself. Take a vacation on we longs. Tip large, it's on us. While you would be missed, we would probably make it through the day.
Regarding Seeking Alpha, when they were bullish, you dismissed them, when they become bearish, you embrace them. No surprise there, you're always mining for negative news. No problem with hearing from the bears but it is problematic when falsehoods are mixed with facts. Good liars mix a kernel of truth with the lie. You my friend are a good liar. No animosity meant, you're still a smart guy.
Mize- In your opinion, does the suspension of the dividend on NMM make it less or more likely that the dividend on the prefferd's will be suspended going forward? I realize that the dividends will be accrued, thus payable in the future, but in the short term, they'll have the cash on hand. What are your thoughts on the possibility? I ask because AF no longer seems committed to dividends.
Pvg323- Sorry for your loss. If you have to told by others when to buy or sell, perhaps you should act on your own thoughts and purchase mutual funds. Here's the thing, other than the share price, what has changed since you went long? Fundamentally, not much if anything. This was a skosh under $20 stock less than two years ago. You averaged in under $1.75 according to your post. When you purchased, did you not consider that the share price could go lower?
Patient objective investor- Kudos to you on your excellent informative post. I stand corrected regarding the company not being interested in repurchasing shares. A $750 million share buy back is a huge commitment, by anyone's standard.
I apologize to you and this board for posting information that was based on old information, 2008-2013. I've been away from his space for a couple of years and should have done my homework before commenting.
Goldbed- Unfortunately, you're right regarding good earnings not staunching the bleeding. However, that doesn't detract from the importance of being able to earn money in the oil patch. Cash is king because of debt demands and the drying up of financing, so those earnings while not helping the share price, help in survivability until oil turns upward. While now may not be the time, I would like to see management buy back some of the $7 shares they sold. While I've had a distrust of management in the past, I did like the debt repurchase at a discount and the push out of the Santorini. In the meantime, we get to enjoy the burn brought on by the declining share price.
Looking at the situation objectively, if that is possible. July 2014, the share price topped out at a skosh under $20. This was brought on by the over supply of oil combined with the thought that OPEC would not reduce production and that this would lead to a further decline in the price of oil. Over the ensuing year and a half, that is exactly what happened, thus, the $1.15 share price. Currently, there is talk that the Saudi's never thought that oil would trade as low as it did and there are some signs that they may be willing to work with other producers but want to see some sort of commitment that others are willing to reduce production to attain market balance. At this point in time it's all talk so it may or may not happen. Should an agreement be reached the price of oil will react quickly.
ORIG specific. We're solid for 2016 and OK for 2017, beyond that we're at the mercy of the debt holders and price of oil. While no one can say, with certainty, what the price of oil will be in the future, it has always recovered in the past. Agreed, I have been stating that over the past year and the price is still down but we may be seeing the semblance of some green shoots. Currently, the downside is $1, the upside $10 or more. It is very likely that those, myself included, that purchased at significantly higher prices have already decided to ride it to the end.
Riskonriskoff - Make that $1.32 billion and trading at .74 book value. While this company was always one of the best managed within the sector, I never purchased shares because management never seemed to value shareholder enhancement but focused on growth. Unlike their peers, they wouldn't pay a dividend and did little in the way of share repurchasing. A $100 million buy back, while affordable is unlikely.
You wait for the cream to come to the top and it will. You've been involved in this sector for a long time, so you're familiar with the under valuation by the market from time to time. If I recall correctly, you were one of the posters on the aer, gls, ayr and fly boards back n 08-09 when the entire sector was severely spanked. There was no cause for the spanking then and there isn't one now.
Software- You may be on to something. Agreed, there is no glut at this time leasing airlines but there is a monumental over supply in the shipping sector and the oil drillers. A part of the problem is that orders placed in good times don't get delivered until 2-3 years later. During the interim, demand may slacken and the demand isn't there when the new builds are delivered. For whatever reason, CEO's seem to have a problem picking up on this. While the airplane leasing companies have been spanked over the past year, the shippers and drillers have been decimated (90-95%) . We may have a baby thrown out with the bath water situation.
On March 2nd, 2009 this stock traded as low as $1,95, down from the mid $20 area the previous year. At that time it was a significantly smaller well run company. Like today, the entire sector was out of favor despite a 95 per cent utilization rate and very good earnings. A huge difference, then and now, was that oil was trading close to $150 a barrel and many thought that the airlines would go broke, they didn't. Today airlines are flushed with cash. The point I'm trying to make is that at times, perception trumps reality, especially when the fear mongers get in gear.
Scrap the oldest and continue scrapping until and demand is balanced. Every shipper is waiting for the other guy to scrap. In the meantime, the new builds are still arriving. Ships have less value than scrap iron when the can't be leased , no cost In maintaining scrap iron. This imbalance will never self correct, too many ships chasing too little freight.