In my construction business, I have two choices. 1. Finance my construction projects and pay 5% or 2. Take on a joint venture partner and pay out 50% of my profits. On my last spec project I made $120,000 profit after paying out $22,000 in financing cost. If I took on a joint venture partner, I would have made $71,000. I was lol all the way to the bank.
I think what everyone is missing is that the demand for steel is increasing as GDP's around the world are improving. You are concentrating on the supply side of the equation, not the demand.
It would be interesting to see the activity of the day trading shorts.
Do you realize how much direct money goes into the local economy from a single home sale? It is 10% of the sale price of the home, it comes from commissions, fees and taxes. Indirect money from furniture, appliances and other home improvement touches adds another 5%.
Of all the homes sold, 75% are existing, 20% are new and the remaining 5% are custom contracts. So 10% of the shear number of existing homes sold generate more money to the communities.
I heard that on CNBC and had the same response… so I bought some more. Something is not right here, the 400,000 shares traded which based on the price action I have to assume it was a large short sale, was a way to make a quick profit on a lower cover.
Mineral rights are worth what is in the ground. CLF spent $350 million on their mineral rights which currently is worth about the same. Once the transportation infrastructure plan is finalized, the value of these rights will more than triple.
Now CLF has spent an additional $150 million to develop their holdings, but these are expenses they write off against earnings. This is not eligible for accelerated mark to market write down. On the other hand, the $350 million on the asset purchase is. But you need to establish the market value of the asset and based on the latest mineral right sales, the market value is close to what CLF paid.
I suggest you read the IRS requirements for goodwill impairment charges.
From Oye Times:
"Source have revealed that both the provincial government of Ontario and the federal government of Canada are working on their differences over the Ring of Fire, as both Premier Kathleen Wynne and Prime Minister Stephen Harper hald a one-on-one meeting on Parliament Hill on Thursday afternoon. The pair allegedly discussed issues including ambitious plans to develop Northern Ontario resources.
In its previous proposals, the province had asked the federal government to contribute financially in the infrastructure, including a road or rail line, to develop the Ring of Fire, an area 500 kilometres north of Thunder Bay that contains an estimated $60-billion in minerals. According to the plans of Ontario, it intends to develop a corporation with representatives from industry, three levels of government and First Nations to oversee construction. An email authored by the spokesperson of the Prime Minister Stephen Harper, Jason MacDonald, revealed that two leaders had a “productive, constructive discussion.” He stated that “they both agreed that the two levels of government will continue to collaborate on this important development.” Additionally, the email revealed that “they also agreed that any investments by either level of government must represent a public benefit, including for First Nations.”
On the other hand, a source close to the Ontario government confirmed that Mr. Harper was open to the idea of developing a corporation, while he agreed on the importance of infrastructure in the area. It was added that the Premier felt more optimistic after the meeting than she did going in."
The Government is moving forward, just took CLF suspending operations to get them rolling.
Agree, but take a look at all the other miners on how they are trading in relation to their book value. CLF could move to their current book value and still be selling for less than most of the others. FCX for example is selling for around 1.7 times book.
Go to Morningstar, pull their bonds up. Go to CLF's income statements, pull the amount they are paying down debt. Then add the numbers, quite simple.
Reality: I have shown CLF's debt schedule and it is completely manageable and will be paid off ahead of maturity. I have shown CLF is earning money, even though a large non cash impairment charge shows a loss in 2012. I have shown how CLF was going to build cash throughout 2013 by using the tax savings from the impairment charges they took in 2012. When everyone said China was going down, I was there saying it was all smoke and mirrors and that you need to pay attention to what they do, not what they say. And how China uses iron ore stock piles to control prices.
What is left to prove? It is these totally misguided iron ore projections. First of all, no one can tell with any level of certainity where the prices of a commodity is going to be 6 months from now, let alone 2 years out. But this is the only thing the shorts can grab hold of and float out the fear iron ore is going to $80. The trouble is they base it on unrealistic growth projections. This is a classic case of molding the projections to match you desired results!
US jobs came in up 203,000, at the top of the "sweet spot" where it is good, but not so high to push to a Dec taper. Now that the number is out, iron ore should continue its climb next week.
I don't see iron ore below its current level of $135 in 2014, matter of fact I see it rising from here. Too much Chinese expansion and money coming out of US banks that have been sitting on their balance sheets as interest rates rise. When the analyst were saying iron ore was going to $80 in 2013, I was the one saying they were not seeing China for what it is and iron ore was going to hold above $120.
The chromite holdings are worth more than $500 million today, once Ontario builds the transportation system, their holdings will be worth $1.5 billion as they sit now. Yes, they have spent money on the chromite project, but they can't write the asset down below market value just because they have spent money on it. They can write off their expenses and depreciate their holdings, but to accelerate their expenses, they have to meet strict accounting requirements.
On the buyback, I am not arguing for it, just arguing for the company to take appropriate action against this targeting short selling against the company. LVS was losing money, they took on the shorts and turned the company around. It should be easier for CLF, they are actually making money.
Agreed, but CLF could show some confidence that iron ore is headed in the right direction. They could announce a buy back at these levels and as the stock moves higher, they could easily sell the shares back into the market with little fanfare and pocket the profit. A stock that has such a large short position, the company can use it to their advantage. It is like they feel that all they have to do is run a mining company, if that is the case, they need to be a private corporation.
QE is not getting beyond the balance sheets of the banks. Stop QE, interest rates will rise slightly and banks will increase lending that will get out into the economy. That economic activity will drive materials higher and inflation will pick up as the money the Fed has created earlier finally gets out into the economy.
With the US GDP coming in up 3.6, that should push iron ore over $140. And Friday's job numbers may come in over 250,000. Good news will out weigh any fears about tapering.
No need to BYOB, we have more drive through liquor stores than fast food places. Plus, I have a fully stocked bar as booze is cheaper than milk. After we have a few, we can use my air rifle to shoot quail. Only after a few drinks as it lowers the likelihood you will hit one. But that is OK, the 12 years I spent in NC taught me how to BBQ and make the best Carolina burgers and I still have a huge supply of Carolina hickory.
Only_de_troof, I am building in the foothills of the Sierras and my camera is full of deer pictures. Just yesterday a stopped my truck for a 3 point (6 point in the East) eating sage along the road. I had to whistle to get him to look up so I could get a better picture. I have another picture of a buck with 18 points, just wish I could post them here. We also have bear and mountain lions that pass by the back of our house. Then there are the golden eagles. We can't let our cat roam outside!