They can take on a joint venture partner and CLF would not have to spend another dime. Also you have to realize that the mine will not be producing until 2017 at the earliest. It would not surprise me if Barrick makes a move to diversify away from gold.
A joint venture makes more sense. Miners need to diversify and CLF can make huge profits with a 50% share of the chromite project with no more investments into it.
They make their clients tons of money by keeping a stock artificially low.
I have been working on my house to get it done before Christmas, just got in at 6 PM… Enjoy that turkey short you picked up at $20.80, I hope your sheep followers didn't bite the wool on that one.
I said earlier that if CLF announced a new CEO before Q3 earnings, there would be no take over. However, with the suspension of the chromite project, I am think at least we may be looking at some type of joint venture. Also, I am still waiting for those replacements for the VP's that left.
Yes! They basically reduced the cost of the chromite project by $800 million and reduced the time between expenditures and revenue by a year and a half. Simply wait until the road is in and move the equipment in.
They are not pulling out of the Chromite Project, they just are not going to pay for the transportation infrastructure. Once Ontario builds the roads and rail, then CLF will develop the mines.
I think CLF came under the realization that if they put the transportation system in, Ontario would have socialized it and CLF would not be able to collect a dime from the other miners that would be using the system. But if CLF could control and charge for the use, $800 million would be a small price to pay for the amount they would have collected over30 years. CLF is making the right move and should be rewarded for it.
Have always been the slow time of the year for real estate sales as people have moved prior to school starting and then the holidays. Housing and builder sentiment will pick up after the first of the year as corporate transfers start kicking in. The only thing to watch out for is any sign of Fed tapering which will be negative to the builders in the short run as buyers will continue to buy as interest rates tick up off these record low levels and the market will discover economic strength outweighs the effects of tapering.
2025, really? Based on 5% growth of the auto industry per year, the number of cars produced will be double what they are today which will keep the demand for steel more, even with the greater use of lighter materials. Do you really think we live in a static environment?
I posted a reply before I headed out this morning, must not have hit the right button.
There is 1800 pounds of steel in the average US car and at current levels the US produces close to 16 million cars a year. That gives us about 14 million tons of steel a year. Since it takes 1.5 tons of iron ore to produce a ton of steel, that means the auto industry generates demand for 21 million tons of iron ore.
The sad thing is all of this information was out on Nov 8 with Ontario, First Nations and Canada forming a transportation development agreement. One could see that CLF no longer needed to be involved and therefore needs only to wait for the government to act. Again, just a market overreaction to a short driven media blitz without telling the whole story. And CLF is playing a poker hand with these agencies and can't come out into the media and show their hand.
Today was a great day to buy CLF as we won't see it under $26 again.
1. Ring of Fire project going according to plan, which is to get Ontario to pay for the transportation infrastructure.
2. Spot iron ore holding above $135.
3. Iron ore futures for 2014 holding above $150.
4. Japan is suspending greenhouse gas reductions which will lead for other Asian countries to follow, will be good for met and thermal coal.
5. US auto production at all time highs.
6. China GDP may come in over 8%.
7. CLF is going to earn over $3 for 2013.
8. CLF will not have to invest $800 million into transportation infrastructure, can continue to pay down debt and build cash.
This is a great 4 part article about the chromite project, this move to put the investment in transportation infrastructure has been in the works well before CLF announced the suspension.
If CLF was playing the game, it is clear they would win. The strategy they are employing to move forward on the Ring of Fire is to make it appear that they are not moving forward to get the government to step up to build the required infrastructure. Soon the investment community will realize this and all this media hype will be put behind us. Today is a gift to the shorts to cover.
Ontario and First Nations are going to make money on this deal. Not only the taxes Ontario will collect but the royalties First Nation will receive. Plus, when the government goes ahead with the transportation systems, you can bet they will collect a toll on the mining traffic which is completely fair. If CLF would have got the easements and gone forward with the transportation system, they would have lost their investment when the government took control of it. The real blessing here is the courts denying the easements.