US Steel laid out the perfect roadmap, CLF just needs to follow it.
These miners need to get involved with companies that mine and process value added products like iron ore pellets and supplying local markets. Just digging or pumping stuff out of the ground is not the future. The business model that CLF is head to if the future of mining.
And they ran over one of their own cheerleaders! At least the Ducks know how to treat their women although some of them like to smoke pot.
Plus they have a fair exposure to oil that is killing them. TCK is getting hit as well as they have exposure to high cost oil sands in Canada.
I agree, there is too much positive news coming out with earnings and CLF will be free of the quite period. Shorts will be covering ahead of Feb 2. Right now they are controlling their volumes.
The reason is simple, they sold off land assets during the downturn and now have to buy more expensive land. Whereas PHM wrote down their land assets and held onto them which maintains their current higher margins. But yet the market takes down the winners because of the problems of a single builder that made the wrong choices 5 years ago.
In the future the headlines are going to read, "China supplies steel manufacturers with iron ore pellets made from their domestic supplies of low grade iron ore".
BHP and RIO have been trying to stop this move by flooding the market, but transportation cost and environmental concerns will take out the 62% fines.
Day traders and shorts are trying to squeeze every dime they can prior to the next news release. Shorts can drive the stock down when the order book is narrow, but by 10:30 the order book fills up and the lose their ability to drive the stock down. Day traders tend to lock in profits at 20 cent gains where many got into CLF this morning at $7.40 and is why it took a while to get through the $7.60 price. This pattern works about 60% of the time comes apart with news.
We had some short selling manipulation first thing this morning and then the main players covered. Then with the 30 cent swing in the price, day traders are taking profits with the volume falling off. Need to see how the stock performs after 10:30.
It could go down to $20 and HK gets over $80 for the rest of 2015. I don't see anything falling, in this case HK has locked in the price of oil into 2017.
I have not seen the balance sheet or income statement for the BL subsidiary so I can't tell exactly how much the subsidiary owes the parent company. But if I were to guess, the parent company has put in over $4 billion into BL and to date, BL has contributed about $1 billion to the parent company which leaves $3 billion still owed. So if the parent company submits a $3 billion claim and the total amount of claims is $4 billion, then CLF will get 75% of any proceeds from the liquidation of BL assets. Now, if the parent company owns the BL assets and secured the loan to the subsidiary, those secured claims will be paid before the unsecured claims. All of this has to be decided by the courts, but worse case for CLF is that they will get somewhere close to 75% of the liquidation price and not have any future liabilities from the subsidiary.
As I mentioned before, the Bloom Lake Railway is a separate subsidiary which is not part of the bankruptcy. Whoever buys the mine will need this rail system and CLF should be able to sell it for more than they get out of the mine.
Also, I have been watching bond prices and purchases which shows some large purchases since the announcement of the coal mine sale, I think CLF used some of their credit line to get out ahead of the purchases of the 2040 bonds.
LG said he was going to use the money off the coal mine sale to pay down debt. The only debt they have is long term bonds. Since they don't have to announce borrowing money to buy back bonds, they are free to use cash to buy them in the open market. Anyone can do it, just that CLF will have to disclose those purchases when the report Q4.