Tell me exactly where CLF is not paying their interest or where any debt is due. Plus CLF is sitting on a fair amount of cash in their ATM. And again, as I have been saying day in and day out, CLF is earning money every quarter. Greece on the other hand is loosing money. Last year CLF paid down 25% of their debt, Greece increased their debt.
Think about it, $200 million buyback and almost $200 million coming in from a tax refund, I think Mr. Gonclaves knows exactly where the money is coming from and it isn't from borrowing.
There are other events that will cause a blackout such as advance knowledge of an asset sale. The legal department pulls the strings on these events. Your SEC rule lays out the number of shares that can be purchased and the time of the day they can do it. I think CLF has been on a blackout throughout this whole CCAA affair and earnings.
I see 10 million tons shipped on the Great Lakes for the first two months and project that 15 million tons will be shipped in Q2. CLF's share of that should be between 6 and 7 million tons. As a buffer, CLF ships some of their volume via rail.
Also, I think I read that CLF supplies 40% of the US iron ore, MT supplies 25% and US Steel supplies 25%. It has been a while since I read it and my memory isn't that great anymore. Nick usually has this kind of information at the top of his head. Anyway, CLF is the major producer of iron ore pellets in the US because they are the low cost producer and have a price advantage over local suppliers and importers. Because of this, CLF is actually benefiting from the low price of iron ore as it is taking the high cost operations like Magnetation off the market.
It is up to each company's legal department to establish the timing based on when the inside information is made available and how long after the information is made public. Most companies error on the side of caution and I believe it is CLF's policy to wait 2 days. I know other companies that allow employees trade stock only fort 4 weeks per quarter.
The truth is CLF is perfectly fine with their current debt position and buying back shares offers them a better return and liquidity. But they can't buy back shares until 2 days after earnings release. Until then large players that can read the income statements and are able to project estimates, they are lending all the shares shorts want to borrow, setting up a classic bear trap.
Have you notice the only people that complain about CLF's debt, never outline why it is a problem. They never show how CLF will miss interest payments. They never outline CLF's current cash liquidity which in truth can take care of all of their debt.
Based on Great Lakes shipments, I put Q2 shipments between 6 and 7 million tons. Net profit of $30 a ton puts their US operation generating $180 to $210 million in net profits. Take off $40 million interest expense and another $40 million for other expenses, you are left with $100 million in total profits.
May be worth using some of my air miles to fly to Cleveland. The key here is US iron ore is profitable. Asia Pacific and US coal are both profitable. Canada is now at zero, now and into the future. There is no place that they are losing money!
I don't see where that is needed, anyone can pull up US iron ore shipments and get a fair idea of the number of tons they shipped. The contract prices don't fluctuate that much for US pellets. Asia Pacific and US coal will both generate a little profit and Canada has been taken off the books. Since CLF does not build inventories in Q2, they will earn 50 cents a share in Q2.
Mr. Gonclaves is there for the long term investor and will act accordingly. I would be worried if CLF was operating at a loss, but I know continued profits will fix all problems.
Chinese imports to the US up .1% 2015 over 2014, don't think China is the problem but "Chinese Dumping" makes good headlines and this fabricated fear might have something to do with it. I think the current drop has more to do with manipulation of the stock by shorts or by longs trying to trap the shorts.
You actually bring up an interesting point. CLF issued those new secured bond against US iron ore holdings and currently has drawn about $900 million against them. So CLF could spin off the international division and say they take in $1 billion. With current market price of the unsecured bonds, they could buy them all back and have money left over to reduce the float of their US based company.
Maybe this has been their strategy when they decided to issue those secured bonds… only pure speculation. Maybe all will be revealed at earnings.
If CLF could sell a debt free international division for $5 a share or $1 a share for a company that comes with debt, it maybe in CLF's best interest to keep the debt and pay it off from the proceeds of the sale. We just don't have all the information and can only speculate. But one thing is clear, when Casablanca took over, they always said to sell or spin off the international holdings. Maybe the time has come for the spin off option.
If they don't transfer debt, the international company would have a very low cost and should be a valuable division. Or the international division may have to pay CLF lease payments on all operations. One thing is clear, they will get more money now than selling the mines if they can find a buyer. Too bad they sold off the chromite, it would have added more value to the international company than $27 million.
Spent a good time working statistics, just hate it when someone throws out a baseless number and make it sound like a real number.
Before I can come up with a percentage of event happening, I need to have the values associated with those variables. For example, flipping a coin I have 50% chance of one event or the other. On the iron ore price, you need to plot the price of iron ore against the stock price of CLF over a period of 6 months to a year and then you can compute the correlation of the data. Then you can come up with a percentage value of an event happening. Do the same with each of your variables and then I can calculate the probability of an event happening.
All I am saying is if it cost $1 million a month to have the mine shut down, it would be better off to keep it operating if they make $1 because in reality they are saving the company $1 million plus a a dollar.