It is too early to evaluate impact by this action. Firstly, company should try to find gold in this new area; i.e. some exploration is required and no one knows yet what kind of results it produces. If some gold is found then it will depend on specific ore parameters, e.g. grade, to decide how it could be processed.
25 km is not the end of world, both literally and technically speaking. There are gold operations transporting ore on longer distances (not much longer, in general). Hopefully, they will find gold with grade high enough to make trucking economical; using existing mill would be a big saving.
In total, this news can’t affect this stock too much. It can be said that in global terms IAG share price depends on gold price and in local terms in depends on when and how Westwood comes on line.
First of all, I kindly suggest you to wait a bit before waving your tin hat. It is very easy to get crazy trying to find logics in daily market moves. Wait for something longer than one day and, anyway, it is unfair and wrong to say that explanations (aka facts) do not exist.
For example, many articles today explain drop in copper price by “concerns about Chinese growth”. More specifically, one Chinese company declared bankruptcy today. It is not a big company and it is far from actual consumers of copper (it is in fact one of multiple defunct solar-panel developers), but it is the first case of Chapter 11 in China and press pays attention and journalists make smart faces and produce wise conclusions. Tomorrow they will talk about something else, e.g. coal or iron, also e.g. concerning about “Chinese growth”.
In meantime, LME storage numbers still point to strong copper demand. My bet is on this and imho it is based on some facts. After all, world economies continue reporting stronger numbers, i.e. better than last year. Please note that raw copper gets bought by China, but eventually it is consumed by U.S. folks. Let see how it’s going; U.S. loves to consume.
This is stock market; it is not quite amenable to precise analysis. It can be said that market is rational in long-term, while any look at any stock at any particular day could convince that it is all irrational. However, stock investors better stick to rational analysis, just because admittance and acceptance of complete irrationality could make very stupid to invest in stocks at all.
Needless to say that one should keep portfolio diversified and never over-estimate own abilities to analyze markets. Invest in many stocks in many sectors based on rational considerations; some mistakes will be inevitable, but in total good analysis will help to win this game.
Building LNG terminals and exporting gas to Europe can drive oil price there down and, the most hurtful (for Russia) part, could reduce Euro dependence on Russian gas. Needless to say, Euros sit themselves on big shale deposits that they will exploit some day, after habitual hand-wringing and moaning.
Anyway, it is all (oil factor) long-stretched considerations and, moreover, they have no impact on gold price.
Yes, SCCO seems to perform better than peers recently, though copper sector doesn’t present too many comparable stocks. FCX, VALE, TCK are not pure copper. By the way, look at PM stocks during last couple weeks. They all show huge increases, i.e. some financial institutions definitely played hand in it. It might be that SCCO got some “collateral vapor”, i.e. maybe some market players added this stock to their buying PM list, just to make it a bit more “conservative”. After all, many funds consider both precious and base metals as similar investment categories.
Anyway, numbers always look irrational in near term. They make sense in long-term only. If you look at particular stock on particular day then it is never justified 100% and, moreover, it is always possible to argue that it is not justified at all. It is good enough to have long-term goals and see long-term trends helping them. If near-term helps then it is even better. In my opinion, if someone has high designs on particular stock and this design is well justified then good near-term performance should not get questioned too much as not quite justified.
Please, excuse me that my previous message was likely too sharp regarding “personal issues”. It didn’t mean you, personally.
Firstly, rise in SCCO share price is justified by fact (in small or large caps, doesn’t matter): big decrease in LME copper storage number. This number is an objective indicator for copper supply/demand. This decrease implies that copper consumption doesn’t falter as it was speculated in some analyst comments. Sooner or later, hopefully soon enough, this situation will move copper price higher.
Secondly, SCCO was able to report solid earnings beating analyst estimates. It doesn’t happen too often. Guidance was positive, especially, long-term projections.
Thirdly, you can do whatever you like with your SCCO position. It is always good to lock on profits, though it is even more important to have own investment/trading strategy that doesn’t depend on advices solicited from Yahoo message boards. It can be also noted here that near-term market moves are hardly predictable.
Also, message board reports about personal investment achievements have very little relation to actual stock investment. Shortly speaking, discussion is productive when it goes about stocks and it becomes unproductive when it comes to personally-related notes (of any kind). Yahoo message boards are littered with winning reports. It says a lot about human nature and very little about stocks.
My dear man, you are not familiar with this company. It is an extremely conservative outfit sticking to firm rules. One of them is to buy ships using about 50% leverage; i.e. they pay 50% in cash and take the rest in debt. That's the rule. It was announced and repeated by the company many times. Love it or leave it.
It might be simpler than your considerations. Market expects big and sustainable increase in copper price. It is based on growth perspectives for world economy.
SCCO is the largest pure copper play available and it doesn’t have Indonesian problems periodically affecting FCX, or coal problems affecting TCK, etc. This stock is a pure bet on copper price and it is supported by healthy stock fundamentals; it is profitable now even with low copper price.
Why stock price is catching up to fundamentals right now? It might be just a coincidence. Fundamentals affect stock price over long-term, but it is impossible to predict exact point when stock price actually moves.
Most likely, he meant that talk about EGLE and supramax rates better belongs to EGLE message board. The same goes to talk about ORIG; it belongs to DRYS board.
Also, your message title already suggested possible problems.
Basically, I didn’t answer this question that time. It was primarily because of message board environment; sometimes, it is difficult to talk on a message board. However, I also suspected that market can answer it without my participation, i.e. market will explain why TLR is not a sound investment. Unfortunately, it’s happened exactly this way and, frankly speaking, I didn’t wish it. By the way, the main purpose of my messages was sharing my honest opinions and, hopefully, providing some help.
Anyway, this game is practically over; especially, if projecting reality to this board discussions and dreams from 2011-12 or even earlier. Btw, it was funny to read through few messages from that time. Doing that I found this thread, hence my reply.
Also, I would like to use this message to express my sympathy to old-timers here, even to those who didn’t quite show respect to my contributions. Hopefully, you made up TLR losses in other stocks and have many bright spots in your portfolio.
Good luck with your investments and even some luck with this ole TLR dog. Who knows… luck is a powerful tool.
PS: Oceans, are you still around?
How did you find out that GORO has positive cash flow? Last quarter cash flow statement, easily available on Yahoo.Finance, shows operating cash flow loss of $7M and total cash flow loss of $13M.
Jrmills, this message board saw, over long years, many hapless DRYS holders coming here to preach doom based on their collective DRYS experience. Shortly speaking, their mistake was/is that DSX is not DRYS; it is a different company.
In more specific terms, DSX difference is that its break-even point is lower than it is for most peers, DRYS including. The reason is that DSX financing costs (debt interest and repayment) are much lower. It means that DSX can make money in rate environment that is sometimes unprofitable for most other dry-bulk shippers. That’s it; no more, no less.
In even more specific terms, average DSX ship should make 9K/day to keep company positive on cash flow basis (excluding new ship purchases) and about 14K/day to have it positive on GAAP earning basis. In other words, present rate situation is still Ok for this company going forward.
It can be speculated that DSX stock got too much hot vapor in few preceding months caused by euphoria among investors. This is stock market; it is volatile. However, this company is still stable and proceeds with the most stable expansion policy: moderate buying of ships while preserving manageable balance sheet. It is a personal investor responsibility to understand this company business and financials and pick up own entry and exit points.
It seems your messages somewhat over-simplify niobium case. I didn’t read details of Niobec pre-feasibility expansion study, but still can assume that 1.6-1.8B NAV tag indicated in the press-release is based on strong niobium price as it is now. One should see that this price can be maintained only if niobium production is stable. Niobium market is very small, big expansion can easily kill it. It creates dilemma: either you continue mining Niobec on smaller scale, enjoying good, but still moderately-sized profits, or you embark on expansion risking price collapse and profit disappearance. Every potential buyer would meet the same dilemma.
For some reason Yahoo disallowed to post number for projected moly revenues. I guess Yahoo staff programmers play too much with profanity filters. The numbers was $500M. Hopefully it will be posted now (five hundred millions).
SCCO fortunes do not depend on moly. It is enough that market/economy point to strong copper price for few next years. If moly price recovers in meantime then it's even better; it will be more fun to own this stock.
Company projections for 2014 are for 672 KTon copper and 21 KTon moly, i.e. it is about $5B in copper and $M in moly revenues (didn't check moly price for a while; assume it's about $10/lb now). Copper share is much higher. Moly price recovery would be vitally important for pure independent moly producers, if any are still alive. Even ole TC still shows some breathing exclusively because it started to produce some copper.
Weak earnings? I disagree. This company is solidly profitable at the point when copper price is still low. As world economy grows up, copper price will follow; it is still at the beginning of new bullish phase and, inevitably, SCCO will reap increasing benefits.
Last month jitters were caused by approaching Chinese New Year recess; it happens every year and it always creates talk about world crisis and economic malaise. Once Chinese numbers come back to normal, after holidays, copper price will resume recovery to high 3s, likely taking this stock to high 30s.
It is impossible to make correct numerical predictions for near-term. However, LME storage number already knocks in "300" border. It shows market trend. Investing in SCCO, the purest copper play, means now investing along market trend.
You can do it yourself. Next year operating income from Niobec is expected to be in $75-90M range and capex comes at $70M. Any problems with Letwin regarding these numbers?
Comex will never default. Any talk of that is the first sign of paranoia and so it requires medical solutions.
Gold trade is not the major part of financial world, but still it plays important role in derivative trading. However, banks do not “manipulate” gold price, i.e. they don’t try to suppress it artificially (another favorite topic of paranoia-challenged individuals). Financial institutions try to make money on gold trade or, better say, in many cases they want to make money on derivative trades where gold participate. In other words, sometimes, institutions are long on gold, sometimes, they are short on gold and very often they use gold as a hedge in derivative trading. Any part of the above list doesn’t carry malicious intent.
Finally, it takes certain stretch of imagination to say that German gold doesn’t exist, stolen, etc. Again, this talk has nothing to do with stock investment; it belongs to different professional field.
Stock investment is a difficult business requiring lot of serious research. It is not a good idea to get distracted with things unrelated to stock investment, especially, conspiracies. The bottom line is that conspiracy theories hurt stock research. Current gold market presents lot of examples of big bets on poor trades resulting in big losses and those bets were too often motivated/excused by ideas of comex default, lost german gold, etc. It is all right to lose money on some trade; it is normal. However, it is not good to waste money on paranoid obsessions.
I prefer to steer away from absolutes like one used in your message: “better value play than any of the others out there.” Any assessment depends on many factors, on market conditions, first of all. Future cannot be predicted with 100% accuracy. In some market situation stock A is better than stock B, and in other conditions stock B goes ahead of stock A.
Usually, stock investors try to strike balance between safety and potential. In this respect, IAG is safer than some other gold stocks (but not safer than all of them), because it is still profitable and still has manageable balance sheet. However, one may find gold stocks more profitable now than IAG (e.g. GG or AUY) or having stronger balance sheet (e.g. EGO or AGI).
On the other hand, IAG presents upward potential (in case gold goes up) stronger than some other gold stocks (but not all of them), because IAG is leveraged to gold stronger than other mid-size producers (it has the lowest P/S ratio in the group). However, some smaller gold stocks, especially standing one foot in grave, could present much stronger upward potential if gold really goes up and you are lucky to buy it exactly at turnaround point.
In other words, “the best” stocks become known as such only after they really showed it, i.e. this definition is good for historians (just in case they decide to study stock histories) and less important for practical investment.
PS: by the way, don’t take this message in too optimistic light (or pessimistic :). If company will continue report bad news every quarter then it can bring cumulatively negative consequences.
3% market drop qualifies for a mild correction; the most normal event. Certainly, future is hazy, but getting scared by every market correction (defined #$%$10% drop in hard and 3-5% in mild variety) could put serious strain on personal investment policies. After all, it is considered, generally, a good idea to lighten portfolio a bit on local market top, before correction, and restore equity positions to fuller strength on local market bottom, after correction.
Shortly speaking, serious market crises are rare; corrections are common. Markets cannot go by straight lines; corrections are normal and they create buying opportunities.