Am I missing something with AIM? Admittedly it
makes no difference to me, but what are companies doing awarding themselves 4%+
of the company based on??? Tower
Resources PLC Grant of Options and Exercise of Warrants Only 75M
shares at the placing price from Tower
Resources PLC Placing, Acquisition and Preliminary Results from the
week before. Where else in the world can you get the ability to buy stock at
last week’s prices? It would appear the board room of Tower Resources is one of
those places!
The company wants to be very careful, as its these
sort of things shareholders are looking at. Imagine if the placees were
told...we've got a brilliant company that needs cash, are you interested? Were
they at any stage informed that a significant percentage of those monies would
be diluted to award "options." to Directors. The event is so material
of the mind-set of the company parties would be wise to flip the stock and go elsewhere.
So back to the markets: BHP Billiton's results are obviously bullish with the 10% headline increase in
production.
So the race is on to force companies out of the
market place not only with Iron Ore but Coal as well, with an additional 2Mt's
hitting the market despite it being so dire. The fittest companies will
survive, but certainly not those overwhelmed with debt. Copper increasing and I
suspect revised guidance upwards is on its way with expansion plans. With RIO
and BLT's dividend one would be wise to hold them in a long portfolio.
BLT's news bodes well for RIO (as they weren't as
bullish as BLT in their announcement yesterday). In addition to the news from
Mongolia that things are progressing at Rio’s
Turquoise Hill Says Parties to Seek OT Funding Extension is the
Government finally giving clarity on Royalty, Taxes and the like. Turquoise can
then be taken out by Rio, the 1700 workers reemployed and everyone's happy in
the bliss that is Oyu Tolgoi. We knew back in March that AMEC were
advertising for workers, so one assumes this process is further along than the
press realise?
We all must welcome Polypipe (PLP) to the market
with Admission
to Trading on the London Stock Exchange. Will the founders/PE backers run
to the door quickly? A quick look over the market shoulder at the Appliance
Online (AO.) share price is positive for me. Will they have to change their
name to "Insurance Online?"
So with Fresnillo and Hochschild's announcing
yesterday would you be holding silver stocks long? We have Fresnillo coming
out with production inline however its higher cost sector friend Hochschild's
results yesterday don't elude to much in the way of any positives nor is there
much commentary of the Silver Price down 20% on average over the last 12
months, costs will be key and HOC are now limited in their savings.
HOC announced in March that their costs were
around $18.6 per ounce and that was during a year of "savings/costs
focus", with the current silver price not leaving much headroom and after
the $27+M annualised interest costs on their Senior Notes, there's little left
for shareholders. If you're in profit at HOC, you'd be wise to sell up or
switch to FRES with costs around the $5.6 per ounce all in, significantly
better than HOC.
Now who'd have thought Tesco would have been
cooking on gas today? Would you have been short going into results final
results. Tesco have some relief, but it takes no rocket science to realise
the three companies have to transform their pricing perception and offerings in
light of significant competition. Asda clearly are winning, albeit all appear
to be losing between 4-6% of their turnover to the lower priced offerings of
Aldi and Lidl.
The final thought for the day goes to Central
Asian Metals 2013
Full Year Results, with 100% of the Kounrad Copper
Mine income being attributable from now going forth, the earnings are set
to benefit further. With 9 pence per share final dividend, there are not many
around AIM doing what they say! The costs per pound are spot on, albeit I see
some increase in these going forward at around 5%, the dividend coverage is
more than affordable. Currently in at a fully inclusive cost in Kazakhstan is
$1.13/lb albeit last year was $0.98/lb (2012).
Atb Fraser
