Morning Mumble: What BHP Billiton finally admits, Iofina (The placing is afoot?) and...KEFI +SXX holders incompetence. (Edited from BLT to BHP)

Good Morning,

BHP Billiton (BLT) come out with their 'half decent' 9 months review to 31st March 2015. All the figures are bang in line, even the rig count down from 25 to 17. Interestingly, BLT have elected to slow the growth to 290 MT at a lower cost. Some sensible actions by BLT whom now admit they are tapering back their growth (in the short-term). 

With Short32 (South32) coming to market, they confirm the pricing of the five year A$1.0 billion note issue under its Australian Medium Term Note Program. Interest payable by South32 is a 'not so bad' 3%, maturer in March 2020. Overall, BLT is nothing to get excited about with the current commodity cycle and their respective prices. If one was looking very long-term, BLT could just be the sensible play over time. 

Expect a push or placing from Iofina by finnCap whom were appointed today, suspicions of the latter would be warranted the latter. With various muppets keeping an eye on SQM and the corruption issues, one would be wise to ignore the noise and look at the price of Iodine including the reduction in shale activity. More recently IOF's  production update confirmed what was known. 

With a reduction in water flow the obvious doesn't need pointing out. Obviously there's some hope pinned on the water permit (No. 40S 30066181), so expect some volatility up to the 6th June 2015, plus the usual over-expectation. Having had ones money both and then down, one will stop short of calling Iofina the 'Grand Old Duke of York.' With the change in NOMAD/Broker, IOF have a risk of a placing, when were those repayments due? 2017? 

Kefi (KEFI) announced the independently updated Ore Reserve. Without going in to too fine a detail, one would be wise to check KEFI's price assumptions. Kefi's price assumption of $1250 isn't that great when you look at the returns. Its viable, but why not model at a discount to the current rate to show viability? Well, we know the answer, at near $1k/oz the returns are near zero, admittedly the $1K/oz. base case is unlikely but 'even' so there's simply better projects out there. 

Kefi suggest an all in cash cost of near $913/oz (although I haven't double checked this), there's little room for error and an IRR of a paltry 22.7%. based on a gold price of a not so unachievable $1250/oz (4% above today). Once board costs etc...are factored in, plus financing and interest payments...there's value to be had but just don't get too excited as production is 2017 H2! 

KEFI could perhaps achieve more by selling the asset, although admittedly they can't keep spin those plates without cashflow. Perhaps Centamin Egypt (CEY) are willing participants? Unlikely now...Do EMED still hold KEFI stock? 

If readers remember Phorm, today's placing news is expected, with a lights on placing. Mirabaud has done well to get this away and surely must be their last access to funding for the company? Oh well, good money after bad. 

There was some sell-off on Sirius Minerals (SXX) this morning, by a few incompetents that read the latest update. For some strange reason, thought York Potash's production would be sooner than the Ministry of Transport (MoT) approvals.The Harbour facilities update is another positive in the SXX movement. Perhaps a quick email to Pearson (PSON) in light of their American online education wores asking for an e-ducation. The subject could be basic reading for those totally unrealistic about first production dates.  

Atb Fraser