Centamin presented an opportunity to walk in light of the
price movement, I'd be surprised if people can warrant a higher target price
save for the takeover rumours etc...bizarrely the price stepped up 10% (or
near it). Well the market likes the odd blinker...to ignore the issues.
Horizonte Minerals, A stock I've had a few plays with over
time, has published its Pre-Feasibility Study (PFS) that confirms economic and technical viability for Araguaia Nickel Project, Brazil. Now I hope you
note my sarcasm here, but anything is viable on paper if you factor in
"better anticipation and expectation" in the market place.
You read through it, like me, I won't try and pretend to
understand the more complicated "schpeel," but what I do know is there
are 2204.62 lbs in a tonne, and that makes my assessment easy! They're
forecasting $19K/t a price that may well be achieved in the near future due to
the Indonesian ban. However by the time the mine comes into production, its my
view if the "ban" has not been modified, then its likely future supply
will not be constricted. A ban by Indonesian currently and the
price is range $7.2-$7.35/lb currently. You're thinking, this is the "PFS" there could be some modifications in the Bankable Feasibility Study, albeit
HZM will need, ermmmm, cash for that part.
When you balance it in, you should derive like I a Nickel
price of 8.618265279277154$/lb. Sorry but you get the idea...it's only
modest $1.30/lb above the current price which I suspect will rise with
further tightening of supplies around October. All positive, but all the same,
I always thought you were meant to sell projects on past economics with
"headroom" and cream for an increasing price. Am I wrong here?
Well with an average price over 20 years of say 15,000$/t
or 6.803893641534596$/lb. I think I am being generous there, but guessing
at the average without currently having access to the stats. You get the
idea, its "only" 19% above the 20 year average, admittedly things
have changed and it has peaked before at $53,000/t or just over $24/lb there's
potential but at least be conservative with the pricing and expectations.
For the HZM holders, with the larger shareholders having
75% of the stock it'll be down to them to determine viability. Assuming one
doesn't have rose tinted glassed they'll look for improvements in these
economics at the BFS stage. Assuming they decide to go that way and not spin
the project out to someone with deeper pockets at say 12pence a share "to
keep some happy."
One of the mysteries in the market I have to say, assuming that all things remain equal there would be more upside in a Nickel
long than there would be in HZM post a rise to 9p. Rather simplistic approach
from myself but that's how I work.
ABM on the bank and just waiting to be clubbed by Creditors
it would appear: Albermarle & Bond (ABM) Update on discussions with lenders.
One begs to question what sort of discussions there were/are in light of the
response: the lender "will not be able to support the management
turnaround plan for the business The Board is continuing to
work with the Company's lenders on possible alternative options for
stakeholders."
So shareholders, pay up, or 'new shareholder' pay up and
discount all the way. One thing is for certain, the leveraged model across the
entire market whether it be Gold, Silver, Nickel (TALV) etc...does not work for
parties thinking or considering it to be low risk. However it's positive for
the press. They have been able to retrospectively write about what "was
clearly and matter-of-factly" coming.
Faroe Petroleum PLC Preliminary Results had a tone of consolidation. Perhaps
the market will follow suit: Financially, with the positives coming for the
company and development results should grow. There Net Cash situation is
certainly a benefit and prudently (so far) spent and reserves being upgraded.
The key to for me is the RBL (Reserves Based Lending) not burning a hole in
their pocket and one will assume that will be prudently spent!
My long (Leggie sit down) on Kingfisher paid well, it’s a rarity
for myself to go into results with full exposure. Kingfisherreports full year adjusted* pre-tax profits up 4.1% to £744 million and the
markets somewhat surprised by the capital return programme. It boded well for the SP, for myself the longs are banked, purely as I do like to run a sensible operating rule of making a
profit! One will await the ‘consensus’ before taking further positions, long or
short…
Atb Fraser
