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Michael Masterman introduces Saffron Energy to London AIM Market (LON: SRON) Watch here

Michael Masterman introduces Saffron Energy to London AIM Market (LON: SRON)


Member Info for JDwag


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Member Since: Mon, 16th Jan 2012

Number of Share Chat Posts (all time): 5,939
Number of Share Chat Posts (last 30 days): 43

Last Posted: Mon 18:22


Post Distribution over the last 30 days




Mon 16:05

Inflation is a very interesting dynamic in all of this for me, in the last few hours Trump has come out in support of cutting back on social programmes and departments.

He is suggesting rerouting this money to a huge hike in defence spending ($54 Billion hike in the next budget) and infrastructure spending (which he is going to talk about at his speech to Congress tomorrow), now while this alone helps in the demand side for Cu it is also hugely inflationary, coupled with large tax cuts and repatriation of trillions back into the US under tax reform, it shouldn’t be too long before we start seeing some serious inflationary pressures and seeing copper benefit as a result via a ‘Hedge’ against inflation.

If we are very lucky we may even see an incredibly strong dollar as a result of this via higher interest rates to compensate for inflation and if Congress do bring in a 20% ‘Border Adjustment Tax’ as part of a tax reorganisation, we could see some massive gains against developing countries in particular, South African ZAR for example.

Lots of spinning plates on how this all works out!

JD
Sun 22:09

Take on copper uses expanding into possibly unseen areas, this picks up on the discussion we had on here a few weeks ago:

http://theconversation.com/copper-is-great-at-killing-superbugs-so-why-dont-hospitals-use-it-73103

JD
Thu 18:09

Agree on Tranche B, this will need to get pushed out to the next FY clear of the hedging and the Orion fix IMO. I am surprised that they didn’t pay at least one of Tranches C or D as they appeared to have the cash in hand to do so, I can only assume when you take one of these Tranches, plus interest accrued and the arrangement fee that the working capital would have been too low? As it would only have left some $3m+ of cash on hand as of 31 Dec (of course they will have made cash in Jan and Feb 17)?

As for the VAT? Maybe, could be anyone of those, could just be the usual bureaucracy associated with such things at central government level. Be it incremental or otherwise this will over time come back to us which will help with the cash position.

A rebuilding exercise, and we won’t see much in the way of SP movement till into the next FY. Before taking away the ‘Punch Bowl’ Orion will want to make sure the future is solid so there is no need to come back to offer help again, that would be even worse that the current situation.

Steady as she goes on to the next quarterly update in late April.

JD
Thu 08:24

off in my guess on how much cash + VAT they would have. In fact it has surprised to the upside. $8.7m + $7.0m VAT (when ever we get it it's still cash when it comes in) + $2.5m (probably a lot more if December was a 'strong production month' as that bodes well for Jan onwards production) and we are probably looking at $18.2m or so, that's pretty strong!

Interesting that they also only pushed the repayments back only two months this time, despite the 'can' be kicked down the road again we are getting there and the rebuilding job is also slowly getting there.

With no hedges / fixes going beyond June and a cash position being built up I think that is roundly positive with what Cu prices could do this year, if only the ZAR would help us out a touch!

however, why are they building up the inventory so much? This is bound to be cost money?

The biggest positive for me is the Statment on how December was a strong production month, I full expect next Quarterly update to be very near the 5,000 tonnes for the Quarter.

JD
Wed 16:27

No godly idea what it will say, however, as it falls out with the FY I actually expect the Debt announcement to be a standalone RNS on the 28 Feb. With the Interim Financial Statement on 1 Mar by it’s own.

Considering the Interim Financial Statement on 1 Mar will be up to 31 Dec 2016 it will give us the best insight we have had in a long time on the current cash position, putting aside if they pay B, C or D or not!

JD
Wed 09:19

Watched the CNBC Interview with BHP's CEO yesterday talking about their annual results and Escondida. That man his in no rush for this to be concluded, he obviously has his BoD and Shareholders on side to keep costs on a downward trajectory and they are not deviating from that.

After a painful few years their business is in good financial shape and they obviously think they will starve the unions into submission.

JD
21 Feb '17

https://www.google.co.uk/amp/s/www.bloomberg.com/amp/politics/articles/2017-02-20/zuma-gordhan-battle-takes-center-stage-in-south-african-budget

I'm like a broken record on this issue but this for me (coupled with US Interest Rates) is something that could transform our profitability. I still think the ZAR sooner or later is in for a heavy fall.

JD
21 Feb '17

I think that's about bang on, with 10% (give or take) of new world supply offline I think the market will now rise (or fall) on the back of inventories across LME, SHFE and COMEX and what they show.

A couple more weeks of this and we will start to move on inventories falling. A key barometer of this is the Copper TC/RC Rate (that is how much smelters charge ore producers to take their ore and convert it into a refined product) the higher that rate the maket is typically seen as having lots of supply and the lower it is the market is typically seen as being tight on supply, it has just fallen to its lowest rate in 7 months, once shortages bite and this rate falls further then Cu will move much higher.
20 Feb '17

http://uk.mobile.reuters.com/article/idUKL1N1G5110

No change, strike remains in place.

JD


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