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James Bevan on cybersecurity, banks and the housing market Watch here

James Bevan on cybersecurity, banks and the housing market


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Member Since: Mon, 16th Jan 2012

Number of Share Chat Posts (all time): 6,053
Number of Share Chat Posts (last 30 days): 15

Last Posted: Thu 10:47


Post Distribution over the last 30 days




Thu 10:45

The trail of unintended consequences of having a complete loss cannon in the Whitehouse.

USD$ seems to be getting hit hard against a basket of developed currency countries, while developing nations / emerging markets (RAND, PESO, etc.) are being hammered against the Greenback, and so is copper!!

JD
15 May '17

If it is, then Its welcome news, putting it mildly, all depends how you take this passage in the last update:

'During April, rates of stacking contained copper metal tonnes onto the heap have improved and the rate of leaching copper metal tonnes into solution is expected to improve during the June quarter.� However April's cathode production tonnage will remain weak.'

You could take that to mean going into May cathode production will improve considerably. So I wouldn't be too surprised.

Also agree on the weather, it's been sunny and 20/25oC for the last month or so, hopefully this is fully back at nameplate (and more) way before Q1 FY 2018 allowing for a good run into FY 2018. Who knows,.....

JD
9 May '17

Always has an interesting take on things:

http://mobile.reuters.com/article/amp/idUSKBN1841YC

JD
3 May '17

If Orion wanted to strip the company of cash it could have easily done so well before now, they almost certainly have a cash ‘sweep’ over any money WTI make from Tschudi as part of their loan deal, however, Orion won’t ask for any repayments to be made until WTI have built up a significant cash buffer, and I do mean significant, so they don’t them come back to Orion in future for more handouts should further issues be encountered. All you have to do is look at the length of the $6k ‘offtake’ extending till April 2018 to jump to a reasonable conclusion on when the repayments will be made (Tranche B anyway), Tranches C&D may be paid before this.

It’s my contention (here to be shot down) that come more or less what may Orion will keep the WTI wheels spinning as the ‘manager’ of Tschudi (of course, that may also mean very little for shareholders in the end). It is now an ultra-lean vehicle with very low costs, which they control with 25% of the stock and 100% of the debt (obviously they have the default button against Ongopolo Mining Ltd should it come to it in the most dire circumstances). If Orion are unhappy with the management all they need do is get rid of them, easy job with the control they have over the company. Something tells me Mr Thomas and the executive operational team are probably on their last warning to perform!!

Maybe worth remembering that the Namibian Government own 2.6% in WTI, small, yes, however I doubt Orion are in the mood to rock the boat with the Central Government considering Tschudi needs its mining licence renewed this year. As per the Tschudi Technical Report on Weatherly’s Website:

‘Mining licence 125 (ref no.14/2/3/2/125), under which the Tschudi mine operates, was issued to Ongopolo Mining Ltd on the 29th October 2002, by the Ministry of Mines and Energy, and is valid for 15 years until 28th October 2017.’

JD
3 May '17

Yes, the price of Cu due to the Fix and Hedging is down the list on our things to worry about, first and foremost this has to operate at 17k tonnes per year as close as possible (and preferably below) $4k C1 Costs per tonne.

If they can just do the 'simple' properly this will recover in time just fine. But this needs at least a few quarters of good management before the SP recovers (but I have now said this many times before).

A wholesale collapse of the ZAR would also help.

JD
29 Apr '17

I don't know if I agree with your take on this Funds!

Assuming that this gets up to nameplate production at something close to the C1 Costs outlined in the BFS I can't really see how Orion will fail to make shed loads of cash on a rolling monthly basis?

The 700 tonnes per month 'fix' will surely make them a killing once (as I believe) the price goes over and above $6k for a sustained period, in fact you could (as I would) argue Orion are being very reasonable by 'fixing' at this rate, they could have demanded 'current' prices of $5,600 or so.

That's before we even get to Tranches B (Libor (minimum 2%) +6%) and Tranches C and D (Libor (minimum 2%) +9). Now considering what Orion will get funding for on the wholesale market (way below those rates) they will trouser the rest, which, is substantial.

And before you get to the fact they also make most of their money out of trading the Copper via the Offtake (which is the whole business case here in the first place).

Their biggest gripe as I see it is the poor performance of the mine. They can't be happy which is why I think they are only giving a two month reprieve at a time (same as Feb to Apr), they are now clearly demanding results from the BoD before they give them long term backing. They will be demanding 17k tonnes per annum for their Offtake and also so their $8m in shares at 2p pee share was not for nothing.

And I can't blame them, this is now the third failure in a new mine, which is totally unacceptable.

If Mr Thomas fixes this and gets production and costs sorted then he'll continue to get Orion's backing. If not, all Orion need do is tell the Chairman to replace him. I personally think the two months period is aimed at the BoD here performing and sorting this out than anything else.

JD
28 Apr '17

though it is now down on the list of our priorities with the ‘fix’ and ‘off-take’ agreement sitting at $6K for the remained of 2017 for 1250 tonnes per month combined (not to mention actually getting the mine working properly), it is still nice to see another large draw on Cu Inventories over the last week, ‘on warrant’ tonnage for SHFE drew down 10,772 tonnes and LME drew down 30,325 (as of Thursday this week). 41,047 total over the week on the two exchanges. Still important as if / when we can get back up to 4,496 tonnes delivered in the Q2 FY Update, then we could still be left with market value on sales of 250 tonnes per month over and above the ‘fix’ and ‘off-take’ tonnage (every little helps and all that). The more Orion make of the ‘Off-take’ over and above $6k the happier it also makes them (they should do very well out of that over 12 months):

http://www.lme.com/metals/non-ferrous/copper/

http://www.shfe.com.cn/en/MarketData/dataview.html?paramid=weeklystock

Chile also just posted another well sub -400k tonne month (March) of course most / all will be down to the Escondida strike in March, but still highlights the tonnage that has come out of the market:

http://www.tradingeconomics.com/chile/copper-production

JD
28 Apr '17

The 'off take' itself is perfectly reasonable in my view, as BTW was the 'fix' of $6k from Orion announced yesterday, they would appear not only to be reasonable but genuinely trying to make this work.

But they now seem content to give them only so much rope with 2 month intervals at a time, that would suggest that Orion are far from satisfied and want the option of stepping in if it so needs it.

Considering they own a quarter of the company and all of the debt they can merely switch the BoD at their choosing so as you say, over to Mr Thomas to perform.

JD
28 Apr '17

Sounds for all the world that Orion know this will now take till 2018 to start repayments and have ensured they are adequately compensated for that, they'll make a killing on that 'off-take' but also want the 'control' of having the two monthly break in order to be satisfied with progress. If I was them you can't blame them with all the issues previously.

Don't know what this means to us for the next year. I suppose if they can get C1 Costs back below $4K and get a clear $2k delta between costs and sells then it will slowly start to improve.

JD

JD


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