Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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The US CPI report sell off didn’t last long ! Copper up, DXY index down. This could be the bottom on peak bad news. Hope so ! ..:0)
Encouragement - RNS today over at APF today showing bullish long term copper outlook by taking on a significant royalty!
Usual caveats
Trek
Goldman revised copper forecast
$7600 - 6months
$9,000 - 12 months
$15,000 - 2025
Bloomberg News
I am adding as funds permit and believe the current price provides a very attractive entry point. Demand for Copper can only increase and, once we are over the funding and permit hurdles, there should be a clear path to production and profits.
Sitting on a large holding that is rather red, like I guess a lot of folk are. I did average down at the dip. Also sitting with cash ready to add on positive news of the bonds if we are still below 40p. I firmly believe that the debt will be raised, but like you mention, there are lots of other 'bargins' at the moment and I am well overweight here.
Tricky one whether to add more or be happy with what I have as this is just a market downward trend and not anything PXC specific. I can't see a placing being prepared as we are going via the non dilutive loan notes issue.
As a rough idea, how many thinking of adding at these prices - considering there are many shares in my portfolio I consider at this time worth adding too as prices are down.
Fair points BlueSky72 and MTSparky
Donald Pond was suggesting " The City" was gambling that PXC would need a placing so were selling shares to buy them back via a discounted placing (or something like that). The subsequent to funding buying squeeze could be amplified by those gamblers needing to get back in? Just a theory.
Hi Bankrupty. The non dilutive loan notes are classed as a debt like item and therefore the net value of cash raised against that debt is equal (one nullifies the other) in MCap terms is it not? What it should do though is ramp the mcap as those waiting on the sidelines currently buy in at a relatively higher SP as the future finances are sorted for the foreseeable.
ATB
Well MTSparky...... I guess when the £60m odd is raised it will go into a bank account and if we have £70m odd in a bank account then the market cap has to be circa £90m rather than £38m today....so our SP will rise 75p......and I wish for a time travel ability to come back to today to top up significantly at 32p.......! and the odds of this happening have to be a lot better than 50/50..... really depends on how aggresive the fed will tighten.....or not?
Update later this month from PXC regarding finance for Empire. I can't see Martin Hughes sitting back and watching his investment vaporise because they cant raise the cash. Tosca Fund worth £4 billion. Maybe I am wrong?
What happens to the SP if they raise the cash?
What a great idea GST255!...
I think you need to read a bit of my posting history....on PXC lol.
The issue is not about my existing holding......the issue is on whether to top up or not........Remember the alternative investment if not in shares is the GBP£.........and how do you think that will go if the US$....carries on strengthening?
we can top up now...at 32p? or wait till/if FED restarts QE3+.....which will bring the commodity prices well up...and risk our news driven SP being a lot higher then......this is the conflict!
Bankrupty, if you're that worried and you do hold shares why not just sell up and go?
The worry I have is that copper and zinc, indeed most commodity prices, will not rise enough to cover the cost of resource extraction and they will follow the "peak oil" scenario.....(a lot of producing exporter companies need $120 per barrel to be profitable (incl. taxes/re-investment etc.) on the harder to reach oil deposits...and no country is able to ramp up production enough to satisfy rising demand....because the investment just hasn't happened in the processing infastructure due to the low $oil price in the last few years for an investor/oil company to make a profit in new field processing of the "harder to reach" reserves )
....and with the rising $US....QT......and higher interest rates driving the $US yet higher(possibly 120 +.....and the fact that 99% of the population can't afford US$200 oil and don't want to pay current US$100 even.....will we get continuous pressure on commodity prices?.... and will that in a worse case scenario put a delay on our ability to continue to production due to profit worries....maybe that's why we're considering moving the gold to year 1....to "get us through the storm".......but what happens if gold is hit in the same way......and will the average household be able to afford to go greener?....when the expected stagflation hits properly? ..what about Debt defaults? Credit crunch (worse than 2008?), increasing breakdowns of supply lines?
Or will everything above be a load of rubbish as the Fed/Central banks reverses policy and engage QE+ to infinity to drive continuous and never ending demand for our products....and we watch our market cap fly to £1bn...and enjoy neverending bi-annual dividends etc.???......but with the resultant hyperish inflation....will we turn a real profit on our investment ?
I would love to top up here at these prices.....and have finger hovering on the buy button....but I just don't know??
I am in severe conflict on what to do.......GLA
By the time Empire is in production there will be a copper supply crunch that will last for years, maybe a decade. Martin Hughes et al aren't investing for a quick trade. This asset will make huge returns in the long run...;o)))
From GettinBy on SAVE……
Commodities bull run…..
‘ The biggest risk for investors is selling too soon. From the bottom in 2020, the ratio of commodities to the Dow Jones Industrial Average has rallied by 40%. Using history, we can compare this move to past cycles. The ratio bottomed in December 1968 and by November 1970 had advanced by 40% -- commodities by 10% while the market fell by 16%. Many investors may have wanted to sell at that point; however, the rally was just beginning. Over the next nine years, commodities rallied another 156% and commodity stocks rallied another 400%. Had you sold in 1970 after the index advanced 40%, you would have missed 90% of the rally. In 1999, the index bottomed in June and advanced 40% over the next 12 months – commodities advanced by 33% and the market fell by 4%. At that point, oil was $32 on its way to $145, gold was $289 on its way to over $1,000. Over the next 10 years, commodities rallied 150% and resource stocks rallied by 325%. Again, if you had sold in 2000 once the ratio advanced 40%, you would have missed 95% of the rally.“
Let’s hope that that is the MO of our prospective bond buyers!
https://blog.gorozen.com/blog/the-commodity-bull-market-has-only-just-begun
Usual caveats
Trek
Cheers Trek
A couple of news items caught my eye today.
US jobs data
https://www.bbc.co.uk/news/business-62093303
Hint on direction of inflation
https://www.bbc.co.uk/news/business-62095670
No recession and easing inflation could see US markets up over 5%. Copper may follow suit not that it affects us directly but sentiment could see PXC SP go up a bit...;o))
Good spot MT…
“ London-listed mining company Phoenix Copper is due to launch up to $80 million of bonds linked to the copper price this week, targeting investors bullish on the long-term outlook for the metal despite a recent downtrend, the chairman said.
Mining companies often raise money by issuing shares or through project finance, but bonds linked to commodity prices are rare.
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Benchmark copper prices on the London Metal Exchange have shed a quarter of their value since touching a record peak of $10,845 a tonne in early March on fears that interest rate hikes will trigger a recession.
But many investors are upbeat about the long-term outlook for copper, needed for the transition to low-carbon emissions in electric vehicles and renewable energy projects.
Phoenix is raising cash to revive production at the Empire copper mine in the US state of Idaho, aiming to launch production in 2024, chairman Marcus Edwards-Jones said.
The company had told investors it would not dilute their holdings with any further share issues, so it opted for a bond linked to the copper price, Edwards-Jones added.
The bond, due 2028-2032, pays a minimum annual coupon of 8.5%, with the potential of climbing to a maximum of 20% depending on whether the copper price moves above $3.60 a lb.
Comex copper was trading at $3.57 a lb on Monday morning while the LME price was at $7,975 a tonne.
Each $0.10 rise in the copper price above $3.60 will lift the coupon by 0.15%, meaning a price of $4.30 a lb ($9,480 a tonne) will boost the coupon to 9.55%.
The Empire mine produced copper from 1901 until 1942 at high grades of 6%-8%, but has been shut for decades. Current measured and indicated resources for Empire are 87,543 tonnes of copper from an open pit mine, which also contains gold, silver and zinc.”
https://www.mining.com/web/phoenix-copper-launches-novel-bond-linked-to-copper-price/
Trek
Copper miners will experience grade decline and a growing supply gap. Demand will outstrip supply by more than 6mn tonnes by 2030. You would think there are plenty of takers on the bonds given the future demand for metals and the huge potential PXC has for a world class asset. I see the % annual coupon has been raised to 8.5% from 7.5% according to Mining.com.....;o)))
Tuesday was a good day to buy then - on the dip
Copper really motoring now up nearly 5%. Hopefully back to $4 by year end (or sooner!)
Copper price has made a slight recovery at $3.45 this evening. I’m seeing commentary around peak inflation having been reached in the US. Not final but there does look hope that a bottom has been reached for the US stock markets. Maybe the same can be said for copper. Copper and Dollar both up which maybe bodes well for us, copper seeing strength.