Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The USD correction is due to lower CPI and a very mildly weakening labour market in the US. Both of these factors are a move towards what the Fed have been gunning for this entire year. Fed rate hike expectations are down therefore the DXY is down. To suggest anything else is the case when DXY dropped 120 points in the 5 minutes following the announcement seems absurd to me.
US CPI just came in lower than expectations and labour market continuing to weaken slowly. Good signs of FED pivot being closer.
Could mark the bottom for the sector, PM’s rallying nicely now as rate hike expectations come down.GLA, I may not get a chance to get my top up in if things move quickly, but they do tend move slower than I expect most of the time.
Exactly Norm, if China does open up again next year and the Fed pivots or pauses to some degree then we can expect iron ore to hopefully sit somewhere over $100. At around $35 profit/tonne our annual profits would currently be close to double our current market cap. It’s almost laughable - I know you’re familiar with financial modelling to some level so you’ll know how absurd that kind of valuation is.
It isn’t easy to find positives about this at the minute. I can post about it being undervalued until my fingers drop off, but sentiment is driving this not rational fundamentals, so until that changes perhaps we continue to drift. It feels like we are hitting an extreme low in sentiment - never seen so many bears in here, especially many that used to be bullish.
That doesn’t mean it can’t go lower, of course it can, but it would seem to me the main positive to be drawn here is only the contrarion one. That being, we have hit quite an extreme low in sentiment, which is often associated fairly closely with a share bottoming. Let’s hope it does soon. GLA
Would just like to add a big thanks to those who are actually selling down here. I thought my UFO accumulating days were over, but I will hopefully have some money coming in soon, and at these prices I'd more than happily add to my stockpile, and though I am disappointed with the current share price - I would hate to waste an opportunity. With the Fed rate hike cycle coming to an end and China looking to re-open, sentiment should start to return to the sector. UFO could comfortably be generating profits 2-3+x our current market cap depending on cost reductions from working with E-25 and iron ore prices in the future. Put the numbers of that level of profit into a NPV calculator and see how deeply undervalued this is. Only patience is required.
I agree on the basis I don’t think we’re going to have any news that will catapult us over 1p pre-Christmas now.
However, Q4 2022 I would expect:
• Heritage clearance at Han****
• An update on EH + Munni Munni
• Updated resource at Han**** (whether that’s move from inferred to indicated or a slight tonnage upgrade)
• Updated financial model and start of AA 60 day exclusivity
Maybe I’m a bit hopeful, but no reason to think these won’t come in IMO.
You seem level headed, DGR, and if I remember right have been here a while. I wouldn’t count you among the emotional investors on here so I’m not surprised that you aren’t nervous.
Sounds like we are looking to play this in a somewhat similar way. For the record, from current evidence, I believe the seller is Artemis, and ultimately is just down to a need for liquidity on their part. I may be wrong, but see no reason for concern as it stands.
I was talking about PI’s panicking and selling out in response to seeing large, unexplained sells coming through.
Lots of very emotional people around, only need to look at the boards on LSE and ADVFN to see that.
We can try to rationalise it with theories about Artemis, warrants, options etc., but the fact is we don’t yet know who has sold or I guess more importantly why!
So, it looks like the total shares sold today at the 0.35 - 0.37 area added to the 9.5m sell from Friday totals just over 179m shares which is pretty much spot on what Artemis are able to sell as it stands.
Someone seems like they want out over the last hour… perhaps panicking about the sells today. Will likely (hopefully) be shown to be a bit of a silly choice, as it seems likely Artemis just want/need cash and they believe in their projects more than ours. GLA, hopefully these weak hands clear out soon for when the good news arrives so we can rise a bit better.
As concerning as the conspiracy theories get as to why someone has sold out as they have, it would be sensible to remember insider trading is illegal - if someone has made a sale of that size on insider knowledge of something being bad they would be facing a large fine and prison time.
The more likely suggestion is as has been stated another company I.e. platina or Artemis need liquidity. Why they have sold at 0.35, well who knows, I don’t know if they have got rid of their entire holding at that price, or if that is the lowest price they sold for within the worked sell, but it’s odd.
GLA, hopefully a TR-1 to clear things up soon, and we should all realise that nothing ominous is going on!
Dickie, are you on telegram or Twitter? There is the potential for there to be a few million more tonnes at Sirius than current estimates show, but I can show you why they have only drilled where they have, if you’re interested?
They may factor it, but if you’ve followed forecasts anymore than for just the last few months you’d know they tend to be pretty horrific at forecasting, especially on longer time frames.
Macro headwinds and tailwinds change all the time especially in this kind of environment. The primary headwind at the minute is the Chinese economy slowing down. They are addressing this slowly with loan prime rates being reduced gradually through the year, but having to be cautious with $ strength as the Yuan has lost a lot of value, once that rolls over it will allow the PBC to loosen monetary policy and stimulate growth - markets are implying that 3.45% (down from 3.65%) is the likely loan prime rate by the end of Q4 in China - the lowest in decades (from the data I can find).
For anyone who actually is starting to buy into the BS being spouted here, the closest comparison to the operation we will be looking to run is Fenix, who had the following timeline:
- August 2020: mining approval
- August 2020: secured funding
- September 2020: board confirmed investment decision on project
- September 2020: second round of project approval
- September 2020: site works commence
- October 2020: offtake agreement secured
- October 2020: Port infrastructure secured
- October 2020: mining contractor appointed
- October 2020: Road contractor appointed
- December 2020: port access secured
- December 2020: production underway
- February 2021: maiden shipment of iron ore
There’s some real facts rather than the hearsay nonsense being spouted by some on here.
I don’t think the Fed have much of a choice, first of all they’re fighting a supply side issue with tools that kill the demand side. Sure, it alleviates some of the issue but not to the extent require.
There is a lot of unrest forming in other countries due to $ strength, with the likes of Japan, China and the UK all on alert and willing to defend their currencies… coincidentally the three largest holders of US treasuries!! Developing economies hold a lot of $ denominated debt which spells big trouble for them, and net importers are really struggling due to the loss of purchasing power… the US have effectively been trying to export their inflation and it still hasn’t worked, though CPI is a lagging indicator.
We are also seeing the Fed now approaching the end of their hiking cycle, while other major economies are relatively early on in theirs, so in relative terms, the Fed now has very little wiggle room.
Bond markets across the board are in trouble, which are the biggest markets in the world (global bond market in 2021 was estimated to be $119 trillion). US10Y yield is now a fair bit higher than the UK’s, which tells us their debt is deemed by the market as less attractive/safe than the UK’s. Bear in mind as of September, the Fed annual spend on interest payments was $648.454 billion, which will continue to rise - that is not sustainable.
My expectations for production were in Q2 2023 anyway, not sure what the great issue is here to be honest, production likely within 8 months - not much to be sniffed at considering the market cap and how much closer to revenue generation we are than 99% of juniors.
Bit gutting to see the share price drop to where it has, and I was hoping for things to be coming together a bit more by this time of the year, but hopefully another 2-3 months will get that certainty in place.
We are due drill results from Han**** and though I’m surprised not to see the results included in this RNS I do expect to see them soon as the company tends to release news in waves. Also drilling should start on Brockman and Munni Munni soon, with some ground work perhaps being done on Vivash ready to drill next year.
A number of theories could be made as to why we haven’t started drilling at Brockman, including JV talks, perhaps trouble securing drill rigs, I’m sure many people have their own thoughts.
Anyway, GLA and hopefully we see some good news start to present itself soon in the form of expanded resource estimates, permits, drilling getting started elsewhere and maybe some more progress on EH + Munni Munni.
Spot on Max, it wouldn’t be a stretch, considering what we have been told to look at other deals.
Our share price was also higher prior to the deal being mad than it is now… so it would appear to me that nothing is priced in regarding the deal. (Though I know markets and the sector have slumped further since the deals announcement).