Member Info for Happyhaddock

Whilst there are some/many here who will be well aware of this already, like so much on LSE bulletin boards the disagreements seems to be largely subjective point scoring.

The very meaning of the term "relatively" clearly implies some comparison relative to something else, where our grades will be higher than those that are lower, and lower than those that are higher. The top copper mines in the world operate on grades over 5% but such mines are becoming rarer and are mostly depleted. Whilst surveys differ the average grade of modern copper mines seems to be around 0.5%. On that basis our copper grades aren't excellent but hold the potential to be economic in volume. Clearly though we are an early stage exploration company where much about the future of our copper remains unknown and dependent upon what future drill results show.

I'm happy to sit on the shares I hold and wait and see how things play out and tend to ignore the majority of comments on LSE as they seem more about ego than anything else.

Many thanks

@wents - whilst I'm not doubting what you have presumably copied and pasted direct from an old RNS, it is one of those sort of statements that you read, nod in approval of and then forget about ... Do you happen to know/recall which RNS you have copied it from as thinking back I've no recollection of having previously read such a statement?

Thanks

@normbeef - whilst the notion of intentionally driving the share price down is plausible, simple conflict between directors and major shareholders could be enough to derail things if two different parties have two very different ideas about how things should be run and things end up struggling between those two paths rather than following either one.

I think all we can be sure of is that we don't lose three CEO's in short order because those in charge are happy that they are able to drive things forward in the way they think most appropriate.

Everyone knows that small junior explorers are risky speculative punts, not "safe investments"; they are for risking your beer money on, not your mortgage.

Each company comes with a unique set of problems and challenges ... This may be an unconventional view but whilst many here are slating our BOD for not caring I don't think this is the case here ... I've held shares in companies whose management don't care and the BOD is about as static as can be and year after year they simply draw their salaries.

The rate at which our senior management keep changing suggest either our BOD do care enough to either resign over not having the autonomy to run things as they see fit, or that the people that are in charge and making the decision are not our BOD and that who ever is in charge cares enough to keep bringing in new directors to fulfil their own goals if existing directors won't do as they are told...

The problem as I see it is not that the people in charge "don't care" but that we aren't being told what it is those in charge do care about (and it may not be the interests of small private investors) so as to drive all the managerial changes ... but you don't get this much activity in a situation where nobody cares.

... and you must be aware that in terms of protective hats, silver foil's properties offers better protection than tin foil ...

just wait until the conspiracy theorists get wind of that!

I've little to add here but as has been implied , valuations in the junior exploration sector are more "finger in the wind" than reasoned analysis.

For a business that generates no revenue you could argue that there is no value beyond any subjective judgement of what it may make at some point in the future de-risked against the opportunity costs of holding until then. You could value by comparison but if the whole sector is out of favour valuing something similarly to its near competitors may still not give a "fair value".

Long and the short of it is that OMI has been very depressed, largely owing to the fact our flagship Anza project has been mired in administrative limbo. Current rumour seems to be that may soon come to an end and that MAY explain why our SP is rising.

All told I've been here quite a while, I still believe our long term prospects are favourable and as such am not overly bothered by the current SP move, so nice as it is to see it rise again, nothing has fundamentally changed in my reasons to hold the shares, and so I'm not feeling any compulsion to sell.

Is that the case or do we so far only have permission to move the tailings to our doorstep pending permission to actually run the plant?

@normbeef - it kind of plays in to the post I made yesterday about how much autonomy our BOD have to act as they see fit and how much certain major shareholders are pulling the strings from in the shadows.

If our BOD make all these announcements of their own free will believing they are in our best interest then that is a different problem from having others nudging them in the backs and twisting their arms to make statements they'd rather not make.

Well, whilst today's RNS is some much needed good news, I am surprised to see the SP respond as it has. In my mind at least, the important good news we have been waiting on is the environmental permits that will enable us to start operating this new plant and that is still pending.

There is this sense that everything is in place to push the big green start button at a moments notice with crowds hovering eagerly awaiting permission to do so ... hopefully we won't have to wait much longer but for the time being we keep waiting.

Anza was what attracted me several years ago and while it got in to an administrative blackhole it is too good a project not to get out of that mess, which was why I was happy to just leave the shares in the bottom drawer and wait.

Probably too soon to know that good news is inbound but things must get resolved eventually.

I know junior explorers can be volatile and we have been undervalued for a while but clearly somebody has decided we are worth buying again ... wonder if it will last or if its just another flash in the pan?

@Max, perhaps we are reading the RNS about the payments differently, admittedly everybody seems to interpret it slightly differently suggesting it may be a little ambiguous; the part I deemed relevant about valuing the performance payment was this bullet point;

"In the event a decision to mine is made: 50% of the project valuation uplift attributable to the Projects."

I may be wrong but I take that that to mean that we compare the value of the project as an asset in the ground to the value of the project as a functioning mine (deduct for the expenditure making the transition) and our performance payment is half the uplift in value.

In the the absence of seeing the small print of the contract we won't know for sure, but if there is any ambiguity you can bet lawyers will be having a field day arguing about how to value any uplift in value.

I do agree with you though that there is till much unknown about how this plays out in terms of how things are monetized and who gets what and when.

A royalty payment certainly seems more workable than a one -off large upfront payment, but for the time being we seem to be committed to the one -off payment... the big unknown is how that may be valued and who gets the final say on that value.

I don't want to let this descend in to more petty squabbling so I'll try keep this polite but you say there is plenty of buffer in the budget of $30m - have you considered what the payment to Windfield may be?

If they are in the driving seat and arguing for as much as they can get (as all businesses do) they could claim with FOB costs of around $60/t and iron ore above $140/t that's roughly $80/t profit on 1.25mt/year or roughly $100m profit/year. Even allowing for a P/E ratio of only x3 and our payment towards the uplift value could be over $100m.

Now I'm not suggesting they'd get that much and I'd hope our own BOD would be free to argue for a much lower valuation. With AISC likely to be below $100/t and iron ore above $140/t our 1.25mt/year could easily generate profits of over $50m/year. Even working on a very modest P/E ratio of x2 that could value us over $100m. Take away current mkt cap plus the $20m you mention for developing the mine and then halve for the 50% uplift due and even a low calculation of the payment due could be most of the $30m you mention as budgeted for Cap-ex.

In the long run I'm sure the 90% ownership is a good deal for UFO, I'm just curious to see how payment is navigated over the short term and who ultimately has the final word on valuing the payment due.

Given how quiet this bulletin board has become I thought I'd put out there something I've been wondering about for a while, thoughts which became heightened when TW recently resigned ... I doubt we'll ever be given enough facts to know anything for sure, but that only adds top the possibilities when wondering ....

Others on this bulletin board have previously discussed the notion of our major shareholders working in the shadows like puppet masters pulling the managerial strings, and questioned why our CEOs keep resigning unexpectedly. The following may simply be coincidence but I would note the first surprise resignation occurred just prior to finalising the amended terms to make the "90% purchase" of the Hamersley iron ore tenements. Being without a formal CEO on our board when we announced these terms we then brought in a new CEO to sign this deal, yet their phased exit from Alien was announced soon after completing. We are again without a CEO around the time I'd expect us to be thrashing out the value of any "uplift payment" due to Windfield Metals.

None of us here have access to the contract detailing the "90% purchase" of our Hamersley tenements, whilst the RNS summarising any "uplift payment" due seems to be interpreted differently by each who read it. However, even if the contract was more tightly worded than the RNS, I can imagine that behind closed doors lawyers are still quibbling over the small-print. Whilst a best outcome for UFO's small private shareholders would be a decision that we could start mining with no uplift-payment due to Windfield, it seems likely that the decision to mine would see us having to pay a major shareholder a large cash sum potentially in excess of the profit from a first year of mining Hanc*ck.

I know no more than anybody else here about the autonomy our BOD has to make their own decisions. However I do wonder if successive CEOs departures relate to disagreements over who ultimately gets to profit from any revenue generated by Hanc*ck?

You can hedge out as far in to the future as you can get somebody else to offer you terms you are willing to accept, the further out you hedge the less appealing the prices offered. If you wanted to hedge until 2050 I'm sure you could get somebody to quote but would it be worth accepting a quote where somebody else is charging you to take on all your risk?

It's fairly common for the markets to routinely quote futures prices going out about 24-36months, but our off-take agreement may well end up looking at something other than classic hedging with openly traded futures contracts.

More than daily price moves of iron ore I prefer to look at the ever changing futures prices for 2025 and beyond as a guide for market expectations when we are ore likely to be mining. Mostly you'll be offered less for futures sales than current sales, but it's always a sign of positive expectations when people are willing to pay you more for future delivery than delivery today

https://www.investing.com/commodities/iron-ore-62-cfr-contracts

@FG - from another who loves a good quote (although alas this one remains anon.)

"The worst thing about worrying over how stupid the average person here seems to be, is knowing that statistically speaking half are even more stupid than that!"

I'd just like to re-post something that seems as relevant here today, as when first written about another company some time ago.

Faith is something that cannot be reasoned with, it exists in the absence of evidence, not because of its presence.

Some here have faith that we will prosper, whilst many just seem frustrated by how the current lack of certainty is impacting upon our share price... but what separates speculation from investment is the willingness to act before all the facts are known and the outcome is assured. This is why accepting the risk of huge percentage losses on early stage junior exploration companies can deliver huge percentage gains on the rare occasions everything does go in your favour.

Those shareholders here that have total faith in the company probably believe that they have invested, those shareholders without faith in the company probably recognise that they have speculated. Those with faith will listen to nothing but their own version of the future, those without faith look to hear of as many possible outcomes as they can so as to rationally assess risks and probabilities.

Some might claim that their blind faith is the better system if it stops them from making reckless overly emotional "knee jerk" sales they later regret. Others accuse blind faith of leading people in to having made overly emotional buys in the first place.

All that matters is that at the end of the day people can live with the consequences of their own actions. The amount of overly emotional vitriol currently to be found on this bulletin board suggests that however they came to make them, many are struggling to live with their own choices. So if you are questioning your faith in the company, ask yourself if you have gambled with more than you can afford to lose or allowed yourself to form unrealistic expectations about risks, valuations, volatility and/or timetables? If you aren't questioning your faith in the company then ask yourself why you remain so certain of the outcome before all the facts are confirmed?

If you can remain pragmatically calm in your judgement of future uncertainties then there's no harm in a little speculation, but it should never be mistaken for investing.

Well it is that time again when I look back on my prior predictions and offer my half yearly thoughts on the months ahead.

For over three years I've highlighted the risky nature of an exploration sector noted for uncertainty, facing accusations of de-ramping for suggesting that our share price may struggle for a while as we probably wouldn't be able to start physical work at Hanc*ck before late 2023 or deliver revenue before 2024. Throughout that time I've always claimed that 2025 was, and remains, my first date for appraising my speculative position in UFO. Yet in focusing on unknowns, I've often stated that I do not expect my predictions to be any more accurate than other people's.

Last summer I challenged other people's suggestions of Hanc*ck delivering huge share price gains in the second half of 2023. Whilst I mentioned the ever present risk of more share dilution or more delays with our iron ore, I did counter these cautionary thoughts by expressing the hope that our share price might finally break its down trend and end 2023 "modestly higher" than mid-2023.

Our share price had steadily dropped from 3.2p in late 2020 to below 0.4p in mid 2023. Soon after we were told that operations at Hanc*ck had again been deferred in to 2024. This was immediately followed by news of a very dilutive share placing to raise funds which our management said will only last us until early 2024. In response our share price quickly crashed well below 0.2p, where after a turbulent few months it ends 2023 just above 0.2p.

The next six months actually holds the potential to deliver the mining permits and funding we're still waiting on so as to start physical preparations at Hanc*ck. Yet in a sector where delays and share dilution are always a possibility, impatient markets respond to the uncertainty of "no news" much as they do the certainty of "bad news". So, whilst things may move erratically if important facts are confirmed, it seems safer to forecast more anxious waiting rather than to predict trend breaking moves in our share price. For better or worse, I shall keep holding my shares until 2025 before judging UFO's progress.

At a broader level I have always encouraged patiently maintaining a defensive position to hedge against further macro-economic instability. At the moment it is hard to avoid economic headlines warning us about current problems, future risks and the changing world order. Nevertheless the powers that be keep assuring us that all is well, as they try to kick the can far enough down the road to make it their successor's problem. I don't pretend to know how or when this will all come to an end, but it is difficult to see a positive outcome for any who aren't already prepared to survive increased trouble and volatility.

Good luck to all patient LTH of UFO and I wish everyone as happy a new year as the current circumstances permit!