Member Info for Happyhaddock

As always I'll place the proviso on my comments that I don't expect my predictions to be any more accurate than other people's; However, you all know that I've been saying for most of this year that I expect it to take until April 2023 for UFO's price stagnation to gradually ease. It may take a while after that to look back and see where the bottom was as I'm not expecting an instant or huge re-rate in share price in Spring, just an end to the decline. I've no more information than anybody else on which to base estimates but for better or worse I'm working on the assumption that we've still got quite a wait for all the paperwork to clear that will enable us to begin the move from junior explorer to junior iron producer. As such it may be well into 2023 before we actually start mining iron ore, and perhaps 2024 before we are generating meaningful profits. It would be fantastic if we could actually meet some of the schedules and share price moves being proposed on this bulletin board, but whilst possible it doesn't feel probable and I am prepared for sentiment to get worse whilst we wait for it to get better.

As I said just a day or two ago, our longer term price chart suggested we were due a little bounce up in price to loosely around 0.5p simply to get back up to the gentle decline we've been following for two years. So, nice as it has been to see a few days of positive price activity, nothing about this appears outside the routine volatility of the last two years or indicates to me a significant change in sentiment just yet.

As others have said, if markets can keep iron ore prices above $100t then we should eventually get Hanc*ck across the finishing line, much below that and things look a little shakier. I don't see this as a significant risk over the long term, but in the current economic climate I've little faith in any short term predictions. So I'm happy to just leave my shares in the bottom drawer, wait and watch for a little longer.

I'll spare folks a lot of detail from what is really just an off-topic rant into the electronic ether...

For some while I've had problems with HMRC's different computer systems not properly communicating with one another or fully recognising my existence. This has lead to contradictory communications from them along with inaccurate mis-calculations of the tax I owe based upon the government systems working with incomplete data. Numerous attempts to resolve this with their technical departments have all failed resulting in instructions for me to keep submitting tax returns on paper through the post the old fashioned way. This in turn has exacerbated problems with them losing information despite me having tracking data from the post office proving they signed for delivery of my postal returns. This problem is further compounded by the fact that when I repeatedly telephone to report problems of them not recording information on their computer systems, they report that they neither have any record on their systems of me having previously attempted to report such problems over the phone, nor send the information requested in the post.

Anyway, as a consequence I spent much of last year fighting to cancel large fines for late submission of information. I've also been fighting a losing battle about national insurance payments dating back many years. One of their computer systems keeps telling me I owe them money, the one that handles financial transactions somewhat strangely tells me payment has already been taken from an overpayment of tax decades ago at a time I wasn't paying tax. I've often tried telephoning the tax office and making the payment of what I believe I owe, on one occasion I even reached the point of issuing debit card details to, and being given a payment reference number by, an HMRC call handler. Yet years later the appropriate part of HMRC's computer systems still refuse to process payment with the details it has been given on the grounds it doesn't think I owe anything.

Today I've received three letters through the door in three separate envelopes from HMRC. One is an automated demand for assorted missed years of national insurance owing, one is automatically issued instructions for how to pay on-line and the final one a personal response to a complaint I'd sent about their inability to process payment. A reply which provided me with alternative instructions to pay over the phone using an automated system as some of the payments owing date back sufficiently far they couldn't be handled by the on-line self-assessment payment system. I've just phoned the number given and it simply plays a recorded message announcing technical faults and encouraging me to make the payment using the on-line self-assessment system... an online system that refuses to recognise I exist encouraging me to telephone HMRC or contact them in writing...

You couldn't make this stuff up if you tried!

@chrisatbirdies - I'll take that as an invitation for another cautious yet pragmatically optimistic comment.

Looking at a longer term chart we've been in a pretty steady decline for over two years, at the start of November we took a dip in price that challenged the bottom of that trend. That suggested either something had gone very wrong, which there was no evidence to suggest, or that we were due a bounce back up to loosely around 0.5p to get back to that trend. We've done that and are back well within the range of that gentle decline we've been following for two years.

I've been saying for quite some time I expect to have to wait until April 2023 for a gradual change in sentiment. If UFO can push above 0.6p and comfortably sustain that I'll assume I've been wrong in my expectation and that we are starting a new uptrend earlier than I assumed.

For the time being I'm still working on the basis that UFO is a great speculative play on many fronts, and where the potential long term rewards outweigh the short term risks. However I still reckon we've got a bit of a wait for all the paperwork to clear that will enable us to make the move from junior explorer to junior iron producer.

So rightly or wrongly UFO is for me still one to leave patiently in the bottom drawer for a little longer.

I rarely post here because of the slow moving nature of such junior explorers... I will however mention again something I've previously written about here.

Having the backing of major partners is a double-edged sword; Junior explorer's prices go up based upon drill results that increase defined resources. Major partners that may have a long-term goal of buying out a resource don't want the future price they may have to pay to go up. They want a broad-brush idea of where there are, and just as importantly aren't resources across a large site more than they need to start with detailed knowledge of a tiny part of that site. As quickly as they can they want to gauge if it worth spending an awful lot of cash exploring large areas for large finds.

I think at this stage in the process we need to get used to drilling uncertain areas to see if there's anything there, not drilling to measure what we already know is there. Don't take "dud" results as failures it's just part of the process majors go through when they can drop several million dollars just to get a feel for where it might be worth committing many tens of millions.

well nobody like seeing a major shareholder continue to dispose of such a large number of shares, but the fact that the BOD and employees are happy to keep buying them up has to be a positive.

I still remain cautious about UFO over the near term and consider it optimistic to assume we will hit the timescales some here keep talking about, but long term, and even medium term I remain confident and happy to hold. Would be great to be proved wrong and have a cracking start to 2023, but I suspect it may be much later in 2023 before things heat up.

Well it's always good to hear something about EH but that did feel more like a "the crowd want us to say something" sort of statement more than a "we've got something to say to the crowd" statement.

Nothing negative in there but nor was there anything new of great significance, just a reminder for the impatient that they're getting on with things.

@wents - whilst all you say is undoubtedly true, there is within it a somewhat cynical and pessimistic tone.

Myself I tend to work on the assumption that if a statement made on LSE has no bearing on my own investment thesis or the performance of the company then it doesn't matter whether it is true or not, nor does it matter what the motives behind someone posting it were.

In almost all cases it is counter-productive wasting time trying to work out if everything said here is true or not as so little of what is written here is anything more than idle chit chat. The world is full of people with different beliefs, attitudes and approaches and it would be foolish to assume that I will agree with or understand all of them.

I think the big mistake is to assume that anything said here is actually important enough to move markets... after all if we look back over the last few days or so it's largely been a commentary about the fact nothing has happened over the last week.

@chrisatbirdies - thanks for the nod of confidence, but to clarify I've been speaking about first signs of a gradual change of sentiment in April 2023 not a big move in SP.

As always I'll place the proviso on my comments that I don't expect my predictions to be any more accurate than other people's; However, I've been expecting it to take until Spring 2023 for the price stagnation/decline to gradually ease and for the SP to reach a bottom. It may take a while after that to look back and see if it was a bottom or not as I'm not expecting an instant or huge re-rate in SP in April, just an end to the decline. I've no more information than anybody else on which to base estimates and I am more cautious than most here, but for better or worse I'm working on the assumption that we've still got a bit of a wait for the important paperwork to clear, that it may be well into 2023 before we actually start mining, and perhaps 2024 before we are generating meaningful revenue. It would be fantastic if things could happen much sooner but whilst possible it doesn't feel probable.

Precious metals attract emotional narrative driven speculators so it may still be a single bit of news about EH that brings our first big move in SP. Iron ore is "uninteresting" in comparison and tends to attract those who want formal confirmation of all the important facts and definite data to run through financial calculations before investing, something we may have to wait a little longer for. However should we be able to generate a "safe" income stream it would be transformational for a small explorer like UFO and the backing of a few pragmatic and unemotional investors may bring us some much needed stability.

As normbeef has said before, if markets can keep iron ore prices above $100t then we'll get Hanc*ck cross the finishing line, much below that and things look a little shakier. I don't see this as a problem over the long term, but in the current economic climate I've little faith in any short term predictions so I'm happy to just leave my shares in the bottom drawer, wait and watch.

@smiller I don't have a next planned purchase,

I do however distinguish between businesses I can invest in, and those I think are a good speculative punt. Those that are good safe businesses with a proven track record I don't mind adding to if the price drops low enough to be tempting. In terms of those I'll speculate in then I limit myself to small sums and try to be strict about not exceeding that however tempting the price... that's where I am with UFO... if I had none then yes I'd risk a few quid at this price, as it is I risked those few quid a few years ago at a much lower price.

I suppose if I am watching one thing more than any other at the moment it is GGP's price fall. I keep wondering if I can consider it safe enough to start treating it as an investment or if I stick with thinking of it as speculative play and say I've already reached my fill of that.

I don't know how things will play out but it looks likely that recession may be a big feature of next year's macro-economics... that could be bad generally for all equities unless (until?) central banks panic and print more fiat currency. Whilst I expect that commodity producers may get hit if the markets go down, I also expect they maybe some of the first to recover.

@Max111 if you don't believe me that is your prerogative and if you don't believe me then you could just as easily claim anything I sent you was photo-shopped so I achieve nothing by sending you information, I could just as easily send you an image of a birth certificate proving I was the Queen of Sheba. Also, although you will no doubt claim it as just another lie or excuse but I'm not wasting my time signing up for an anti-social media account simply to enter in to a petty squabble. I try to avoid squabbling on-line as it simply makes all involved look immature, yet you seem to hold some sort of grudge that leads you to repeatedly seek to discredit me.

I get that you don't like the comments I make as you are uber-bullish about everything to do with UFO where-as I advise a slower more cautionary approach to considering all outcomes. To date my comments which have challenged your own short term predictions have proved more right than wrong but that may not always be the case. We are all grown-ups here capable of respectfully holding differing opinions, if you can't then I see that as your problem to resolve not mine.

@smiller - I'm not waiting on buying more, I built my position back when the mkt cap was £2m as that seemed as risk free a buy in point as you may get with such volatile juniors, and a price unlikely to be re-visited. Unless I suddenly win the lottery I don't really plan on adding any more to my UFO shareholding.

When speculating in risky juniors I don't like to put too much in to any one company and UFO's growth has already made my holding more than I'd usually accept in such an unpredcitable stock, I just intend sticking with my original strategy of riding out whatever the market does and see where we end up in a few year's time.

At the time I joined this board I said it was because I was interested to see if I could learn anything about what had prompted the then recent irrational run up to a 3p SP. If truth be told it is a broader interest in the psychology of other investors that draws me back to LSE more than the expectation I'll learn anything new that will cause me to change my own strategy towards UFO... indeed looking at my stock transactions shows I've neither bought nor sold any shares in UFO since joining this bulletin board in 2020.

"By the looks of this board seems like we’re nearing capitulation"

when there's still lots of folk commenting many times each day we're probably still some way from capitulation... that tends to occur once everyone has stopped saying anything about a company good or bad and has just moved on.

We've had more than five dozen posts about nothing in particular today, if we get down to less than a handful of posts per week, that is more likely to indicate capitulation.

Well Christadbirdies, I've spent most of the year suggesting that most price forecasts (mine included) would likely be wrong and that we'd most likely see a big move up when we are all least expecting it, if for no reason other than that things that are expected tend to be factored in to a SP in advance.

That said I'll again repeat my prediction from much earlier in the year that we'd likely see the share price continue to stagnate for a good while, and that rightly or wrongly I expect to see the first signs of a gradual change in sentiment around April 2023, not that I expect to see a huge move up in the SP then, merely an end to the stagnation.

Who knows if I'll be right or wrong, but for the time being I'm neither buying nor selling shares in UFO, I'm simply holding the profitable position I bought prior to the crazy spike in 2020.

I suppose we can all speculate about who is selling and why, but at the end of the day all that matters is if the MM think they've got a good deal and don't mind having all these extra shares to sell over the coming weeks, or if they want shot of them quickly.

If they believe they can easily find buyers for all of them the SP will remain relatively stable as the shares are dribbled back in to the market, if they want rid of them quickly we may find our SP ends up settling much closer to 0.35p than any of us would like. We'll find out over the next week or two which is the case.

management certainly are giving the impression of being busy behind the scenes and dedicated to making things happen.

@AJ - seems we were having the same though at the same time as our posts crossed

@Deanok,

I'd have assumed that our low SP would impact upon the 90% ownership deal given that it is below the ~0.7p the amended option stated. However the line below from today's RNS suggests otherwise without being at all clear ... what relevance does the closing price have if the number of shares is fixed rather than the value of the deal?

260,000,000 UFO shares at the closing mid mark price on the day of Completion

I'll leave others to decide if the following is a genuine forecast representative of analysist's beliefs or a technical glitch in an automated algo. However if you go to the following and click the forecast tab, things have changed radically over the last couple of days since I last looked.

https://tradingeconomics.com/commodity/ironore62

Well given where our SP is, and the way the revised deal was worded, I was beginning to wonder if it wouldn't take yet another revision to the option to get this over the line.

Nevertheless, great news to hear that this is being pushed forward.

We all know there are one or two here who will attack anybody posting contrarian opinions, just as there are one or two who are automatically attacked on the basis of creating the impression they are celebrating other people's potential misfortune. However, regardless of who posts the comments, every UFO shareholder should have an interest in the impact of volatile ore prices upon small iron ore operations in Australia.

The last time iron ore prices dropped this low I commented that quite a few small producers in Western Australia had to temporarily suspend projects though their inability to generate profit. Those projects I remember include Indus's Ridges, Mount Gibson, Venture Minerals, GWR Group and Vale. Just in the last 24hrs I've read about the JWD mine (10.7mt@ 64%Fe DSO in Western Australia) having just suspended its operations, stating that low prices and future forecasts were now preventing it from hedging at profitable levels, with higher diesel costs also adding to its outlay.

Many here liken us to Fenix's Resources suggesting we may deliver similar performance. Their previous twelve month hedge at a much higher ore prices came to an end in the last few weeks, and whilst it still has a further six months still to run on a subsequent hedge at a smaller gain above current prices, would it be in profit if having to broker a deal in the current market?

By the time we allow an amount (as yet unknown?) for additional costs over our estimated FOB or projected EBITDA, margins for UFO at current prices are looking tight. However we are still a good way from actually mining meaning current estimated costs may change, just as current market prices may also change. I don't think we are yet at a stage where I'd expect Hanc*ck to be unprofitable, but nor do I think there's much "meat left on the bone" for us at current prices. The positive of that is small moves up in volatile commodity price can have a huge impact on the profits of marginal producers, the downside is that small moves down can push marginal producers to the wrong side of breakeven.

@normbeef - I hope you are right in claiming there's still plenty of margin left as it seems to me that at current ore prices the margins, whilst still there, are thin.

The recent news from UFO giving financial estimates from the scoping study along with proposed financing from Anglo
suggest up to $5m pre-payment to cover first year vessel payments which should temporarily ease extra costs above estimated EBITDA, but current ore prices are about $40/t below those the scoping study is based upon which will eat away a lot of the study's EBITDA and the IRR of more than 100% it mentions. Plus we've also had hints that costs may be a fraction above those mentioned in the scoping study.