Member Info for Happyhaddock

@5x5 "Glad we're not in Peru, anyone follow the story on HOC."

been invested in HOC for a while and took a chance this morning and doubled my holding and massively averaged down on the basis that this morning's share price drop was a knee jerk panic and overreaction to what was undeniably bad news, but not a death knell. Over the last four hours I've seen well over a 40% profit on those newly purchased shares as it has bounced back from the 75p I snatched them at to above £1.10 that they are standing at currently.

That said there is a lot to be said for politically stable jurisdictions dependent upon income from mining like Aus.

@ breaktwister - HOC is more than just the projects in question, sure it will be a major loss if we lose those mines in Peru, but that's not certain and they are not our only projects.

Plus reactions like this morning are always knee jerk over reactions, - I'm not a trader but if things bounce back enough over the next few days, that always leaves me the option to take back out what I invested this morning and just leave me with a lower average on my prior holding. Even at £1 where we are now that's a 33% profit on this morning's investment in less than two hours.

There are no certainties in life and I may yet be proved wrong, but the best bargains come from buying what others are selling in a panic and the opening minutes of this morning were nothing but gut reaction panic.

well for all the collapse in price it was a fight to get my hands on any of the cheap shares this morning but I managed at just 75p including all fees/spread/commission etc

I've doubled my holding in HOC and massively averaged down. Sure it is bad news for the projects in question, but at that price one for the bottom drawer and to look back on in a few years time as this is no junior tiddler on AIM that's just going to curl up and die.

As has been said a decent set of data to support why we have been, and should continue, spending time and money exploring this area. However, as of yet nothing that screams jackpot and an instant win, but whilst real life rarely delivers such fairly tales right from the very start, I've still got very high hopes for EH and environs eventually delivering a lot more than we currently know about.

@cjmorley - we've discussed before on this board the difference between FOB and CFR contracts - whilst we won't know the details until we actually have a specific client and a signed contract, in reality it affect invoice details more than it affects final profit margins.

If we don't agree a CFR contract we won't be paid CFR prices. If we do agree an FOB contract then the likelihood is that a customer will allow for the shipping costs in the price they agree to pay us and we'll end up receiving less that the market quoted ore price which in most cases is a CFR price.

@Rocket57 - excavation costs for near surface DSO are going to be pretty minimal so a major wouldn't likely have much cheaper mining costs, but a large part of the total costs will be haulage to port, and then shipping from port to client.

The major's will already have all this infrastructure in place to do this cheaply. It might not cost us much in terms of upfront capex to plan on trucking the ore roughly 450km to port, but it will always be more expensive in day to day operational costs compared to trucking just a few km to a major who have already invested hundreds of millions in a direct railway and who are already routinely shipping hundreds of thousands of tons to port per week.

I couldn't say how much of a saving a major could offer us trying to amalgamate our small project into one of their large ones, but their typical costs are currently under $20/t because of the scale of the operational infrastructure then have in place.

As for comments of falling somewhere between "just viable and "highly profitable", I'm inclined to agree. However being the cautious type I am, I would say the worst case scenario in that "just viable" category has to include "only viable with a JV partner" even if the more likely outcome is that we can make a modest return by going this alone as our BOD currently seem intent on pursuing.

As I've said before if Hanc**k funds extensive exploration at EH I'll be content, I'm not expecting huge profits and dividends.

"Is anyone here worried by the fall in iron ore prices ?"

I've long maintained that I believe our real wealth lies in our silver projects more than our iron. As early as last Spring when iron ore prices were still shooting up I raised the prospect that energy (hence excavation/shipping) costs were predicted to shoot up over the next few years whilst forecasts for iron ore prices were conflicted, yet many were suggesting supply growth would exceed demand growth leading to a significant fall in prices. That it was said that global demand at the time could be met by suppliers producing for under $65/t suggesting the market would pull back to eliminate some of the less economic smaller iron ore producers.

The usual suspects here have insulted and mocked me every time I've raised the fact that in a worst case scenario, to get a profit out of our iron ore we may have to sell/JV with a major partner who enjoys much lower overall operational costs that can still profit from very low ore prices.

However, we've at least a year until we likely go in to production and a lot can change between now and then. Undoubtedly as has been said, part of the current fall is related to Chinese restrictions around smog and the upcoming winter Olympics, so I'm expecting a modest bounce up again next spring even if this is within a longer term downtrend. Plus I keep telling myself if you don't have faith in management you shouldn't be invested, where I'm sure BBG knows more about iron ore than I do, so I take a little confidence from the fact he seems confident.

Nobody knows what will happen in the future, but I'm guessing that profit margins on our iron ore will be much less than some here predict, but that there will still be some modest profit to be had... If not its not uncommon to have juniors sitting on resources waiting for commodity prices to swing back in their favour. After all EH was initially a profitable silver mine, then it wasn't, now it looks as if it may well be again, yet nothing about the geology will have changed.

DRB83 - Many lab companies are investing and expanding, just look at a company like Intertek... its just that mining/exploration companies in Aus are expanding just as fast, making it hard to get back on top of lab delays.

For me the more natural expansion is for explorers to own and run their own drill rigs/teams to avoid booking delays, but they do need confidence that they will have a lot of need to sustain full time use so as to justify the cap-ex and salaries.

How exactly are we defining a professional investor/trader given that the traditional meaning of the word professional is to to do something to make money rather than for pleasure, and yet even "amateur" investors are here to make money.

Are we defining a professional as somebody who is paid a regular wage by an employer to manage other people's money even if they make a loss, or simply a private individual who make enough profit out of investing their own savings each month to not need to earn a wage from another source of employment?

Depending upon definitions there may be many pro-traders here.

@Dip666 - all too true, you can find forecasts/forecasters predicting almost anything if you go looking for them, almost all of which turn out to be wrong in the end, even if in a volatile market many enjoy a transitory moment of being right.

My view has always been to consider a wide range of possible outcomes, prepare for the worst and hope for the best, then allow plenty of time for things to play out.

Not long ago I was shot down in flames for suggesting that the rising operational costs of some small iron ore producers may lift above falling iron ore prices. That as a worst case scenario, in order to make a profit UFO may have to consider the possibility of needing to sell or JV our iron ore in order to merge it into a larger more economic operation.

As I type this the price or iron ore is down from a spike of £230/t in May to about £90/t and energy/shipping costs are going through the roof. Consequently close to half a dozen small producers have recently suspended operations. However we're more than a year from possible production and a lot can happen between now and then so I don't see this as in any way "diagnostic" of where UFO must end up in 12months from now... its simply remains a bearish case in a range of possible outcomes.... Others here have repeatedly covered the more bullish possibilities, whilst reality will probably fall in between.

@ Yayay - Given our past (and recent) experiences with SGZ I'm not going to say that you need a more long term view...

However I do feel many other so called long term holders do have very short term views and worry about where share prices may be next week or next month. If people want to gain from fast moving prices they should try cryptos. Mining and exploration is a slow process. I try not to have views about where the price may be in a few days or weeks as such views are invariably wrong. I view looking ahead three months as subject to too much short term volatility to make expectations or predictions meaningful. Until sentiment returns to the sector good news about any particular company may continue to have a subdued effect and leave it below what many of its shareholders consider fair value.

I bought into UFO at a mkt cap of £2m with the belief that 5-10 years down the road it could well have a mkt cap measured in the hundreds of millions and just possibly the billions . It's not taken it too long to get into the tens of millions and I see nothing that leads me to doubt that it can't get to the hundreds of millions over the next few years.. The ups and downs, stops and starts, delays and diversions along the road are less important to me than the belief it will get to my destination.

So if folks have confidence in UFO's long term potential but are bothered by short term price drops then consider checking price charts much less frequently and don't let others influence your expectations of how quickly gains will come. It was only a week or two ago I quoted warren Buffet as saying folks would make much smarter investment decisions if share prices were only published once a year in an annual report.

Well with ambitious plans ahead, and at least another year before we may start to see any income another placing shouldn't be a surprise... after all if investing in minerals explorers placing are are always a possibility.

As always the proof of whether it has been worthwhile will come many months from now when we look back and see what it has been spent on and what it has achieved. Hopefully in years time today's RNS will be forgotten and we'll be looking at a much better placed company.

I've just looked back to confirm the date and it was only about six weeks ago on Sept 14th, I posted the following ... sadly it has proved far too prophetic.

" I thought CB didn't look well, too. Wasn't sure if it was my imagination."

My very first thought when the video started was how noticeable it was that he'd lost weight and to wonder if he is unwell.

I've also been wondering for a few weeks about the reasons behind such a rapid pace of "development" that seems well ahead of confirmed drill data.

I genuinely hope there's no connection between these two observations to suggest either is the cause of the other.

Well a couple of interviews back a few of us commented on how much weight he had lost and speculated about his health but he looked much better in the most recent one so I don't think any of us would have precited this.

Thoughts go out to his family and friends and also to the staff at ECR who will no doubt be facing a period of uncertainty whilst management re-assess the situation.

CFR price - fat fingered morning for typos

correction CRR price of ~ $160/t not the typo of FCR cost

Fenix realised an average FCR cost of just over $160/t during the period their shipping was $34.4t, but they had hedged to lock in higher higher sales prices, so the open mkt price may have been a little lower

@DRB83 - Fenix's costs are easy to obtain from their own financial reports where for the latest quarter they state overseas shipping costs of $34.4/t, up nearly $5/t from the previous quarter.

@DRB83 - as has been said there are still too many unknowns to make reliable predictions about where our future profits may end up. Iron ore prices having spiked to extremes have fallen back dramatically and future forecasts are very conflicted with little consensus between experts. We must also recognize that energy costs are rising, plus demand problems are affecting overseas shipping prices which are currently at extremes where some are predicting the situation may get worse, others are suggesting things may settle back to past norms. Consequently current prices and costs may tell us little about potential profits in a year or two.... we've only to look at the roller-coaster ride existing iron ore producers profit margins have gone through over the last 24 months.

From my point of view the key point is that we are far from having a deal with any particular customer so don't know what contract terms we will agree, where our ore would need shipping to or in what quantities, all of which could have a huge impact upon our total costs.

We should note that shipping costs for huge capesize freight ships are much cheaper pro-rata than smaller vessels like panamaxes. Our CEO has suggested an approx production rate of 1.2m tons per year or about 100k tons per month. Depending upon how frequently a customer(s) may want deliveries, the location(s) to be shipped to and how port storage fees work out we may be looking at one small but expensive shipload dispatched every two or three weeks, or one larger more economic shipload every couple of months. At current prices shipped to China that could add to Our FOB costs anywhere from more than $40/t to less than $20/t, but as I say current prices may be a poor indicator of where things may be in a year or two and it may yet be that we end up shipping somewhere other than China.

As always I encourage folk to consider a range of possibilities, plan for the worst and hope for the best.

@normbeef - very much with you on that - what constitutes a "fair" price is very much about subjective judgement of what potential future profits might be worth to us today.

Myself I'd like to see us breach and hold above the 1.2 ~ 1.3p that has been a threshold all year as that would be a vote of confidence that sentiment is returning, but I think too much above that would likely be bringing forward too much anticipation of future earnings.