Member Info for Happyhaddock

@EWT98 - so very true about the pitiful performance of economic forecasts, I read a statistic a few weeks back that showed a study of thousands of professional price forecasts going back decades across all sorts of sectors, commodities and markets .. only one out of every hundred and seventy were apparently within 5% of the actual outcome.

perhaps the most reliable forecast is to predict that the forecasts will be wrong.

@max - Iron ore has had a small bounce up after a large fall - it's maybe a little soon too claim it's surging given that it's still more than $100/t below it's recent peak of around $230/t.

With such a mixed bag of inconsistent and contradictory future forecasts for iron ore it's probably best treated as a "wait and see" prospect given that you can argue for prices ranging from $55/t to about $180/t depending upon which forecaster you decide to quote. Plus its profitability varies hugely based upon any individual producer's operating costs where the biggest in the business would still be doing well at prices as low as $55/t.

@yayay - cheer up we're watching our SGZ finally turn the corner and head in the right direction again and UFO will have it's day at some point.

Valuing juniors is a very vague art as it is all about subjective judgment about how forward looking the rest of the market is going to be at any point in time and what other distractions will keep them from looking at junior explorers. Junior explorers are companies where the business model is to raise money they aren't earning to spend on trying to prove their assets are worth something. So if being harshly pedantic you could say they are all worth nothing more than the cash in their bank accounts.

Of course the above is nonsense as somebody is always going to be willing to pay something for existing licenses if there is a chance there may be money in the ground... the question is always how much and when might the markets expects that wealth to be coming out of the ground.

I can't claim to know how low UFO might get (anybody that does is deluding themselves), so you may be correct in predicting 0.5p as sentiment is well and truly against the sector at the moment. However for investors rather than traders short term price moves are not so relevant, we'll simply hold (or add more where funds allow) when something seems undervalued.

Whilst we know we have iron ore its future profitability is an unknown, whilst the future profitability of silver and PGM's seems more secure we've barely started looking in to how much of these we may have in the ground. Consequently you can understand those who are sitting on the sidelines awaiting more definite info before committing to any kind of risky investment like a junior explorer.

So yes it's disappointing to see the price down here, and will be more disappointing if it dips a little lower, but today's price won't be relevant in two or three years time when much more about the company should be clearer for all to see. In these uncertain times it's easy to identify any one of many potential triggers for a change in sentiment which may or may not move the share price much sooner. With such small daily volumes it won't take much money returning to spike UFO back in to over valued territory again.... but those are the risk sand challenges of investing in such volatile stocks where you benefit from being out of them for more than 95% of the time but can't reliably predict in advance which is the 5% of the time you need to hold to maximise returns.

seems an abnormally high number of trivially small trades going through at the moment, a fact which is either itself trivially irrelevant, or a bit of fun for conspiracy theorists to play with in terms of secret messaging between MM's ... ;-)

Well for a while we've ben more or less illiquid and ignored with several times when daily volume has been below 10m and a few occasions below 2m traded in a day.

If nothing else today's volume has be significant, and from a psychological standpoint I have been waiting for a change from fear and denial to capitulation and resignation... whether this is it or not I don't know but one last big clear out of weak hands may be what we need to properly form a true bottom.

@silverhorse - still here and facing the same situation as everyone.... that is to say having my patience tested by the markets.

I keep telling myself I built a position in UFO because I believe in the long term prospects and am willing to ride out short term volatility. All the while resisting dual instincts; one to sell because the price is falling and the other to buy because it is so low.

However reacting emotionally is never beneficial so I'll simply stick to the plan of holding and waiting to see where we are in 2-3 years time.

Is hitting rock bottom the best way to express the situation facing an exploration company that drills holes in rock so they can find out what's even lower down?

;-)

@ yayay - we've both been around the block enough to know how much sentiment can move AIM stocks.

Sentiment in this sector stinks at the moment and UFO are trading on such low volumes that it is now getting common to have days when the entire turnover of shares is less than some private investors hold, there have even been the odd days when total volume has been so low I'd guess almost any private investor would hold more.

Just focus on the fundamentals and wait for sentiment to return, for as Warren Beaty once said contrarian value investors have to enjoy being the only one at the party.

I've been suggesting for a good while that I believe Alien's real wealth lies in EH and environs, that it's a real sweet shop of endless possibilities that I'd like to see drilled to look like swiss cheese.

...nice to see a little progress towards achieving that goal and hopefully proving my beliefs correct.

I've always been of the opinion that regardless of the task or activity doing something for yourself gives you greatest flexibility and control... the issue is simply whether you can justify the time to learn skills and the resources to obtain the specialist equipment needed to do things as well as getting in specialists to do a job for you.

As an exploration company I'd hope and expect that we'd be spending a lot of time drilling, so to me providing we actually have enough full time drilling to do to justify owning our own rig(s) and employing our own crew it's a natural choice that should save us more and more time and money as the years go by.

Nevertheless recent development hint at the fact that ECR's motives for these acquisitions may not be entirely motivated by the need to drill our own licenses. If this is the case, whilst not inherently a bad thing, it does create an expectation of some sort of clearer statement as to what the overall grand plan is as it never seems to be the case that we shareholders are all confident we have been given the full picture.

@DRB83 - I suspect you'll find it may be somewhat more than a truck a week to move a million tons per year, that you may be out by at least one, maybe two, orders of magnitude. The UK's larger HGV's tend to carry not much more than 30tons of cargo whilst Australia's biggest multiple trailer road trains apparently carry no more than 200tons and most are typically less. Fenix whom we are often compared with quote that their excavation costs are roughly equal to their haulage costs to port of just under 500km, where UFO's Han**** license is just over 450km to port.

As for future costs of just $50/t ... I recognise we are speculating in the absence of facts so I can't provide evidence to show you are wrong (I hope you are right) but that figure does instinctively seem a little low to me.

typo correction $18-$20/t

@DRB83 - I think the largest of majors are operating on costs of around £18/t - $20/t but many small producers without such economies of scale are multiples of this, up to five times higher, but clearly each company is different. We will hopefully benefit from having near surface DSO meaning to mine a ton of ore we won't have to mine much more than a ton of rock. I guess some small producers have to mine a lot of waste rock just to get to their ore and if done at high costs then averages can soon run away with themselves. Until we actually get hard data from UFO the whole issue of our future costs and possible profit margins remains a big black hole we can throw any guess we like in to and get nothing back out of.

I saw a chart recently that showed if you align the worlds iron ore producers in order of increasing operating costs current global demand can be met by all those with costs below $65/t, implying those with costs above this may not remain viable if market forces bring costs down in a competitive arena.

Well I tend to get shot down by certain individuals here who insist my caution is nothing but de-ramping,. However whilst there remain too many uncertainties to make predictions with any confidence, I tend to favour planning for the worst and hoping for the best. Nevertheless I'll chip in my two-penny worth.

Many folk cite current macro economics and inflation as being good for ore prices but if inflation drives up all prices and costs more or less equally that in itself doesn't help (it just devalues the currency we use). We need customers to compete to obtain our ore to drive up real world profits. Expert predictions remain mixed with many suggesting supply growth for iron ore is set to exceed demand growth which may hold down prices. I think the most cautious/pessimistic forecast for next year that I have seen has been the Aus govts. own forecast of $55/t. I'd be surprised to see prices that low next year but believe it prudent to allow for the possibility of ore prices not much over $100/t and possibly a little below.

As for costs, the last few weeks have seen reports of a few small Aus based iron ore miners with costs approaching $100/t suspending operations because of rising energy costs and ore prices briefly falling below $100/t. We can only estimate what our future energy/production costs may be. Our BOD have suggested they believe our ore should be economic to extract but not yet quoted any actual figures for us to work with. Our broker Turner Pope have suggested a very bullish figure for production costs of under $50/t that really doesn't seem in line with potentially similar sized producers. So whilst I am treating this figure with some caution, time may yet prove it to be accurate.

It's not implausible if taking a bullish view to suggest that more than a year from now we could be running on costs below $60/t and an ore price close to $150/t leading to profits of nearly $100/t .

However nor is implausible if taking a bearish case to suggest a possibility that more than a year from now our costs could be approaching $100/t and that ore prices could be below $100/t leaving us no profit.

Until we have a lot more data to analyse we simply don't know and can't make reliable predictions. My own gut feeling is that profit margins may be less than many here predict, but even if we cautiously allow no more than $10/t to $20/t profit,
with Han**** delivering 1mt/year that's still a decent return for a small mkt cap company like Alien.

There an old saying in this game that the only way to be sure of making a profit from a gold rush is to be the guy selling the picks and shovels...

If ECR are serious about going this route, as looks to be the case, then it would explain some of recent decisions and acquisitions that seemed to be getting ahead of ourselves as a junior explorer.

"I don't think we are getting the full story off him and will wait and see what that is , the sudden rush to buy the properties won't make sense until it does."

That's very much my thinking. It's hard not to take all this activity as sign of positivity and a confident BOD, but until we share holders get a lot more info it's difficult to share this confidence ourselves.

I know there are rules about what information has to be disclosed as market sensitive but I've a slowly growing feeling that something has been "informally" agreed behind the scenes that they are currently unwilling or unable to talk about.

This isn't our CEO's first rodeo so we have to trust he knows what he is doing by "putting the cart ahead of the horse", but he will end up with a lot of egg on his face if this doesn't lead to a producing gold mine.

@silverhorse - there is no one size fits all investment so what suits one person's needs may not be good for another.

For the moment sentiment in the precious metals and exploration sectors stinks, and the whole space feels like a value trap, so if you are looking for short term gains buying GGP may not be a good idea.

If you have a long term horizon then it is hard to imagine sentiment remaining so low indefinitely, and as such GGP is probably as safe as you can get in the risky minerals exploration sector. (much safer then UFO but with less chance of massive multi-bag gains). However that's not to say sentiment can't take GGP lower in the short term ... perhaps if you want to buy GGP dribble your money in slowly over a few months to even out any short term profits and losses. However you really need to do your own research and make your own decisions as I don't have a crystal ball to tell me how the future will unfold.

Myself I hold a few GGP and I'm just ignoring them for the time being as it is all too easy to miss out on long term profits trading in and out of things chasing short term gains.

I don't suppose we'll ever know for sure, but it seems likely that much of what is going on with silver at the moment relates to bullion banks trying to get out of short positions before Basel 3 regs hit the London market (albeit in their "exempt" slightly different London format) in January.

The next three months might be a wild ride for silver but some of the more knowledgeable commentators than myself feel the start of 2022 could be "interesting" and I'm not going to disagree. However predicting silver price moves is a fools errand as it has been undervalued and "on the verge of a major break out" for decades.

@napth - I've nothing to gain by arguing or resorting to petulant name calling, but on several occasions now I've encouraged you to actually put forward some sort of evidence to back up the notion that what I write is either factually incorrect, or at least that I am making future projections based upon wildly inappropriate assumptions.

In each case you have dodged the issue and resorted to calling me a fool or an idiot that talks cr*p and accused me of de-ramping, along with challenging any who might suggest that what I have to say is of value or interest. You encourage folk to look back through my posting history, I'd ask you to do just that and if you (or anybody) else can find any case where you believe what I have written is factually inaccurate then I am happy to either defend my reasons for believing it to have been an appropriate view to hold in light of the evidence available at the time, or acknowledge that I was wrong.

@napth - everyone is entitled to form their own opinions, if expressing cautious views over a year in which sentiment in the sector has been poor and prices have been steadily falling is something you consider unwise, then you have the right to your own views and short term optimism.

I merely find it curious that you attack anybody that expresses a cautious view and by default you fall back to trying to undermine the poster rather than challenge the content of their posts.

I've said before that long term I'm positive about UFO's prospects and happy to keep waiting for evidence of a wider change in sentiment. It's just that over the last year I've read countless wildly unrealistic short term predictions of huge gains that made no sense to me in the face of the negative sentiment and which all failed to come to fruition on account of that negative sentiment.

If people have compounded big losses through buying high and averaging down into a falling market and are now in over their heads, frightened and looking to this board for a morale boost and short term reassurance then I understand my caution won't be good for their mood, but investing shouldn't be an emotional thing. Long term I'm as optimistic as any here. If I wasn't I would have sold out and been long gone when the price was at 3p and I could have left with a x30 bagger.