Member Info for Happyhaddock

@smiller - like you my background is in science (albeit many years ago now) and I've had to teach classes and lecture to various audiences of widely different back grounds and experiences from professional academics to the general public and their kids. I've also sat through many scientific lectures and presentations. Some have a natural talent for engaging and exciting an audience others don't, some like the limelight and others don't.

I do agree though that if he's trying to sell the geology to investors he needs to find a way to at least hint at $ potential and spell it out to the many that won't be able to pick through list of minerals and charts and try to figure things out for themselves.

A good interview but you almost hear a sense of frustration in Bill's voice that the markets aren't getting his excitement and that as he goes as CEO he's having to learn how to actually sell why he's excited. To not just assume other investors will know and understand the same as he does, or come to the same conclusions about possibilities he does as a geologist. In some respects I sympathise with him, when you train as a scientist you learn to deal in hard facts, remain cautious and unemotional, otherwise if you publicly jump to unsubstantiated conclusions your academic reputation goes down the drain. Explaining obscure aspects of a complex scientific subject to a generalist audience whilst remaining true to your scientific principles is not easy, all the more so when you have to get them excited about it.

I'd much rather have a geo like BBG in charge that can actually direct exploration than somebody with a background in marketing or finance, but at the same point I can't help but feel, somebody from marketing that didn't understand the geology might find a better way to excite the markets.

"Mother Lode ...?"

Well my primary reason for being in UFO is this possibility, the fact that today's announcement still leaves open this possibility is some way from having proved it or having fundamentally changed UFO's prospects... but it certainly justifies drilling more holes.

@5x5 such high silver grades aren't common, I think what they are saying is that the initial mine discovery was based around these high grade veins, but they have possibly pushed their way through a large but more "regular" mineral body.

Just the good news I've been waiting for, and really nice to see an RNS that actually tries to explain their processes/thinking and help ordinary shareholders understand why they are excited...

No doubt there's much more technical detail that would only make sense to geologists but great to see a company that recognises they have to appeal to investors outside the profession.

I know UFO's Elizabeth Hills is not the same as the Bowden's project, but for folk that don't know this new silver project coming on-line in Aus, they may want to Google a few different articles about it to get a sense of what sort of numbers can be associated with Australian silver mining.

I'm not saying that our geology will be the same, or that EH will turn out to be anything like Bowden's, it is merely an indicator of why I view EH's currently known reserves of 3m ounces of Ag as trivial and nothing more than a huge illuminated flashing arrow on the map saying start drilling exploratory holes here!

In very short synopsis; Bowden's grades are a tiny fraction of ours, but their annual output is estimated to be way above our total known reserves, and this new project won't even be the biggest silver mine in Australia.

I can't control what the drills will find at EH, and many will find more security in our iron, but as I've said before it's not my primary reason for investing in UFO.

;-) ... thought I owed the board a positive post to appease some of the rampers who haven't had it all their own way this last day or two.

"All of us who were in this before last years October 3p+ spike & didn't sell out (including myself) should take a good look in the mirror & ask ourselves "should we really be in this investment game"? "

Well I am one of those folk, as I've said before I first bought in at about 0.1p because none of UFO's potential seemed priced in, at 1p it seemed to be making more sense, at 2p I felt it was looking frothy and decided I needed to start thinking about a price at which I'd feel compelled to bail out. I know my timing stinks and that sentiment can be irrational and change rapidly. As a long term value investor I also felt (still do) that UFO could eventually become a billion dollar company, so I didn't want to be trading out with only one goal of getting back in again, unless the whole situation just got plain stupid. I decided that if we got to 4p without major improvements to the fundamentals then I'd have to reluctantly quit. Otherwise I'd simply ride out the turbulence if we had a bad six months or more of watching the share price drop back below 1.5p.

In spite of expecting the fall I've been surprised at how far we first climbed and have since fallen, plus how long we have been on the downward slope. That said when sentiment's pendulum swings massively one way, it does tend to overshoot when going back the other way, maintaining enough momentum to probably massively over shoot a second time on the way back where it came from.

Given that volatility breeds fear, which exaggerates volatility, I think we need to prepare for a rollercoaster of a ride over the next year or more until we can start to inject a bit more rational stability and absolute numerical data in to expectations.

Whilst I never rule out the possibility of placings with any junior explorer at any time, given that UFO shouldn't be desperate for cash I'd assume they want to try get out some good news and lift the SP before thinking of another placing. We've got enough going on that you'd hope that there should be some good news in the near future.

Much as I'm surprised to see that the SP hasn't held a larger gain on todays news, we do have to ask what is fundamentally new as a consequence of it?

The same folk are doing the same work on the same ground, just with a different logo on their shirts and paychecks. The only folk likely to have bought in today were those sitting on the sidelines who previously doubted that this venture might not continue, but was there ever really any doubt that our partners might really pull out?

If we see a significant SP increase it may be slower burn if the stability starts to attract institutional investors. If not I think we can still expect things to keep moving forward and SP to tick up with future drill results.

@chris2 - much as I agree that there are some here that are overly optimistic and others that respond angrily to any mention of a possible downside, rubbing people's noses in their own failings isn't the most helpful even if I understand the frustrations of having to put up with repeated criticism for having a view that doesn't align with other people's hopes.

Plus for any long term holders UFO still has some great potential (with the caveat that no junior explorer comes with guarantees). After all a low price today is only a problem if you intended selling now.

"I haven't been investing for long but it seems clear that gold miners rerate when they unambiguously find and prove up a lot of mineable gold."

Sentiment and a good narrative can move a share price up a lot but it can equally swing back down again for no reason other than folk being fickle. The biggest re-rates come from unexpected discoveries. When things are expected and talked about a lot in advance, some of the growth invariably comes in advance of formal confirmation.

ECR is a company where many seem to feel a big find is inevitable, and where the apparent confidence of the management adds to the strength of that story. However the share price is twitchy with folk trying to get in early to pre-empt any big announcement and traders selling to take quick profits assuming they've time to get back out and in again for a few more trades.

@picku - cheers for the vote of confidence.

@5x5 - don't worry a few negative personal comments won't shut me up.

I've said many times I'm here because I'm interested in the psychology of other investors. This bulletin board can only ever give a snap shot of a few of the most vocal individuals but we've certainly got some interesting characters here whose behaviour maybe explains a little about why stocks on AIM can be so volatile and why their share prices move irrationally.

it probably too early to be sure, but the last week or so has just started to hint at a first glimmer of optimism in the minerals exploration sector after a pretty depressed year, with various shares moving up a little without any obvious or direct news statement to justify their gains.

lets see how OMI does over the next day or two and if we can sustain any gains or if we have to wait a while longer for a meaningful and sustained move.

"I really don't think HH is a troll, he's just a VERY pedantic and ultra cautious old fellow, finding it quite interesting to see two silver bugs like him and Max with opposite personalities posting here."

I'd not disagree with being called very pedantic, and I can see why the tone of my posts would lead others to assume I am ultra cautious. However, if it's not being too pedantic to say so, I don't think you can invest in junior explorers if you are cautious. You need to be an optimist, maybe even a dreamer to take the chance and accept the high risk. I just feel you need to deliberately, and if need be uncomfortably, challenge all of your own expectations all of the time if not to lead yourself astray.

At heart I'm not much different to Max or Napth which is why I have to work hard to keep my expectations in check. So if all goes the way I hope for, maybe even expect, precious metals will be heading much higher in response to an ever growing list of crises in the global economy and several years from now UFO will end up a multi-billion dollar company. However, when all is said and done the markets don't care what I hope for or believe and I've only myself to blame if I expected something that doesn't happen. So I try to separate fact from narrative, prepare for the worst yet keep hoping for the best.

As for Max, I don't believe he is any kind of dishonest ramper, just an eternal optimist out to challenge anybody like me who puts forward any downsides and keep me on my toes.... perhaps at some point we could agree to switch sides and take the opposing argument for a few days and collectively silence our critics by doing so!

@ carpfisher - just for the record, you keep mentioning EUA but I assume you realise this is the UFO board?

I'll support you on that one 5x5 only so much of my caution this board can take on a Monday morning, so I think we can all agree that the potential UFO has is significant.

I also predicted months ago that I thought that we may have to wait until autumn before we finally saw a bit more of a positive move in UFO's share price, so let see what the next three months bring us all.

@ napth - Over the last year I've posted mainly on UFO as it is my largest equity holding, but I've also posted in various other junior explorers I am invested in. In almost all cases my posts have tried to provide balance and counter the irrational exuberance of folk predicting huge immediate gains.

The minerals exploration sector is normally volatile, progresses slowly and typically loses billions every year; hence many fearfully avoid it. Primarily it attracts speculators with wild dreams of that rare exception of a company that is just about to make massive gains. The pandemic made the later part of 2020 a time when the good, the bad and the ugly of the sector all spiked to unjustified highs. Rather than frightening away folk, the very high prices attracted in many new people whose only experience of exploration has been the subsequent drop back down in 2021 as most of the sector returns to "normal".

If you believe 2021 has so far been a good year for share prices in the junior exploration sector then it may be that you feel my caution over the last few months has been misplaced.

If the tone of these bulletin boards changes to predominantly negative I will try to provide balance by highlighting the positives, if the prevailing direction of the sector changes to being far more bullish, there may be less need for caution. As it is 2021 has been a time of falling share prices and ever more desperate sounding optimists making ever more outlandish predictions.

Some of these optimists are polite likable folk who will simply challenge any facts they disagree with for being too "pessimistic" . Many simply retort to personal attacks and accusations of de-ramping whilst continuing to put out their over optimistic and unsubstantiated one liners.

Whether people agree with my views or not is of no great concern to me, I've always been a contrarian, and in a market where statistics show that the majority of private investors lose money that may be no bad thing.

@smiller "HH until we see a mre and feasibility study we all just making educated guesses but at least we know the project is bound to be profitable otherwise they woulsnt be pushing it along"

I think that's a common mistake many make, the whole point of early pre-feasibility studies is very much to assess if a project is likely to be profitable and worthy of a more detailed economic assessment. Clearly if the management believed it wasn't going to be profitable then they wouldn't be pursuing it, but that is not the same as knowing it will definitely be profitable.

The junior exploration sector is full of great stories that never go on to make any profit. I'm invested in UFO because I believe it is one that will. However this is a risky sector where there are no guarantees, and where the majority of private investors lose money. I understand human beings are emotional creatures and want to be optimistic about their investments and want to believe in a good narrative, but that optimism has no bearing on the harsh realities of economics. Like everybody here I hope things will go really well for UFO, but whilst others only focus on the upside, I like to provide balance by also mentioning possible downsides, otherwise these bulletin boards just become an echo chamber of confirmation bias.

as Dipp has said, and as I myself said in the opening post of this thread, I'll be interested to see how any mathematical study models future costs and profits margins, as only then with a pre feasibility study will things become a lot clearer.

@Max - I don't dispute that new technology can be a game changer and that electric trucks, and ultimately electric heaving mining equipment will eventually make a difference... however all these things take time.

The major stumbling block for electric road vehicles at the moment is re charging, the infrastructure isn't numerous enough or fast enough, and is still incredibly expensive.

Major city centres may well end up with many recharging points, but I suspect building our own in the middle of the Australian outback for a fleet of electric trucks may be a step too far for a junior miner, as might developing/acquiring electric excavation equipment which is where statistics suggest typical miners spend most money on fuel. Until we know otherwise I think it prudent to assume most of our energy costs will be diesel.

@smiller - I hope you are right that some sort of profitable deal may be possible to utilise a rail hub, but much would depend upon costs/ minimum quantities and additional handling fees for unloading/reloading/interim storage. I am assuming there is a reason that Fenix decided road haulage was their best option as small producer.

I know folks here are most interested in the upside and how it might drive up UFO's share price but I think it important to consider all possibilities in order to make educated judgements. I wouldn't be invested here if I didn't believe in UFO's potential, but I like to plan for the worst whilst hoping tor the best... I want to see a lot more data and official projections before accepting that the Sirius extension is going to be anywhere near as profitable as many here seem to assume.

I know some here accuse me of de-ramping whenever I discuss "downsides". However, the major iron miners enjoy very high profit margins that can absorb rising production costs and falling ore prices, but with the smaller players having production costs per ton of four to five times higher, they may not find this as easy.

Over the course of the pandemic the price of >63.5% Fe DSO ran up from $80/t to more than $225/t and then fell back. Forecasts for the next two or three years remain conflicted, but the more pessimistic suggest supply growth may exceed demand growth pushing prices below $80/t. Myself I don't expect prices to fall much below the current price of about $140/t. We keep hearing how haulage costs are increasing due to growing staff wages and the rising price of diesel. At the start of the pandemic crude oil prices crashed but have since risen by as much as $75/barrel, where possible future "green" taxes are unlikely to help miner's operational costs.

I have been trying to define how strongly a miner's excavation and haulage costs are dependent upon fuel costs. Statistics suggest wildly different figures but depending upon circumstances it seems that about 40% of the typical metal miner's excavation costs may be energy related. Whilst the following figures surprised me to the point of doubting them, apparently only about 25% to 35% of typical haulage costs are fuel related.

Many have used Fenix as a model for how our own Sirius extension may play out, yet they went into production when crude oil prices were about a third lower than today, and when iron ore costs were spiking to a massive high. They quote that just over half their costs are for road haulage of almost 500km to port, where UFO will face a similar haulage distance of more than 450km to the nearest port. Fenix's last data suggested that their costs were below $80/t at a time that their sales locked in high prices averaging $180/t generating profits of around $100/t.

We don't know how closely Fenix's current fuel costs may have moved up in line to mirror crude oil price rises. We can only guess at what UFO's future costs may be. However it is not implausible to suggest that if Fenix's costs were near $80/t earlier in 2021, our costs in 2023, or whenever the Sirius extension goes in to production, might well end up above $100/t.

Whilst improbable, I do not think we can ignore the possibility that future ore prices may fall below small producer's rising operating costs, necessitating a JV with a major partner that can absorb our iron ore into a larger more economic process. Regardless I will be interested in how any mathematical study for UFO chooses to model different oil prices and ore costs along with the "comfort zone" this gives within any projected future profit margins. If UFO do set up the Sirius extension as an independent small mine I'm expecting profits well below the $100/t that Fenix last quoted.