Member Info for Happyhaddock

@ silverhorse - first they have to make such a big hit, we can live in hope but nothing is certain.

As for lab results we can hope the delays are being dealt with, but a "slow" scenario based upon the last reported delays would put us towards the end of the year before we hear anything about the first EH drill results, if things are getting back on track with new lab facilities then it may be as early as late Sept early Oct we get results. I'd guess somewhere in between, but it may be a third or fourth drill campaign before the management are getting enough of a good idea of what is down there to target something capable of giving us a "surprise" result. Unless of course lady luck is on our side and we just stumble upon something massive.

As implied, a statement that we are now producing for less than we can sell our product shouldn't be seen as great news, it should be the primary goal of any and all businesses to make some sort of profit.

However in terms of SGZ it is a real sign that our new CEO has taken the bull by the horns and is systematically dealing with all the issues he was brought in to deal with. We may only be reaching the point we were supposed to be at at the end of last year, but the fact we are now there is a good sign and hopefully the starting point for now achieving a lot more.

all fun and games with the precious metals markets ... I think it's dangerous to predict anything with confidence about such a crazy sector, but it's hard not to have great expectations when autumn usually does well for PM's and the situation at the moment only seems to be adding potential for a decent move up.

However as I've said before in the range about $23/oz to $29/oz then I'm treating things as just continued volatility within silver's current (artificial?) trading range, until we're out of that range I'm assuming nothing of note has happened and that the status quo remains.

"Just a question of when there is a mkt crash and who knows as you say HH what will happen to PM's."

As someone who has been investing in silver for more than decade I hope I can say the end result for PM's is inevitably much higher prices once markets and fiat trash themselves. However the point I'm always keen to stress is that inevitable isn't the same as imminent. Who knows how long this may take to play out and what convoluted things may happen in getting there.

There are a huge number of far more wealthy and powerful people than me with a vested in interest in prolonging the status quo so I wouldn't bet against mainstream markets going a good bit higher yet whilst PM's continue to be ignored. In some respects I don't mind. The more money that builds elsewhere, the more there will be to flood into PM's when the midden finally hits the windmill.

Regardless of what happens we can be sure that the media will keep putting out stories in which they comment upon that days particular moves and unthinkingly attribute them to some spuriously relevant event of that day. Attributions which show little understanding of the broader picture and the fact most of what they are commenting upon is nothing more than noise within the natural volatility of markets. Something that inevitably leads them to offer the same explanation for moves in the opposite direction a few days later.

Nobody ever writes articles saying PM's make insignificant move due to nothing more than normal trading volatility. To create a story it gets spun out to Gold reaches three day high on afternoon FED spokesperson seen buying two coffees! What is more punters lap up these stories as if they are the word of the oracle.

"This will be the pivot point of the DXY breaking down and money flooding back to the PM sector."

Much as I agree that the Fed's continued creation of lots more fiat currency is bad for the dollar's absolute purchasing power and that this should be good for PM's, the DXY doesn't measure the dollars absolute purchasing power. It measures its strength against other depreciating fiat currencies. With the dollar being the global reserve currency at least some value from the other falling currencies will keep getting transferred into the dollar as the "least bad" fiat. The fact foreigners still keep wanting/needing dollars for international trade is why the US can get away with creating so much more new currency than other nations. Until the rest of the world starts sending dollars back to the US en-mass, America is still getting away with exporting part of their inflation. Effectively the dollar may be the last domino to topple in the line of collapsing fiat. If the FED was "printing" the dollar into to oblivion whilst other central banks were behaving responsibly and having nothing to do with America the situation my be different, but this whole global mess where everybody is printing to oblivion may actually lift the DXY if other currencies fail faster.

As to how the DXY affects PM prices, well theoretically as they are officially priced in dollars, they will respond to changes in the purchasing power of the dollar which as I've just said is not the same as the DXY. As for us in the UK who deal in pound sterling, then theoretically we'd want the DXY to go up to suggest a weaker pound and PMs priced in UK sterling to go up. However even that would be somewhat of a simplification as the pound is only a tiny component of the basket of currencies that make up the baseline against which the dollars value is compared to calculate the DXY, further reducing the link between the DXY and what we here in the UK pay for gold or silver.

I do acknowledge that some people use the DXY as a rough proxy for the purchasing power of the dollar, and this gross simplification can affect some people's sentiment. Yet like so many things in global economics the reality is a tangled web of complex interconnected variables that don't lend themselves to black and white statements. PM prices and the DXY can and sometimes do move independently of one another.

Folks have been saying for a while that production output for iron ore would be increasing over the next few years, especially with some big Brazilian mines coming back on line. It has been the fear that supply growth would outstrip demand growth that has lead some to predict ore prices may keep falling through growing competition among sellers. Though equally there are those predicting rising ore prices too, so there is no consensus as to where ore prices are heading.

To best benefit the price of our ore once we eventually start selling it we would ideally need future global supply to fall.

@smiller - As you imply, on their own grades are meaningless, what counts is grades in combination with area/volume/tonnage of ore.

We know that EH averaged 2,000g/t and topped at more than 30,000g/t which by anybody's standards are phenomenal but in total only lead to a tiny resource and a very small "keyhole surgery" type of mine. Any silver grades measured in the 100's g/t should be economic if suitable for mining in bulk volume, so as you say the grades need to be judged in terms of distance and continuity from the known mine, something that may take several drill campaigns to know for sure.

There is no absolute or finite cut off point at which major miners deem a resource large enough to be interesting enough to want to obtain it, but I'd guess we'd need to grow our 3m oz of silver closer to 100m oz if we want to play with the big boys.

In terms of surprising and unexpected good news to grab the markets attention, we can live in (cautious) hope that there's a lot more than silver down there. It's not impossible, though perhaps unlikely, that silver ultimately ends up being a by-product of mining a different resource of other more valuable stuff at EH, or that EH ends up being an extension of as yet to be found/identified resources at Munni munni.

The whole area is a sweet shop of possible goodies that could thrill or disappoint, but that's what exploration is all about, why so many lose fortunes and why those that do make it tend to make it big!

@deanok - as you say UFO is not short of positives, we just have to be patient and wait for sentiment to return to the exploration sector so that people start looking our way again to notice the positives we have.

Otherwise we'll need an absolute belter of an unexpected RNS shouted from the roof tops to get ourselves noticed, not in itself an impossibility given the work we're doing. Myself I'm holding out for EH results as I think our iron ore, whilst likely to be good is also unlikely to be surprising as we've been talking about it being great for some time now.

The one point I'd add about inflation is the lag between creating the extra cash and more general price rises that make it into official inflation figures that spur on PM's.

PM prices may rise a little on anticipation of inflation from a new infrastructure package, but I suspect we've yet to see the full impact of the trillions already created over the last year or two. Consequently I suspect that there may be some blurring in terms of attributing any new cause to any particular inflationary rise.

As Dip666 has pointed out everybody has different views and expectations spanning from the passionately over optimistic to the frustrated doom mongers.

At the end of the day statistics show that about three quarters of private investors lose money on equitiies by letting their emotions get the better of their judgment. It's also well recognised that the minerals explorations sectors loses billions of dollars a year, but people are still drawn to it by the rare success story or two that goes on to make huge gains.

Combine the two and you have a screaming need for caution and rational analysis.

Bulletin boards are probably not the best place to find such analysis but do offer a snap shot of some of the more extreme views that can contribute to the wilder swings up and down in sentiment that make such shares volatile. Wherever possible I try to offer a counter view to provide balance, which in most cases means pointing out some of the potential negatives which many on the board don't like to acknowledge.

As I've said before I am a patient and hopeful long term holder here and find that keeping my expectations cautiously modest means they prove accurate more often than the wilder views expressed here over the last 12 months. It doesn't mean I'm always right, as the past has shown we can occasionally make wild moves, but more often as not we don't.

I agree that our haulage costs may be a fraction below those of Fenix as the distances do look a little shorter (route planners show it at 457km plus maybe a dozen more km more to get from the road to where our mine will be ), but are close enough to make Fenix a useful comparison.

As you say though the best thing is to wait for the scoping study as that should cover economics and expected profit margins at different production costs and ore prices. Much as I hope I am wrong, I have said before that it looks possible that the gap between production costs and ore prices may be closing in the future, so we have to allow for the possibility our margins may not be so great as Fenix have enjoyed over the last few months.

@Max111 - If we do get some sort of deal with a major like BHP or Rio, then yes we may benefit a little from some of their economies of scale, but equally they will want some sort of percentage or fee for themselves if we end up using any of their facilities.

Much as none of us knows for sure what deals our CEO will make, he has been talking about roads and trucking and so I merely mentioned the fact that a small company like Fenix have much higher costs than the big boys with their own rail lines, and that Fenix claim roughly half their costs are haulage where we are a not too dissimilar distant from port if we are looking at just over a 400km road trip. (I'm not sure where you get 170km from?)

We are all just speculating about future unknowns, I know some like to entertain themselves with dreams of riches which reality always falls short of. As I've said before I prefer to take a more cautious view that looks for obstacles and then hope reality exceeds my expectations.

Well finding gold is better than not finding gold and the two highlighted grades of 8g/t and 2g/t are good, but there were a lot of holes with nothing of economic significance.

A good starting point to be pleased with, but not yet enough to get excited about as you either want some sort of bonanza number to come out, or minor strikes wherever you put holes in order to be confident there's going to be an economic deposit down there. May well still be down there and its certainly enough to justify more drilling, but it's too early days to tell much from today's drill results.

@Max111 - what you say about production costs of BHP being below $15/t isn't wrong, but may be of little relevance to UFO. If estimating our production costs it is worth bearing in mind the small players do not have the same economies of scale and have production costs several times that of the "big boys".

Many like to compare us to Fenix; the last production costs I recall them mentioning were a little under $75/t where just over half of that total were road haulage costs which seem to be increasing as fuel costs go up.

@napth - I don't dispute they are great results and the RNS good news... However for the time being I don't believe we are what the markets are looking for, plus tiddlers on AIM are numerous so have to to shout very loud to make themselves noticed. Bulletin boards tend to reflect the views of a vocal minority, so it is never wise to assume the ideas expressed here will be representative of how the wider markets think about a company, if they think about it at all. Its quite possible that there's a few of us here that spend almost as much time focusing on UFO as our own BOD.

Things will come good in their own time and we know UFO can move far and fast once it moves. When it does I'll be patiently waiting and probably surprised by it, as given the general tone of my posts it will likely happen on a day when I've just advised caution and not to expect too much too soon.

More good progress with our iron.

I hope folks are right in suggesting it will lift our share price today, however past precedent suggests maybe not. The markets aren't that excited by iron, as we seem to get bigger moves on smaller news about silver. We've all known for ages that the iron results would be good, so there is nothing surprising about the numbers today however good they may be.

So I'm with Tufftrader on this that I don't really expect much movement on todays announcement, though I'm happy to be proved wrong.

Silver may be heading in the right direction again today, but I wouldn't read too much in to it.

It's been trading up and down in a range of about $23/oz to $29/oz for about a year. Today we've nudged up a few cents to about $23.60 which is just kind of it's normal volatility and still leaves us at the lower end of this range. As I've said before if it gets above $30/oz or drops below $22/oz the that's the time to assume something has changed.

well nothing to get overly excited about in the drill results, but nevertheless all good commercial grades that should contribute to an expanding resource.

Much as I recognise that the whole sector is flat at the moment, I have spoken before about establishing what is the sector's "normal".

Last year saw prices explode and since then they have pulled back a lot, the issue is are they actually down in the sense of below normal, or simply down in the sense of not up at silly extremes?

The truth is probably a bit of both but I do believe investor's expectations were changed by last years sector wide action such that it now psychologically harder for some to accept "normal" behaviour and pricing.

... Our share price is what it is based upon what everybody else is willing to pay, whether that price is good or bad is subjective depending upon what you think it should be.... presumably the price will go up only when a significant majority think it is too low and start buying.

“I’d rather they drill 15m per day but got 95% recovery of core, rather than 30m per day at 70%.”

Such factors are why I've always been in favour of explorers owning their own drill rigs with their own in house crew. Outside contractors tend to want to be done and on to the next job as quick as they can unless you really hammer home contractually that you aren't paying by the meter but by the recovered meter.

The most interesting minerology often tends to occur in fractures between one rock type and another, the very bits of core that tend to crumble and be lost when drilling at speed. Clearly as a geologist Bill knows this and is is doing what he can to ensure we get useful rock core from a drill program.