Breakwater Resources LTD (fka BWLRF)

[tubberclare]

Bobwins:

I read all the info on the VM board. There is a good summary of Breakwater on Raging Bull, message 279. That poster also copied the pertinent part of that September PR:


The company expects to produce 403 million pounds of zinc in
concentrate this year, 360 million pounds in 2005 and 404
million pounds in 2006. The 2005 production estimate
anticipates the closure of both the Bouchard-Hebert and
Bougrine mines and the 2006 production estimate anticipates
the start-up of Langlois.

Bobwins, I've read your comments about them not selling(?) the zinc concentrate from the Myra Falls mine and I do not understand. The numbers I posted earlier regarding Myra Falls were from that 3rd quarter interim report.

[shadow43560]

Bobwins..If you are calling the company, perhaps they will tell you about the 660,000 shares of stock they got for the mines. Is it restricted etc. Or, can they sell if freely on the open market.

I doubt if they will tell you why they chose to sell the mines, I don't think they are stupid, there must have been a good reason..

I appreciate all that you do for the members of these boards..

[Bobwins]

tubberclare, JustforFun7 found this PR from last fall that partially addresses your issue. Bobwins

BREAKWATER UPDATES FORECAST OF SENSITIVITIES TO METAL PRICES AND EXCHANGE RATES

Toronto, Canada, September 22, 2004 – Breakwater Resources Ltd.’s (“Breakwater”) (TSX:BWR) earnings, cash flows and common share price are highly sensitive to the price of zinc in particular and commodity prices in general. Following the acquisition of the Myra Falls operation, management has calculated the sensitivity of Breakwater’s earnings and cash flow to changes in metal prices and in the US$/C$ exchange rate based on production estimates for 2005.

The following table illustrates these sensitivities.

Sensitivities as reported in the 2003 Annual Report for 2004
(Cdn$ thousands) Sensitivities for 2005
(Cdn$ thousands)
Zinc (US$0.01/pound) 3,010 3,202
Lead (US$0.01/pound) 315 284
Copper (US$0.01/pound) 72 311
Silver (US$0.10/ounce) 174 291
Gold (US$10.00/ounce) 436 725
Exchange rate (US$0.01/Cdn$)* 763 1,342

*When the Canadian dollar weakens against the US dollar earnings would increase.

The Company expects to produce 403 million pounds of zinc in concentrate this year, 360 million pounds in 2005 and 404 million pounds in 2006. The 2005 production estimate anticipates the closure of both the Bouchard-Hébert and Bougrine mines and the 2006 production estimate anticipates the start-up of Langlois.

[Bobwins]

tubberclare, you are right about two mines closing. Myra Falls just produced for q3 so your 9 month stats are deceiving but will definitely hurt production. Will contact company to see what they have to say. Bobwins

[tubberclare]

Bobwins--BWLRF

According to the third quarter interim report on Breakwater's web site they are ceasing operations of the Bourgine mine in August of 2005 (p.9) and the Bouchard-Herbert mine is scheduled to close at the end of the first quarter of 2005 (p.8). Their zinc concentrate production as of the first nine months of 2004 were: Bouchard-Herbert (79,600 tons) and for Bourgine (39,772) for a total of 119,372 tons. Since the total tons produced in the first nine months equals 235,680, isn't this going to greatly affect their production numbers? The Myra Mine only adds 17,404 tons to their production (p.8).

[tubberclare]

Never Mind--read the 3rd Q report. Apparently the big seller has 30+ million warrants at .20. Does anyone have a clue as to how many have been exercised?

[tubberclare]

How many fully diluted shares are outstanding? I thought I read just over 400 million. TIA

[avandalay05]

Bobwins,

Good job you are doing here...

Have you heard of a company called Blackstone Ventures Inc. BLVKF on the Toronto Venture Exchange. I normally avoid Vancouver mining companies like the plague but I had, early on, overcome the same concerns a of a little known Canadian O&G company called TGLEF...and you are very familiar with how that turned out positively ;) At any rate they are focussed on Nickel in Norway. Like you, I like to find trustworth mgt with the right disciplined approach to exploration. Buy heavy and reap the rewards after a good deal of patience.....

Attached is their site, their financials and last press release. I would appreciate it if you would take a look.
Art
http://www.blv.ca/s/Home.asp

http://www.sedar.com/csfsprod/data50/filings/00709422/00000001/k%3A%5Csedar%5CBLVfinst.pdf

http://www.sedar.com/csfsprod/data52/filings/00743309/00000001/k%3A%5Csedar%5CBLVpr205.pdf

[Jim_WI]

Bobwins - Have you spoken with the company re: a date for release of Q4? I see that historically they report in late Feb or early Mar.

Jim

[arnie70]

OK Bobwins,
I like the way it is acting, so I doubled my holdings today,
Keep pounding the table,(could make me rich or broke)
The food in the soup kitchen is good.
I don't mind sleeping on the floor.

[StevenRisk]

Bobwins I think your DD is excellent. Also like the fact that you stick with what you know. Bought some more today and will add more if it drops next week. Will shoot for 25K and like lentinman will sell have after the double. Again thanks and good luck...Steven

[Bobwins]

No, just buy stocks long. Nothing fancy. I am a simple guy and try to stick to things I can understand. Not good at technical analysis, quick trades, typically buy and hold. Selling is my big problem!! Don't sell at peaks!!!

Good luck, Bobwins

[babycakes]

do you trade commodities aswell?

[Bobwins]

Company has been low key but their presentation sure seems to lay out a positive picture for the next few qtrs based on increasing price of zinc. Zinc is still above .61 while copper has slipped today a couple of pennies.

I like these kind of stories where you can predict future profits based on historic production and commodity pricing. Energy stocks are similar.

Good luck. Bobwins

[babycakes]

joined you here. have read your dd. looks pretty promising

[Bobwins]

Anybody that is remotely interested in this stock should review the slide show that the company produced at their website.

www.breakwater.ca/

The slide show emphasizes how important the addition of the Myra Falls mine was to Breakwater. Also shows the sensitivity of bwlrf.ob to each one penny increase in the price of zinc.

One penny = 3 million dollars gross revs.

Zinc was in the mid forties last year. It is now at .628.

.17 X 3 million = 51 million / year or .11eps

[Bobwins]

StevenRisk, this looks like a little secret that should pop up on the radar screen once the mechanics of the zinc price vs Breakwater profits showup in q4 and q1. There must be a big seller that is holding the price down. I would have expected more of a price increase. Lots of shares out. I did find that one institution that had sold 4 million shares.

Zinc is looking good, especially compared to copper for 2005.

Bobwins

[StevenRisk]

Bobwins it appears you are starting to accumualate this. Do you feel that this has the potential to be a double at some point in 05? With the numbers you are posting it appears $1 a share at some point will become a PE of 8-10. I have a few shares and am considering buying more based on the price increase of zinc. Appreciate your most excellent DD.

[Bobwins]

Apparently Cannacord says each .01 increase in zinc equals .01eps for Breakwater. That means q4 should be .02eps and q1 2005 will be .03eps based on avg prices for zinc for the last six months. If they earn .03 for q1 that would mean a fwd eps of .12 vs .575 price today or p/e of 5. Bought some more today at .575. Bobwins

[Bobwins]

Took a look at Breakwater Sedar filing for 9/30/04. They got an average price for zinc of 988/ton or .448/lb. Today price of zinc is hitting .615!!! That's a 36% increase if they could avg that over qtr. Not going to happen for q1 but they could easily avg .55, which is a 25% increase!!!

I'm guessing they will average .50/lb for q4 but good numbers are coming!!

[Bobwins]

zinc supply down, zinc price up to .615, copper up too.

Breakwater finally moving up. +.04 to .585

[Bobwins]

Found out why stock price hasn't gone up

http://www.sedar.com/csfsprod/data51/filings/00728161/00000001/C%3A%5CSEDAR%5CFILINGS%5CBWR2.pdf

Wellington Capital has been selling 4 million shares over the last few months. Everyone always wants big institutional holders but its a two edged sword.

Bobwins

[Bobwins]

Two things I got from this article. 1. China is becoming an importer of zinc in late 2004. 2. Combination of strong metal prices really improved results for Teck. Hoping for similar improvements for bwlrf.ob.

In Feb. 3 VANCOUVER story headlined "UPDATE 1-No expansion plans for world No. 1 zinc mine - Teck"... please read in paragraph 9..."UBS analyst Brian MacArthur"...instead of... "UBS analyst Tony Lesiak". (Corrects analyst's name)
A corrected repetition follows.

By Nicole Mordant

VANCOUVER, British Columbia, Feb 3 (Reuters) - Teck Cominco Ltd. (TEKsvb.TO: Quote, Profile, Research) has no near-term plans to expand production at its Red Dog mine in Alaska, the world's biggest zinc mine, despite the best prices for the galvanizing metal in almost a decade, the large Canadian miner said on Thursday.

Capacity at Red Dog, which Teck Cominco said would produce 580,000 tonnes of zinc concentrate this year out of the 670,000 tonnes the whole group expects to churn out, was doubled at the end of the 1990s.

"We are looking at our long-term plans for Red Dog but I don't see a short-term, that is in the next three to four years, increase in Red Dog production," said David Thompson, Teck Cominco's chief executive.

"To go there again is not so easy. There are a number of constraints. The permitting process can take a long time in Alaska," he told analysts on a conference call to discuss the zinc, copper and gold miner's fourth quarter results.

Zinc prices, a late starter in the current metals price boom, started taking off last year and hit a 7-1/4 year high of $1,307 a tonne last week on strong demand, especially from China.

Thompson said Teck Cominco was seeing "continuing strength" in the zinc market, especially in Asia where China turned into a small net importer of zinc metal in the last four months of 2004. Even though it imported only 3,000-4,000 tonnes a month, Thompson said China hadn't bought metal since 1991.

"All our discussions with Asian refineries indicate that they are now beginning to get inquiries from southern China for zinc... It is not huge quantities but the trend is that they are starting to bring metal in," he said.

Teck Cominco's shares hit a record high of C$42.65 on Thursday, and were last C$1.25 up at C$41.55 in good volumes on the Toronto Stock Exchange after the miner reported fourth quarter earnings that blew past analysts' forecasts.

"An exceptional fourth quarter" was how UBS analyst Brian MacArthur described results from the Vancouver, British Columbia based company, which attributed the nearly threefold increase to higher commodity prices and an increase in the production and sale of copper, zinc, coal and molybdenum.

A flood of cash coming in wiped out Teck Cominco's C$538 million of debt, replacing it with net cash of C$240 million -- a position Thompson said he could not recall the company ever being in.

Thompson would not be drawn on whether the company had any acquisition or special dividend plans for its cash.

"We are obviously looking for opportunities all the time and we have always found them... We really want to have a situation where we don't have to rush to the bank as we did so often in the past to do things," he said.

[Bobwins]

Zinc price soars to 7-year high

Globe and Mail Update

The three-month future price of zinc reached a seven-year high Friday on the London Metal Exchange as a result of Chinese smelter shutdowns.

The cash price of zinc traded at 58 cents (U.S.) a pound on the LME.

Zinc has lagged other base metals like copper and nickel. Zinc traded at 45 cents a pound in September.

The metal could average 59 cents a pound during 2005 as a result of mine supply shortages, Deutsche Bank also said in a report on Friday.

The shares of Teck Cominco Ltd. rose 15 cents (Canadian) to $36.25 on the Toronto Stock Exchange early Friday afternoon and the shares of Breakwater Resources Ltd. increased 5 cents to 65 cents a share.

Zhuzhou Smelter Group Co., China's biggest zinc producer, cut output by one-third because of power shortages. The company accounts for about 3 per cent of the world's output. Another zinc smelting group had also cut production recently because of power shortages. Staff and wires

[JUST 10-11-12]

Plenty of institutions quietly buying this one, MAN!

Keith

[Bobwins]

Zinc will do fine this year and this little stock should get some notice. I like the fact that their various mines produce all kinds of different metals. Diversifies the risk/reward a little bit and zinc looks like it could be stronger than copper due to higher visibility of copper, which is causing more mining expansion and old mines to reopen.

Bobwins

[JUST 10-11-12]

hey, can't believe someone created a post on this one!


Keith