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Well.........:
5. To be fair, of those four customers listed, only one was located in Inner Mongolia (Baotou) whereas the other three were located in Tangshan (on the eastern coast). His bigger point was that, by virtue of having to sell through middlemen all the way from the Mongolian border through Inner Mongolia to Tangshan, MMC is forced to accept a more discounted price. He thought in a more normalized pricing environment (e.g., no supply disruptions in Australian coal country), MMC would have trouble generating much of a gross margin on their sales. In other words, he didn't think they could price their coal much higher than their fully-loaded cost per ton of $60.
All goes through Inner Mongolia. I just posted the most current price paid there(900). Further..how does MMC have more of a disadvantage than other mining co's there(Mongolia)? And finally......you have their average selling price vs cost currently. So?...."In other words, he didn't think they could price their coal much higher than their fully-loaded cost per ton of $60." .... um...you have/had the numbers reported.....so not following these "fully loaded" costs...what are those?
Well.........
So here we go:
3. He has no idea when a TT deal would get done, but indicated that "not in our lifetimes" would be the odds-favorite.
That is horse sht'...but I get the sentiment. Not going to even attempt to argue the sentiment...but what is important is "talk" of such railway.
4. Even though MPP has control of Parliament, it is not a united group. Furthermore, there were plenty of Russian-loyalist MP's who would do everything in their power to block a TT deal involving China.
The MPP is the oldest party...so yeah. But that just isn't the case. If such was the case...where is the bid from a Russian Corporation........as such.....MMC will..or would be involved no matter what.
5. He thought MMC was uninvestable until a railroad got built -- which, again, he thought would be never -- because the target customer for MMC's HCC is located near China's coast, as opposed to the"death by a thousand paper cuts" of getting your product through countless shady middlemen in Inner Mongolia on its way to northeastern China.
????.yeah.I get the railroad...and agree for the most pasrt..but what the hell is this...and explain me me how he derives his spit on such:?
I do not think he knows as much as he thinks he does. To be honest with you.......I am about to rip it to shreds(for the most part).
Let me be specific:
1. OJ is in personal bankruptcy (his levered bet to Mongolian residential and commercial real estate backfired, and was compounded by DP party retribution after 2012), and he has pledged his MCS stake in MMC as collateral.
Any pledge of shares...whether a loan provided to MCS or any other situation...et al....that is pledged in shares of MMC must be disclosed. It is disclosed via a short position.
2. My contact was very skeptical of our having any kind of investment edge in this case. He said that long-time Mongolian coal industry insiders who are close to the story don't even have the visibility to handicap the odds.
??......that is just plain nonsense! He is sounding like an idiot given the obvious "visibility".
Then have you checked the "disclosure of interests"..recently?
http://sdinotice.hkex.com.hk/di/NSForm3A.aspx?fn=198266&sa2=an&sid=50000562&corpn=Mongolian+Mining+Corporation&sd=07%2f10%2f2016&ed=19%2f12%2f2016&sa1=cl&scsd=02%2f05%2f2016&sced=02%2f05%2f2017&sc=975&src=MAIN&lang=EN&
?....before I answer anything....and believe me.....I will.
Are your referring to Od ... or Odjargal.
That's due to the Holiday schedule coming up. Probably see extremely light volume on Monday night.
Weird stretch being closed Sunday night(eastern time)...open Monday night....then closed Tuesday night...yet again.
! "With Mongolian washed coking coal traded at the border crossing dropping three times to 900 yuan/t since February, as much as 32 enterprises were engaged in coal import business at the border crossing."
That's @USD130.00
ref: http://www.sxcoal.com/news/4555294/info/en
I'm on fire with my numbers...:
". in line with the coking coal market rebound in the second half
of 2016, the group’s asP for hCC reached
Usd92.8 per tonne in the second half of
2016, compared to Usd52.2 per tonne in the
first half of 2016, representing an increase of
77.8%"
http://www.mmc.mn/upload/2017-04-27_e101.pdf
That's part of it. Listen..in harsh winter climates(cold!)....it's not that the ground is hard......it's that equipment. Steel is very brittle....so when it is extremely cold........you do not want to run machinery...or at the least......very little.
I am not talking cold..but bitter cold. For example.....Australia does not know what that means...as in...cold.
They do know what cyclones are though...;)
No..keep it simple...you get half the product after ROM is washed......the guidance is conservative. It was winter!
"Perhaps the CFO was giving my contact ROM guidance, as opposed to washed HCC sales volume guidance?"
ROM coal processed was 1,547.8 in the first quarter. If they were ramping up to 400k late march..well.........that is finished product!... :)
400k per month equates to a remaining 3600000
3.6 plus 800k equates to 4.4 million
It's a perfect number!....go back to the CFO telling your acquaintance that the Company was ramping up to around 400k Mt late march. This is incredible news on many fronts!
I have no doubt we will have to be wait until September to see the numbers!.........we will see them @ the end of July!
For my own sake.......my math is working........so............bam!
!!There you go friend!....now they are letting us know quarterly....looks like my first assumptin and my second assumption were pretty damn close!....right in the middle!...:
798.1 HCC sold! ... first quarter
http://www.mmc.mn/upload/2017-04-26_e_00975ann-20170427.pdf
Some poor soul dumped too much today!!!!! ha!
I looked @ MEC.....passed..but is on radar. Betting on Mongolia as a whole is my play.
Woah!....for South Gobi only.....jeesh..sorry.
"Further!..raw coal exports have been suspended by China....unknown time span. "
I believe it was just "safety" related...so should be short term..very short.
Scratch South Gobi.....not commenced yet....just trials.
Just found 232k of clean coal sold/exported in 2016(200k in the first half of 2016) ..MEC...it was dry washed....and shipped.....to be processed further!.
Khushuut Coal Mine!
http://www.mongolia-energy.com/website/MEC/cms/upload/report/pdf_en/2016Interim_e.pdf
Further!..raw coal exports have been suspended by China....unknown time span.
I suggest South Gobi etc...as well
And there you have it :)...a part of that is!
Yes....also.."What is the basis for assigning them a $97 ASP? What is a CHPP? And wasn't MCC's 2013 washed coking coal 4.3MT rather than 5.3MT?"
I have too many notes...here it is:
Well..I think I just figured it out regarding those washed HCC numbers. I am basing it on MMC's lack of production/export against others ramped' up production/export. Maybe the "other" was much smaller CHPP's that were at maxed cap. Maybe MMC is running closer to 80% plus for that first quarter at 916 thousand plus
If such....minimal would be a rough 88 million @ASP of $97(one example) first quarter.
I have too many numbers relating to..."too".....many things on several plus pages of legal. Just caught a note were 2013 was 5.3 Mt washed exported. Ha!
I still can only find two "real" wash plants currently...and one is more domestic.
With regards to such stated:
"1. Lingering stock price weakness may be the result of the street not liking the reported FY 2016 numbers. According to him, MMC didn't start producing until summer 2016, which led to the sloppy FY16 results."
Then the street is very ignorant. They exported half a million during the last six months of 2015...and mirrored that in the first half of 2016(600 th). There was no market at all...not to mention open discussions started in Jan 2016 leading to the provisional liq during the summer.
"2. He thought 2017 guidance was excellent and conservative: volumes of 4.5MT, costs of $60/ton, current prices at $120 = ~$270M in EBITDA."
Again...that completely mirrors my cheat sheet...2013 annual with regards to export(4.3mt in 2013). The CEO suggested around 50...so that makes sense.
"3. He's spoken to the CFO who has indicated that MMC would be near 100% capacity (7.5 MT) in 2018. CFO also indicated that volumes in late March seemed to be running more like 400k/month, so he thinks they hit closer to 5MT in '17."
That is my frustration...because I can not my head around those HCC washed exports.
"4. Earliest timing for ETT deal is summer/early fall. His line: "It's Mongolia, they're habitually late with everything.""
To me ..that seems overly optimistic/aggressive. My timeline, as such, is Spring of 2018 at the "earliest". In the meantime....welcome all noise/news of such(if positive).
"5. Border is being changed from bilateral (8 hrs/day) to international (24 hrs/day), so big bottleneck opening, which will help with cash conversion."
I did not know that...will research such...good news.
I am going to reply to most of those points....but first I need to mention my "cheat sheet" guidance. I refer back to the 2013 annual(MMC)...and average price of $147Mt for that year.
I also discount a rough 40% to any current bench price/average to get MMC's selling point on HCC.
I have one issue though....the washing of coking coal related to exports of washed HCC. It's not adding up...and I am getting very frustrated.
Now ...I am going to have a few drinks..etc...and hopefully reply to those numbered points individually......a little later.
Well......I didn't own it til September...so I'm new :)
More importantly.....I have a loose figure of 710,000 Metric tons exported out of the total of 1,145,672 exported by Mongolia of washed HCC in the first quarter. I am not sure who else is washing besides one other player....or if MMC is washing others.
Based on a rough 1.46 million exported out last half of 2016 by Mongolia compared to MMC's export sales of 900,000(rough 62%).
What's your ASP opinion?..... and am I too low...etc? Am I missing anything...because I am banking on USD75mill for first quarter minimal.
Either way...if all remains fairly static to the upswing in capacity......that interim will blow away those not paying attention....or simply unaware.
I'm going back and clean up the numbers over the weekend....but anything you see..let me know. I had to search/research the hard way...and my eyes are bleeding currently
You did misunderstand....I am talking about something completely different...more on the investment side of the equation. Not Governmental.
I totally get it here:
"I'm just dismayed that what I considered to be positive catalysts (IMF bailout, restructuring completed, coal prices recovering) have not only not led to favorable price action, but have also not tempered stock price weakness. It has forced me to second guess and re-examine my investment thesis. "
That's how it goes apparently.
I forgot about this....:
"Is it outside the realm of possibility that HK traders are simply reacting to the 9% move up in the OTC listing earlier today"
If the HK scene went wild over $1000 spent today on the OTC....then I am getting the hell out of this tomorrow.
...I am on a four year plan(3 year, 4 month currently). My frequency may be different than yours.
Trust me..I'm tempered. We should break that 3 month volume peak. And remember...I bought in September originally..and have adjusted accordingly.. :). Not always that perfectly though .. ;)
I disagree as much as I agree with you. This Company had a market share of "a tit" over 30% going onto 2014. What was it last year...7%? The Chalco debt was a burden on the Tavan players...and a burden with regards to the Country(state company debt)...as all other debt.
Market forecasts into 2020 suggest a stable price(woah..average is better suited) of USD140-150 per Metric Ton. As you can see currently..the market is apparently reacting to the IMF conclusion....as we have just gapped' up intra to 13% plus.
The upside to this play is the debt replay..et al....Mongolia.
My question to you.....who is the biggest Mongolian Miner in the nation...that is also listed on the HK exchange and has a ADR placed here(OTC). Not state owned..be it foreign...but Mongolian owned.
Only one.....so be it....irrational exuberance will come in handy on the back end of this one.
Remember when you mentioned how you were surprised(or similar) that the IMF deal didn't have the impact you thought it would.
Maybe it is now.....given this:
via Bloomberg....
Mongolia has fulfilled prerequisites from the International Monetary Fund to receive a $5.5-billion bailout and is expected to receive an initial tranche of cash at the end of this month
Or maybe....it's just real money getting it.
Yeah....I think it's just time. Look......we are not crazy...or irrational with regards to what is happening. Check out Bloomberg...Mongolia met the conditions for the IMF deal.
https://www.bloomberg.com/politics/articles/2017-04-19/mongolia-clears-hurdles-needed-for-5-5-billion-imf-led-bailout
As I said before...that CHALCO debt was a very big deal!
http://af.reuters.com/article/energyOilNews/idAFL3N1HK3RB
The increase was driven by a 446 percent surge in coal trade, which reached $541.3 million over the period
If you are looking to buy into something.....now is the time .... for it's breaking through two..and three is a charm!
....or pause and wait .. :)
Both work..
I would answer with..."what traders?". Not saying the volume was dynamic beginning of January.....but look at the drop off starting with mid-Jan.
And don't laugh at my chart.....wasn't trying to be fancy....ha!...just simple. The mentality of followers is just that...they follow. When no one is there to hold their hand..they move on and follow again. Those are the smallest of the small and are evident here. I am on a longer frequency...so it's not that bothersome to me.....but it is irritating as to "what is" versus "what is not". I don't think many small timers(as I am one) understand "what is". For example,when this company filed a Chapter 15(3/23)...someone actually sold down to .026(a small amount..but..). Apparently that follower did not have a clue what that filing meant.
On another note....any guess on how much revenue this Company made the first quarter? It's going to be hard to have to wait til the interim.
I am not expecting that....or maybe I should say that I didn't know that. I'll just stick at that 2013 price given the 140-150 range mentioned earlier(safe bet). If that price is as you mention ... yippee yi yo ki yay!
I believe that the Company is very straight forward...:
"His response to the Tavan Togloi questions also don't seem all that encouraging. Hopefully, he is just being cagey, although I suspect that the negotiations don't look all that promising right now. "
Answer..:
With regards to this....:
but he isn't including the $195M perpetual note in his calculations? Why?
Given that it is "perpetual"...it is treated as equity instead of debt. I believe ..that is.
On another note..with regards to this:
"Last year, China imported 23 MT from Mongolia (according to MMC) and MMC had only 6% market share"
MMC is/was in provisional liquidation. Besides the crap coking coal price, there is no way they would even attempt to "make money".
I've been there personally....was about to do a ch 7 after one full year(plus) of moving money and not making money. One bank screwed up and showed a rough 100k in my name. So I went another route and stayed as small and quiet as possible for a few years after . And of course that beginning of hell was during 2008/2009. All good now because I followed the law..didn't screw over anyone.
I was honestly looking @ 6 million washed...so we are not that far off there...eh?
Ha!....23.6 to be precise. I am actually currently running over the numbers again tonight. Look at 2013....:
-15.4 imported by China..MMC's revenue of washed coking @ 392k annual
-Coking coal expected to be stable @ $140-150 mt through 2020
-average $147 mt during 2013
...from the man...:
- Is it possible get the Ukhaa Khudag enrichment plant running at full capacity this year?
- We have been trying to conduct operations without any interruptions. Even though production and exports have declined due to conditions in the market, we will get the factory to run at full capacity this year. We are aiming to reap the benefits our investments now, so we will focus on restoring and accelerating activities in 2017.
ref: http://linkis.com/mongolianeconomy.mn/fmMbP
I hear ya!....