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DFR--Backed up significantly last few trading days. At current price paying a 20% annual dividend I think will be sustainable--even with the post acquisition share count. I think weakness reflects tax loss selling as it is trading at half its high this year. Come the new year moving toward the dividend record date, I expect the share price to move up sharply.
ZHNP-Lentinman. Perhaps this deserves to be in your Chinese food stocks index. I had on my watch list but have never owned. Seems fairly--but not cheaply--valued. Should see nice pop today.
Zhongpin Approved to List on the Nasdaq Global Select Market
Wednesday December 26, 8:00 am ET
CHANGGE CITY, China, Dec. 26 /Xinhua-PRNewswire-FirstCall/ -- Zhongpin Inc. (OTC Bulletin Board: ZHNP - News; "Zhongpin"), a leading meat and food processing company in the People's Republic of China ("PRC"), announced that it has received approval for listing on the Nasdaq Global Select Market.
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Zhongpin plans to start trading on the Nasdaq Global Select Market from December 27, 2007. Nasdaq has reserved HOGS as the trading symbol for Zhongpin's common stock.
"We are extremely pleased to be approved to list our common stock on the Nasdaq Global Select Market," commented Mr. Xianfu Zhu, Chairman and CEO of Zhongpin. "Having our common stock listed on the Nasdaq Global Select Market is an important part of our goal to increase our profile in the international markets as we help advance the modernization of China's meat processing industry. We believe that our listing on the Nasdaq will increase our visibility and liquidity as well as expand our pool of investors."
About Zhongpin
Zhongpin is a meat and food processing company that specializes in pork and pork products, and fruits and vegetables, in the PRC. Its distribution network in the PRC spans more than 20 provinces and includes over 2,800 retail outlets. Zhongpin's export markets include the European Union, Eastern Europe, Russia, Hong Kong, Japan and South Korea. For more information, contact CCG Elite directly or visit Zhongpin's website at http://www.zpfood.com .
KCL-I read all the posts here with interest. Didn't see any discussion of the permitting process. Any potential stumbling blocks there?
DFR--Up 20% today on massive volume. Sure it will retrace a lot, but still great to see others share my enthusiasm. I hope some of you were inspired by my prior posts to invest. My largest holding has driven my portfolio to a new all time today which is an awesome way to end the year. Even at today's price, DFR pays close to a 20% annual dividend which tells me it could very well double from here in the next 6 months.
DFR-Huge news day yesterday and stock up big. They reached a definitive agreement to buy out Nelson Peltz and consolidate their management company. They also announced (after market closed) dividend of .42 for Q4 payable in January. They didn't officially guide for Q4 results but did say that their portfolio spreads had widened to 91 basis points which increases ongoing cash flow. Seems more and more likely that they can hold--and eventually increase--the annual dividend which even after yesterday's price rise is still higher than 20%. It is my largest holding so I'm pretty excited and hoping/expecting another big day.
Or maybe rank all the stock picks by $ trading volume and use rankings to rank each contestant.
Congratulations to the winners and thanks to Sskillz and Lentinman for all the hard and high quality work tracking and reporting. I really do get invested in my relative standing and get excited and bummed out when my picks go up and down--especially since I have always owned most or all of my picks in real life. It felt good to win the last week and end up 18th in the contest especially since 1)my picks reflect my bias in real life to invest in higher market cap stocks with higher $ trading volumes on higher exchanges and 2)I have only done 1 or 2 trades in the history of PSL consistent with my "hold and mold" investment strategy in real life. I realize going in I'm not "playing to win" which may seem like an odd way to participate, but I am most interested in seeing how my real life strategy performs over 13 weeks against the shorter term trading strategies of expert stock pickers. For this contest I had 3 NYSE picks(BX,DFR,EGY),2 NASDAQ picks (HRBN,FSIN) and CML.V. In real life I don't own BX or EGY but the others make up a significant % of my portfolio.
I think the minimum trading volume requirement that was imposed clearly makes the contest more reflective of real life investing. As the $ size of my portfolio has increased, there are still many stocks picked in this contest in which I couldn't take any meaningful position given the very small average dollar trading volume. Given all the statistics you guys generate, I would ask you to consider for the next contest ranking each participant at the beginning of the contest based upon the average $ trading volume of his picks. One issue would be whether a very large cap stock (like BX above) would skew the results. There could be some cap imposed or perhaps stocks could be assigned a "1" through "5" based on average trading volume. I realize it's easy to think of work for others to do, but this would be particularly interesting to me, and I thought others might appreciate its relevence as well. Also, it only needs to be done once at the beginning of the contest.
Whether or not you take up the idea please know how appreciative I am of all the enjoyment and learning you have provided me by sponsoring the PSL tournaments.
AWRCF--They make wire. When they get their financials up to date early next year they will be showing annual revenues of well over $300 million and currently have a market cap of around $60 million. FSIN makes wire and has annual sales of approx 1/3 of AWRCF and a market cap close to $600 million. On a revenue basis, FSIN is valued 30 times higher than AWRCF. Of course, there are a number of reasons FSIN should command a premium valuation and AWRCF should trade`at a discount, but not 30 times!!! When the financials are filed and 2006 shows EPS of at least $1, don't see how the share price doesn't quickly double to $10 at least and $20 wouldn't be unreasonable at all.
AWRCF--They make wire. When they get their financials up to date early next year they will be showing annual revenues of well over $300 million and currently have a market cap of around $60 million. FSIN makes wire and has annual sales of approx 1/3 of AWRCF and a market cap close to $600 million. On a revenue basis, FSIN is valued 30 times higher than AWRCF. Of course, there are a number of reasons FSIN should command a premium valuation and AWRCF should trade`at a discount, but not 30 times!!! When the financials are filed and 2006 shows EPS of at least $1, don't see how the share price doesn't quickly double to $10 at least and $20 wouldn't be unreasonable at all.
HRBN--Has officially been discovered w/ another record high and volume already well above daily average. The tricky part is trying to determine a selling price as they "guided" for massive revenue increases by 2010. Any views on what the stock is worth would be appreciated. I have owned for 3 years so don't want to get overly attached.
HRBN-2morrow. Over $20 now to a new all time high. It is encouraging to see volume way up over the last few days--especially in this choppy market where many US microcaps (not to mention Canadian miners) seem to be getting slammed. Not sure how U.S. listed Chinese stocks have help up generally during this recent correction, but HRBN and FSIN (2 of my 3 Chinese holdings along with my "problem child" A W R C F) have bucked the tape and hit new highs.
FSIN--Hit a new high a few minutes ago which I think is an impressive feat in this market. I think they spoke at the Roth conference on 11/30 and there was a spike in volume on Friday and again this am. Somebody likes their latest pitch.
CVCP--The last PR reported .03 (unaudited) for 9 months. No guidance for profitability going forward. Not clear what their margins are given their fast growth and heavy equipment needs. Especially given the heavy dilution to date and the less than professional public trading debut, don't see how this should trade at a high PE. When it starts trading again, don't see why it should be valued at more than .50 per share until they can demonstrate higher EPS.
FSIN--In contrast to HRBN, FSIN posted very strong sequential increases in revenues and net income (not driven by recent acquisition that closed in 4th Q). EPS of .33 and gross margins of 33%--very impressive for a wire maker. Guiding for $1.50-$1.60 EPS for calendar/fiscal '08 compared to $17 share price (after trading up to intra day high yesterday). Very well managed, great balance sheet, great growth prospects, great margins for specialty products, NASDAQ listed, trading at just over 10 forward PE based on 08 guidance. IMO, very good chance to trade up to 15 PE over next 6 months as a reasonably priced, professionally managed China play. I think a good risk/reward in a scary market.
Fushi International Reports Third Quarter 2007 Financial Results
-- Revenues Increased 147% to $32 Million in 3Q07 ---- Net Income Increased to $8.2 Million, or 25.7% of Revenue --
DALIAN, China, Nov. 14 /Xinhua-PRNewswire-FirstCall/ -- Fushi International, Inc. (Nasdaq: FSIN - News), the leading global manufacturer of bimetallic wire used in a variety of telecommunication, power transmission and other electrical products, today announced financial results for the third quarter of 2007.
Q3 Highlights
-- Revenues increased 147% from last year to a record $32.0 million
-- Gross margin improved to 32.9% from last year 30.9%
-- GAAP net income increased 472.8% from last year to a record $8.2
million
-- Fully diluted EPS of $0.33 (year-on-year increase of 423.5%)
Key Financial Metrics:
(All numbers in USD millions, except per-share amounts)
Q3 2007 Q3 2006 % Change
Revenue 32.0 13.0 147.1
Gross Profit 10.5 4.0 163.3
Operating Income 8.7 3.1 184.3
Net Income 8.2 1.4 473.8
EPS - Diluted 0.33 0.06 423.5
Revenues for the third quarter of 2007 increased 147% to $32.0 million, from $13.0 million in the prior year's quarter. Revenues in the quarter were driven by a higher average selling price and higher sales volume, higher copper prices, strong market demand, and new and expanded product applications. The average selling price improvement year-over-year resulted primarily from the increase of raw materials, particularly copper prices. Coaxial cable accounted for approximately 59.5% of sales; magnet wire for about 19.1% of sales; and braided wire for about 16% of sales. Flat wire, which the Company began shipping this quarter, accounted for 5.3% of total sales.
Gross profit increased by 163.3% year-over-year to $10.5 million. Gross margin of 32.8% was up from last year's 30.9%, due to improved product mix and gains from the fluctuation of copper prices. However, margins were down sequentially from 37.0% in the second quarter as current inventory costs increased as a result of higher raw material costs.
Operating expenses in the third quarter increased 94% to $1.8 million compared to $0.9 million in the prior year period. This increase was primarily a result of higher general and administrative expenses associated with the compliance of Sarbanes-Oxley. On a percentage basis, operating expenses decreased to 5.6% from 7.2%, as the company implemented cost- containment measures. Also included in the general and administrative expenses for the third quarter of 2007 was share-based compensation expense of $241,921, which was equivalent to 0.8% of net revenues.
Net income in the third quarter increased 473.8% to $8.2 million, or 25.7% of revenue, up from $1.4 million, or 11% of revenue last year. The higher net income was due to higher revenues and gross margins year-over-year, lower operating expenses, and a one-time charge incurred in last year's third quarter of $1.5 million associated with the issuance of registration rights penalty shares. Diluted earnings per share in the third quarter of 2007 was $0.33, versus $0.06 in the prior year period. The weighted average share count used to calculate diluted EPS was 25.5 million.
During the quarter, the company announced that it had acquired Copperweld Bimetallics, LLC a leading global manufacturer of bimetallic wire. The transaction was valued at USD$22.5 million, including $14.5 million in cash and the assumption of $8.0 million in debt. Subsequently, Copperweld's CEO Chris Finley was appointed to the role of Fushi's Chief Operating Officer, and James Todd, Copperweld's CFO was named Fushi's Controller.
Mr. Li Fu, Chairman and Chief Executive Officer of Fushi International commented, "We are pleased to report another quarter of continued growth in our business. More importantly, we believe that the combination of Fushi's and Copperweld's businesses position us as a domestic and international market leader in the bimetallic industry. We are well on our way to executing our strategic plan through technological innovation, manufacturing expertise, domestic and international marketing and branding and strong management."
Mr. Fu continued, "In the last few months, we have broadened our product line, significantly increased our production capacity, rounded out our management team, strengthened our market position and improved our balance sheet with a $39 million private placement. We believe these steps provide us with the competitive advantages we need to further strengthen ourselves as the dominant player in our markets."
Financial Expectations
For the full year 2007, the Company anticipates diluted earnings per share of approximately $0.86-$0.96, based on an estimated weighted diluted share count of 25.0 million shares. Fourth quarter results are expected to be impacted by roughly $0.16 in one-off transaction costs. For 2008, the Company expects fully diluted earnings per share of $1.50-$1.60, based on an estimated weighted diluted share count of 28.8 million shares.
Mr. Fu concluded, "We are excited about the integration of Copperweld and the benefits we expect from that integration. We remain confident that we have put in place a foundation for continued growth and financial flexibility. We believe that the combined company has significant potential, and that we have established ourselves as the leader in the world-wide bimetallic market. We have a lot of work to do in the coming quarters to integrate the companies, ramp up production and leverage our strategic position to increase market share and revenues, and return to strong sustainable margins."
Conference Call
The Company will conduct a conference call to discuss the third quarter 2007 results today, Wednesday, November 14, 2007 before the market open at 8:30 pm ET. Listeners may access the call by dialing 913-312-1411. A live webcast of the conference call will also be available at http://www.viavid.net . A replay of the call will be available from November 14, 2007 to December 14, 2007. Listeners may access the replay by dialing # 719-457-0820; passcode: 8453545.
HRBN--Earnings report. EPS of .26 GAAP or .32 excluding non cash debt amortization compared to $16 stock price. Revenues jumped because Taifu acquisition included for first time. However, sequential "non Taifu" organic revenue actually declined slightly which is puzzling for a "high growth" story guiding for massive revenue increases over the next few years. I am "hold and mold" on this one but am disappointed they have not done a better job driving revenue growth. Will be interesting to see how stock reacts today.
DFR--I added a lot more of this mortgage REIT this week after they released earnings and had conference call. It now represents approx 30% of my portfolio.
--Even after this week's run up to 8.84, the current quarterly dividend of .42 repesents a 19% annual return. It looks to be at least sustainable and could well grow. Although they had a GAAP loss last Q because of write downs on the value of their portfolio, they generated .50 in cash flow more than covering the dividend.
--The per share economic net book value of the underlying securities is 11.84 which provides a value "safety net" even if they liquidate their mortgage portfolio and close down.
--Their mortgage portfolio is 67% government backed RMBS, 21% AAA RMBS and a mix of other lower rated or non rated mortgages. The AAA portfolio declined in value by about 2% last Q so it isn't immune from value declines but not nearly as volatile as lower rated RMBS tranches which have gotten hammered.
--It is a credit arbitrage business model where they borrow at lower rates and purchase mortgage and similar securities yielding higher rates.
-- The 22% of their portfolio which is neither agency backed nor AAA is mostly financed long term secured only by those assets so the potential for loss is limited.
--The 88% of their portfolio which is agency and AAA is financed by short term (up to 45 day) repo financing from major financial institutions which includes pledging some of their agency or AAA portfolio. Because of recent turmoil, the pledge requirements have gotten higher so they have decreased leverage some, but they have repo lines with over 15 very large global financial institutions (not all drawn on) which are constantly rolling over due to their short term nature. Management doesn't see any indication that these lines are going away because the security of agency or AAA paper keeps the repo lenders very comfortable.
--The DFR mortgage REIT and affiliated debt asset manager are majority owned by Nelson Peltz who is in continuing negotiation to sell his controlling interest to DFR. If they were to announce a deal, it would provide further impetus for a price increase.
I know this is very different from a typical play on this board. However, I do see it as very much of a value play despite being in a troubled sector. I view it as a way to play this scary market with a very high, apparently sustainable dividend and potential for continuing significant price appreciation. A Credit Suisse research report following earnings last week put the 12 month price target at 16.
TAM--Monty. I owned 500,000 shares of TMLVF at an average cost of .60. Rode it up to 2.63 (good feeling) then it started to slide. When I started to question if they could even get debt financing (not to mention permits) I started selling 10/15 at 1.55 and was out 11/6 at 1.02 on last sale. By complete coincidence, the next day they disclosed their proven reserve disclosure glitch and it continued to unravel.
I clearly have hurt the share price recently, and, in hindsight, feel foolish for not selling on the way up (only way to exit big microcap positions without decimating share price.
I think TAM has great upside potential at this share price, but getting a mine up and running more or less on schedule requires really good management. My fear is that TAM's management flails around and production ends up delayed well past current projections. My (complete guess) hunch is that they will eventually end up selling to a bigger player for a price well above the current share price. Good luck.
TAM.V--CrocHunter and Farwest. Very helpful, thanks. I would seem if it is part debt/part equity financing that the lender on the debt side would want the equity in place first, so I would guess in that order or at the same time.
TAM.V--Linuspop thanks for the presentation link. Looks like they need about $100 million to get R-190 into production. What would be a reasonable estimate of total diluted share count when R-190 is up and running compared to the 42 million current count (ignoring any financing for Los Pinos). The better they can promote themselves and push the price up with each positive step toward production the less the dilution. I am wondering whether they would do 1-2 major financings so they are "locked and loaded", or a larger number of incremental financings to try to minimize dilution as the SP rises as they approach production.
Once they are permitted on R-190, if zinc and lead prices are favorable, I could see them selling to an established producer early next year.
FSIN--Stock up 11% following PR that CEO will meet with Governor of Tennessee (!?). Not sure how that drives value, but I'll take it.
CSCT--I have sold 85% of my position--maybe too soon. Looks like a SEQUENTIAL increase in revs of over 50% in Q3 following over a 30% SEQUENTIAL increase in Q2. Explosive growth by any measure.
--China Security & Surveillance Technology Announces New Contract Wins and Sales Orders in 3Q07
Wednesday October 10, 7:30 am ET
SHENZHEN, China, Oct. 10 /Xinhua-PRNewswire/ -- China Security & Surveillance Technology, Inc. (OTC Bulletin Board: CSCT - News), a leading provider of digital surveillance technology in the PRC, today announced new contracts won and sales orders in the third quarter ending September 30, 2007.
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The Company's new contracts and sales orders, which include revenues from its newly acquired subsidiaries, resulted in approximately $81.0 million in revenues. The new contracts include city-wide security and surveillance contracts, as well as installations in factories, hotels, residential estates, corporate locations, and cyber cafes. The Company expects to recognize the majority of the revenue from these contracts in the third and fourth quarters of 2007. Among the new contract wins, the Company secured twenty new Safe City-wide surveillance projects.
Mr. Guo Shen Tu, Chief Executive Officer of China Security commented, "We are executing our business plan very effectively and continue to gain momentum establishing CSST as the primary security solutions provider in China. We are pleased with the contribution of our recently acquired businesses and remain committed to further enhancing our security solutions platform and expanding our geographic presence. We are confident with our strategic direction and look forward to continued growth for our business in 2008 and beyond
DFR--Nsom. Can only post public reply to your question below. While I think the acquisition would be positive, the stock actually popped when they announced they hadn't secured financing for it. I think the price was struck before financials began to tank and DFR can possibly renegotiate to buy at lower price with less dilution. Don't think market is counting on acquisition. In the near term price will be driven by whether earnings and cash flow will allow them to retain dividend at same (or close) level. If so, price could move to 12 very quickly and the annual dividend rate would still be over 10%. Not a China stock--but a compelling play with a high dividend underpinning value.
worthy--do you think DFR will complete their proposed acquisition?
I am asking because of a timing thing that might present an opportunity. DFR was about 16 before they announced trouble with the acquisition, dipped to 5, has climbed back to 9 and change. Interestingly, acquisition is scheduled to close or die by October 19, which coincidentally is the expiry date for October options. There are October 12.5s out there on DFR, which might present a nice return
**IF** the acquisition went through
and
**IF** the market valued DFR at something closer to 16 than 10 with that acquisition
Your thoughts?
Joe
FSIN--Own it but don't like the trading action today. Went way up then back down and more in a few hours. Feels like momo money.
CSCT--I sold half my shares which have doubled since I bought them in December in my IRA. They have bought so many companies, issued so many shares and are expanding into so many areas that is has become impossible for me to try to guess EPS in the coming quarters. They are clearly not cheap anymore so one "off" quarter could cause a major sell off. Thanks to abh3vt for the post that brought CSCT to my attention.
NSOM CHALLENGE
HRBN--Makes motors in China.Have owned for three years because of explosive revenue growth potential across many applications in major industries. So far has mostly been potential, however recent PR guided for revs to increase about 7X over the next three years. Hard to value on EPS basis because high R&D expenses and funky Citadel debt financing keep reported earnings low despite the fact that management has been very stingy issuing shares historically. Trading in the last few days has been 3-4X normal volume on no news which suggests that institutional investors are starting to get excited about the story. Hard to say what it's worth or how high it could go. Any opinions welcomed because I own it and need to decide on a selling price.
FSIN--Started buying in April. China wire manufacturer which substitutes aluminum for some of the copper component to lower cost. Growing quickly at decent margins and expanding production and guiding for diluted EPS of $1.03--$1.13 for 2007. Moved up to NASDAQ on 8/31. Was trading at about 10 PE until acquisiton of U.S. competitor was announced two days ago which should approximately double revenues with no share dilution. Since then it has risen from $11.40 to $15.32. Okay I got lucky, but should get some credit for picking a forward looking company with good management.
EGY--Don't own now, but share price has declined significantly as oil price has moved the other way. They are "between gushers" now but are cheap relative to reserves and if oil stays high should see price rise. Seemed like a value oil play.
CML.V--Nearer term producing mining play which had lagged the recent mining rally. I own a bunch and think it should continue to rise as production nears if nickel price stays high.
DFR--Mortgage REIT paying dividend at 19% annual rate at current price. If they can hold dividend and have no significant write downs of bad loans this quarter, the price should really pop--particularly with declining interest rates. I own at an average cost of $10 in real life so am still down.
BX--Blackstone--the classic microcap. The Chinese government is in for $$ billions at $31 per share. The price drops below $22. I don't think that's allowed in our new world order, so I figured it had to rebound at least somewhat. I was tempted to buy the options but never pulled the trigger. Looks like it would have been a good trade.
HRBN--Up 10% today on no news and 4X average volume. Probably some hedge fund deciding it's the next Baidu...
FSIN--Stock up 20% today, including intraday all time high, on this acquisition announcement. Haven't listened to cc yet. Must not be very profitable because price, including assumption of debt, is less than 10% of FSIN market cap yet annual revenues through June are comparable. Could be big opportunity to cut costs and leverage earnings. I am mostly China in my portfolio to get away from $$ exposure and never anticipated a little Chinese company like FSIN would buy a US company. However, with the $ so beaten down, I expect many foreign companies will find US competitors looking like great values, so this should become more and more common--especially for smaller caps where there will be less political opposition.
Fushi International Signs Definitive Agreement to Acquire Copperweld Bimetallics
Tuesday September 25, 4:01 pm ET
Establishes Fushi as the Largest Global Supplier of Bimetallic Wire Products
DALIAN, China, Sept. 25 /Xinhua-PRNewswire/ -- Fushi International, Inc., (Nasdaq: FSIN - News), the leading Chinese manufacturer of bimetallic wire, announced today that it has entered into a definitive agreement to acquire 100% of Copperweld Bimetallics, LLC, the leading US manufacturer of bimetallic wire. The all-cash transaction is valued at USD$22.5 million, including the assumption of debt, and is subject to adjustment based upon Copperweld's net working capital at closing. Fushi expects the transaction to be finalized at the beginning of the fourth quarter 2007 and the consummation of the acquisition is subject to customary closing conditions.
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Mr. Li Fu, Chairman and CEO of Fushi International said, 'We look forward to quickly completing this transaction and welcoming Copperweld to Fushi's expanding business. This transaction makes Fushi a truly global operation and establishes our business as the leading supplier of bimetallic products worldwide. It combines Copperweld's dominance in North America, South America, and Europe, leading product lines and exclusive worldwide rights to proprietary manufacturing technologies, with Fushi's efficient manufacturing base, existing product lines and leading market position in China.'
Based in Fayetteville, Tennessee, Copperweld Bimetallics, LLC is a leading manufacturer of bimetallic wire, principally copper clad steel (CCS) and copper clad aluminium (CCA). Copperweld produces a range of products for use in communications, utility, transportation, and industrial applications in both the U.S. and international markets. A second manufacturing location in Telford, England principally services the growing European market. Copperweld® is a registered trademark for the company's copper clad steel (CCS) wire, which combines the conductivity and corrosion resistance of copper with the strength and relatively low cost of steel. Copperweld has approximately 130 employees and for the twelve months ended June 30, 2007, generated approximately USD$70.0 million in revenue. Fushi expects the transaction to be mildly dilutive in the fourth quarter of 2007 and accretive in 2008.
Mr. Fu continued, 'The combination of our businesses will position Fushi as the global leader in the bimetallic wire industry. This integration creates additional scale in our industry, adds compelling new products to our portfolio, expands our international customer base and builds upon leading bimetallic technology and the highest quality products. While the Company's gross margins are anticipated to decline in 2008 year over year, we believe that this transaction represents a compelling opportunity to enhance net income performance for the long run.
'We also welcome Copperweld's seasoned and talented executive management team. Copperweld's CEO, Chris Finley, is a market innovator in the wire industry and has 21 years of experience in manufacturing. Jim Todd, Copperweld's Chief Financial Officer, has 40 years of experience in the financial sector and will continue to play a key role in the combined companies moving forward. We are excited to work with all of the seasoned and talented employees at Copperweld and look forward to their contributions to our business.'
Mr. Chris Finley, Chief Executive Officer of Copperweld commented, 'We are excited to work in partnership with Fushi to help advance our position as the global leader in bimetallic wire. The combination of our companies bolsters our standing as the premier manufacturer of bimetallic products and wire technology in the world. Mr. Li Fu and the Fushi organization have a firm understanding of our industry, its growth opportunity and achievements over the past several years and clearly understand how our combined businesses can significantly increase our industry profile in the future. We approach this new association with great enthusiasm
CXTI--I lost a little money by taking a small position for less than a day on the way down. However, more upsetting to me is that it defies one of my major premises for investing in Chinese microcaps: If there is institutional ownership I can feel comfortable that it has been checked out and is not a scam. Apparently, they actually announced contracts which didn't exist with specific and identified municipalities. Doesn't that sound completely reckless in hindsight? Doesn't it implicate the former CFO among others? I'm guessing when/if the story comes out, they did sign agreements as disclosed, but those agreements weren't specific enough as to services, revenues etc. The auditors called them on it, and it began to unravel. Hard to imagine they announced a signed agreement with a specific municipality, and there was no agreement of any kind. If that is the case, these hedge fund investors will be very embarrassed and have lots of explaining to do to their own investors.
CML--I bought some more last week. The market seems to like this report. I don't really understand the details. Is it important news?
Crowflight Reports New Inferred Nickel Resources for Deposits Near Bucko Mine
Market Wire - September 17, 2007 7:30 AM ET
Related Quotes
Symbol Last Chg
CMLGF Trade 0.5865 0.00
Real time quote.
CROWFLIGHT MINERALS INC. (Crowflight, the Company) (TSX VENTURE: CML) is pleased to present National Instrument 43-101 compliant mineral resource estimates for the M11A, Apex, Bowden Lake and Halfway Lake deposits in the Thompson Nickel Belt South Project Area, all located within approximately 25 kilometres of the Company's Bucko Lake Nickel Project in Manitoba. Inferred Resources for each area were calculated based on recent exploration and historical drill hole data and were prepared in accordance with the Canadian Institute of Mining, Metal, and Petroleum (CIM) definition standards regarding Mineral Resources and Reserves. The results are presented below in Table 1 and Charts 1 and 2. Figure 1 is a location map of the deposits relative to planned operations at Bucko Lake.
Of particular note is the large tonnage Inferred Resource contained within the Bowden Lake Deposit of 63 million tonnes grading 0.68% nickel (at a 0.5% nickel cut-off grade) and the relatively high grade Inferred Resource at Halfway Lake of 1.1 million tonnes grading 1.08% nickel (at a 0.7% nickel cut-off grade).
Due to the preliminary stage of economic modelling for each deposit, the Inferred Resources of each zone are presented in Table 1 using a range of grade cut-off values. The cut-off values chosen approximate concentrations of contained nickel that, given the 24 month average market metal prices, could possibly be exploited economically.
Greg Collins, Crowflight's Vice President of Exploration commented: "We are encouraged by these results as they quantify for the first time the untapped resource potential of our other Manitoba projects. Exploration work conducted by our exploration team and partner Xstrata over the past few years has led to the definition of quality nickel resources in close proximity to planned operations at the Bucko Mine. The Company will be evaluating the development potential of these resources in the context of our ongoing exploration activities in the belt."
Table 1. Inferred Resources - M11A, Apex, Halfway Lake and Bowden Lake Deposits
-----------------------------------------------------------------------
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0.2% Ni Cutoff 0.5% Ni Cutoff 0.7% Ni Cutoff
-------------------------------------------------------
Deposit Tonnes Ni% Tonnes Ni% Tonnes Ni%
--------------------------------------------------------------------------
--------------------------------------------------------------------------
M11A 9,695,787 0.41 2,222,125 0.77 899,000 1.04
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Apex 3,264,912 0.48 1,323,444 0.65 363,219 0.84
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Bowden Lake 134,525,201 0.51 63,396,901 0.68 23,049,200 0.84
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Halfway Lake 4,018,675 0.58 1,740,000 0.91 1,128,463 1.08
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--------------------------------------------------------------------------
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1.0% Ni Cutoff 1.25% Ni Cutoff
----------------------------------
Deposit Tonnes Ni% Tonnes Ni%
-----------------------------------------------------
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M11A 328,787 1.43 163,488 1.76
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Apex 40,931 1.19 (i)NC
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Bowden Lake 2,044,500 1.16 (i)NC
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Halfway Lake 653,588 1.25 355,613 1.36
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(i) Not calculated at the given Nickel cut-off grade
Mike Hoffman, the new President and CEO of Crowflight commented, "The new inferred resources represent another milestone in the evolution of Crowflight. It demonstrates the potential of the Crowflight Thompson Nickel Belt properties located near the Bucko deposit for future incremental mill feed or a potential stand alone project. Quantifying the inferred resources allow the team at Crowflight to study potential development scenarios and prioritize future exploration and development activities."
M11A Deposit:
The M11A deposit consists of several small lenses of higher concentration nickel mineralization within larger zones of low grade nickel discovered by Falconbridge during the 1970s. The deposit is located within 4 kilometres of the Bucko Lake mill. In 2006, a higher grade nickel zone referred to as M11A North was discovered, which has been the subject of recent drilling (refer to press releases dated March 28, 2006, April 20, 2006 and May 8, 2007). The new Inferred Resource estimate is based on 64 historical holes drilled by Falconbridge and 19 holes drilled by Crowflight and its former operating partner Xstrata Nickel during 2006 and 2007. Plans for this resource include the evaluation of the potential of this resource to supplement Bucko mill feed in the future. Exploration potential in the vicinity of the deposit remains favourable for resource expansion.
Apex Deposit:
The deposit was discovered by Crowflight and its former operating partner Xstrata Nickel in 2006 (see press releases dated April 27, 2006, July 7, 2006 and May 8, 2007) and is located approximately 5 kilometres from the Bucko Lake mill. The Inferred resource presented is based on 13 holes totalling 4,263 metres drilled during 2006 and 2007. The deposit retains exploration potential for expansion at depth and along strike.
Halfway Lake:
The Halfway Lake deposit is located approximately 25 kilometres north of the town of Wabowden and the mill at Bucko Lake. Mineralization at Halfway Lake was first discovered by Falconbridge in 1995. In 2007, Crowflight followed up favourable intercepts with the goal of further assessing resource potential of the area and establishing inferred resources. Crowflight drilled 2 holes in 2007 intersecting widths of mineralization in excess of 9 meters grading 1.4% nickel (see press release dated May 31, 2007). The Inferred Resource presented is based on 9 historical holes drilled by Falconbridge and 4 holes drilled by Crowflight and its former operating partner Xstrata Nickel. The deposit is located in an under-explored portion of the belt and retains the potential for additional resource expansion.
Bowden Lake:
The Bowden Lake deposit is located under Bowden Lake adjacent to the Wabowden townsite, approximately 5 kilometres from Bucko Lake. The deposit consists of large volumes of mineralized ultramafic rock over a strike length of greater than 2.5km. Historical, but non NI 43-101 compliant resource calculations reported by Falconbridge indicated that this deposit hosts large volumes of lower grade nickel sulphide mineralization. In 2005, former operating partner Xstrata Nickel drilled 7 holes from the surface of Bowden Lake to further evaluate a corridor of elevated nickel content. The updated resource presented in this press release incorporates historical drilling from 66 holes, and 7 holes drilled in 2005. Crowflight plans to study potential development scenarios over the coming months.
Mineral Resource Estimate
The resource calculations were completed by Crowflight personnel under the supervision of Greg Collins, Qualified Person for the programs, and a professional geoscientist experienced in the determination of mineral resources and reserves. The resource estimates were based on geological data collected by representatives from Crowflight and chemical analysis provided by ALS Chemex. The update incorporates historical exploration information collected by Falconbridge and recent data collected by Crowflight under a Joint Venture partnership with Xstrata Nickel. The resource estimates incorporate the results from 139 historical diamond drill holes totalling 48,130 metres and 43 recent holes totalling 17,420 metres drilled at four separate zones during the period from January 2005 to May 2007. Please refer to Figure 1 for an illustration of the location of the deposits. Please refer to news releases dated April 20, 2006, April 27, 2006, May 11, 2006, July 11, 2006, May 8, 2007, and May 31, 2007 for information concerning mineralized intercepts.
The determination technique of the mineral resources was based on geostatistical block modeling using Gemcom Software utilizing the inverse distance squared method of grade interpolation. The database consisted of 182 surface diamond drill holes from four project areas, including recent holes completed by Crowflight during the 2005 - 2007 drill campaigns. Minimum composite lengths were 1.5 metres. Density of material was assigned based on average bulk density of mineralized intervals based on available density measurements. The Inferred Resource calculation used a 150 metre search ellipse with minimums of two drill holes and five samples per block. A 0.5% nickel cut-off grade was used to constrain the interpolation model. It should be noted that Mineral resources that are not reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
Qualified Person Comments/Quality Control Procedures
This press release has been prepared and reviewed by Mr. Greg Collins, P. Geo., Crowflight's Vice President of Exploration, a Qualified Person under the NI 43-101 guidelines. The resource estimate has been prepared in compliance with National Instrument 43-101 and form NI 43-101F1, which requires that the estimate be prepared in accordance with the "CIM Definition Standards on Mineral Resources and Mineral Reserves as prepared by the CIM Standing Committee on Reserve Definitions and as adopted by CIM Council, November 14, 2004."
The core sampling method applied during the 2005-2007 drill campaigns followed NI 43-101 requirements and procedures as set forth in the Diamond Drill Standard Procedures developed by Falconbridge Limited. One control standard and one blank were inserted per 40 samples. Three different internal control standards representing different grades were utilized and the standard was selected with similar grade as the samples submitted. All diamond drill core samples collected during the 2005-2007 drill program were sent to the primary laboratory of ALS Chemex in Thunder Bay for preparation and were subsequently analyzed in Vancouver. Fire assays were performed on all the samples for Gold and PGE's which undergo an ICP-AES finish and Sodium Peroxide Fusion. All other metals undergo an ICP-AES finish.
Granting of Crowflight Stock Options
Further to the press release dated September 10, 2007 announcing management changes at Crowflight, one million options at a strike price of $0.60 per share have been granted to Mike Hoffman, the new President and CEO of Crowflight. In addition, Bruce Humphrey, the new Chairman and Director of Crowflight, has been granted 500,000 options at $0.60 per share. The options granted will vest in quarterly increments over the course of two years as per the terms of the Crowflight Stock Option plan.
Conference Call Webcast Now Available Online
A recording of the conference call held Tuesday, September 11th at 10 a.m. has been posted on Crowflight's website at www.crowflight.com.
Crowflight Minerals - Canada's Next Nickel Producer
Crowflight Minerals Inc. is a Canadian junior mining exploration and development company listed on the TSX Venture Exchange. The Company is focused on nickel, copper and Platinum Group Mineral ("PGM") projects in the Thompson Nickel Belt ("TNB") and Sudbury Basin. The Company currently owns and/or has under option approximately 800 square kilometres of exploration and development properties in Manitoba and Ontario.
Crowflight's priority is to bring the Bucko Nickel deposit located near Wabowden, Manitoba into production late in the second quarter of 2008.
Crowflight is the second largest landholder in the prolific TNB in Manitoba with interests in approximately 700 square kilometres (270 square miles) and is well positioned to capitalize on potential development synergies with the proximal location of the Bucko Deposit. Crowflight plans to spend C$2.8 million on exploration in 2007 in the TNB. In Sudbury, Crowflight owns a 100% interest in the AER Kidd project adjacent to Inco's Totten Deposit (10.1 million tonnes grading 1.5% nickel, 2.0% copper, and 4.8 g/t PGM's) and holds property under option to Wallbridge Mining in the prospective Sudbury North Range Footwall.
Crowflight continues to explore opportunities to create shareholder value that capitalize on the depth of the Crowflight exploration and development team.
Cautionary Note on Forward-Looking Information
Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the Company's plan of business operations; mineral resource estimates, and projected costs and expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, competition, risks inherent in the mining industry, and regulatory risks. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Total Shares Outstanding: 248.9MM
Fully Diluted: 275.0MM
52-Week Trading Range: C$0.34 - $1.35
To view Figure 1: Location Map of New Inferred Resources, please click on the following link: http://www.ccnmatthews.com/docs/CrowFlight-LocationMapNewInferredResources.pdf
To view Chart 1 and Chart 2, please click on the following link: http://www.ccnmatthews.com/docs/CrowFlight-Chart1and2.pdf
HRBN--I am in "hold and mold" mode on this one. The PR reflects the potential I believe is there. Nonethess, it's very surprising to me that projections of 2010 (not a typo) revenue (not earnings)can drive a stock up 10%. Would like to think they had better visibility earlier. Honestly, I'm surprised the stock didn't go down on the theory that almost nobody invests in stocks on a three year horizon. I picked it for PSL but wouldn't be surprised to see selling on Monday.
TAM --Farwest (or anyone else), do you have an estimate for how many more $ they need to raise to get them to production? Will it be all equity or could part be debt? The share price decline will make further financings more dilutive. I am just trying to get a sense of how many more shares will be issued. Any help would be appreciated.
CXTI--Stan-If it makes you feel better, I bought some at $1.03 and sold at .85 less than 24 hours later. It's a very odd chain of events on so many levels:
--The CFO resigns, and the stock declines--pretty common--even though the company provides specific encouraging guidance for the 2nd Q.
--2nd Q numbers are late and the stock declines further--also common but makes CFO resignation more suspicious.
--A major SH dumps the stock more recklessly than I have ever seen a stock dumped where there has been no news other than the resignation and late filing. The urgency relates either to the SH's cash needs or the SH's view of CXTI. If the latter, must believe there is major fraud re revenues/income or company otherwise looted. Absent fraud, balance sheet way too solid for any type of solvency issue. SH could have had close relationship to former CFO and learned something damning. However, CFO is no dummy and would be crazy to selectively disclose with all the attendent risks and liabilities.
--WSJ runs story saying SH "paints the tape" on stocks in his portfolio at month end to inflate returns. Could that have caused a "run on the bank" by his investors prompting him to dump the shares?
--PR firm for CXTI sends very odd email essentially saying "they have gone radio silent on us"--not a great PR message to say the least and adds to fears of fraud or major bad news.
--CFO gets signed up by a competitor. Unless the competitor is a fraud, would they sign a CFO up if they had any concern he was leaving a company where the books had been cooked? Is it possible that there is fraud but the former CFO comes out "clean". Hard to imagine if the numbers are wrong that the former CFO isn't tainted regardless of his actual knowledge or involvement in any misdeeds or mistakes. To me, that is an indication that there is no fraud.
--Given the price plunge, surprising no class actions filed yet. I guess a resignation and missed filing don't make a case. However, if they announce any restatements or worse, the floodgates will open. That type of litigation can ruin a small company, so I hope they can avoid it if they haven't really screwed up.
Can't wait to see what's finally revealed.
CSCT--ahh3vt--Thanks for the NY Times article heads up. I couldn't understand why it is up 16% to a new all time high. They still haven't made it to the NYSE despite being approved. I guess still in process of seating independent directors to meet that requirement. At this price, it has passed AWRCF as my largest holding.
TAM--Nuts. Thanks for that information. I'm curious where you found it.
TAM--Plunging on very high volume. Is there some news I am missing?
TRGL--
Given that we are approaching tax loss selling season and every long is holding at a loss, I'm thinking any rally will be met with further selling pressure.
CSCT--They posted blow out record revenues last Q and guided for even higher revs this Q from a combination of organic and acquisition growth. However, the rapidly increasing share count has tempered diluted EPS (reminds me of AOB). Their NYSE listing has been approved subject to having enough indepedent directors whose appointments management is finalizing. Company has huge momentum and potential--the challenge will be to grow diluted EPS fast enough to allow the stock price to continue to grow.
FSIN--Recommending a stock in the current market feels a little like advocating unprotected sex, but FSIN had a strong quarter and, at current guidance, is trading at just over a 10 PE. The replay of the cc is available until tomorrow and is worth a listen. They have applied for a NASDAQ listing and are ramping up their product line to include higher margin products. Since their wire is a substitute for traditional copper wire, their growth is fueled by both GDP and market share growth--as well as growth from new products. Seems like a very well run company selling a basic product at good margins. I think it's a good bet to double within 12 months from a combination of growing earnings and PE expansion from NASDAQ listing.
HRBN--I'm a long term holder and continue to see huge potential but am also dissappointed so far with their revenue growth the past few quarters which has lagged Chinese GDP growth. Their motors seem like an attractive alternative in a number of different industries, but they need to ramp up sales for the stock to trade up to new highs,
DFR-I can laugh about trading into DFR in PSL 6 and catching the ultimate falling knife. Unfortunately, I also bought it in real life. I have never lost more money, more quickly than on that trade.