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Donald Coxe singing out song. The merits of base metals.
http://events.startcast.com/events/199/B0003/
JFF7
I wish I could predict, measure or even simply observe what the metal speculators were doing or going to do. It would make things a whole lot easier to make a buck.
Don't get me wrong. I am still 100% in the market right now. I have just moved out of HBM. And I also agree with the expanding P/E the longer prices stay high but there is also room for pullbacks along the way. I want to be stocks which haven't more recently and have upward potential because of increasing output. That to me is the safest place to be in case of a pullback but at the same time provides a good chance for increases if the market stays flat or moves up some more.
The junior non-producing explorers seem to be doing real good as of late. Too risky for me at this time though. The lcosest I will go is near term producers (within 3 months).
JFF7
HBM - sold half yesterday and the other half today.
It seems to me that the Chinese have just about finished restocking their strategic stockpiles. Wish I had a way to measure this. The pressure on copper may ease some now.
Maybe zinc can hold HBM up but I doubt it. The post earnings draw down and the seasonal pullback of mining prices will be too strong as far as I am concerned.
I will try to stay in nickel stocks for as long as I can. They still look attractive but also may be pulled back with everything else. Hope the run continues but it's time to take some profits on HBM and move on.
JFF7
HBM 1st qtr results
HudBay Reports Strong First Quarter 2007 Results
WINNIPEG, MANITOBA--(CCNMatthews - May 9, 2007) - HudBay Minerals Inc.
(TSX:HBM) (HudBay or the Company) today announced a 68% increase in revenue to
$349.1 million, compared to the first quarter of 2006 (Q1 2006), contributing
to earnings of $63.1 million or $0.50 per share while operating cash flow
increased by 83% to $142.5 million, for the quarter ended March 31, 2007 (Q1
2007).
HBM Results for 1st qtr
HudBay Minerals Inc.
May 9, 2007 - 11:56:32 PM
HudBay Reports Strong First Quarter 2007 Results
WINNIPEG, MANITOBA--(CCNMatthews - May 9, 2007) - HudBay Minerals Inc.
(TSX:HBM) (HudBay or the Company) today announced a 68% increase in revenue to
$349.1 million, compared to the first quarter of 2006 (Q1 2006), contributing
to earnings of $63.1 million or $0.50 per share while operating cash flow
increased by 83% to $142.5 million, for the quarter ended March 31, 2007 (Q1
2007).
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------
Three months ended March 31
($000's except per share amounts) --------------------------------
2007 2006
---------------------------------------------------------------------------
Revenue 349,142 207,963
---------------------------------------------------------------------------
Earnings before tax 117,515 61,643
---------------------------------------------------------------------------
Net Earnings 63,076 75,986
---------------------------------------------------------------------------
Basic EPS(2) 0.50 0.89
---------------------------------------------------------------------------
EBITDA(3) 144,770 77,727
---------------------------------------------------------------------------
Operating cash flow before changes
in working capital 142,500 77,973
---------------------------------------------------------------------------
Cash and cash equivalents 517,772 127,364
---------------------------------------------------------------------------
Total assets(4) 1,391,841 1,318,515
---------------------------------------------------------------------------
(1) Operating cash flow excluding changes in non-cash working capital.
(2) Earnings per share
(3) Earnings before interest, taxes, depreciation and amortization,
loss/gain on derivative instruments, interest and other income and
other.
(4) 2007 at March 31st ; 2006 at December 31st.
The bracketed values that follow denote the comparative figures for Q1 2006.
Results for Q1 were firmly in line with our expectations, said Peter Jones,
President & CEO. Production was on plan and higher metal prices and solid
sales grew revenue by 68% and operating cash flow by 83% to $142.5 million,
compared to Q1 last year.
OPERATING HIGHLIGHTS
---------------------------------------------------------------------------
($000's except per share amounts) Three months ended March 31
---------------------------------------------------------------------------
Production 2007 2006
---------------------------------------------------------------------------
Zinc(5) tonnes 31,408 29,906
---------------------------------------------------------------------------
Copper tonnes 21,724 23,686
---------------------------------------------------------------------------
Gold troy oz. 24,213 26,511
---------------------------------------------------------------------------
Silver troy oz. 352,447 390,230
---------------------------------------------------------------------------
Metal Sold(6)
---------------------------------------------------------------------------
Zinc, including sales to Zochem(7) tonnes 31,857 30,172
---------------------------------------------------------------------------
Copper tonnes 24,662 18,932
---------------------------------------------------------------------------
Gold troy oz. 29,716 14,846
---------------------------------------------------------------------------
Sliver troy oz. 383,919 232,456
---------------------------------------------------------------------------
Q1 2007 Financial and Operating Results
Earnings
Earnings before tax in Q1 2007 increased strongly by 91% to $117.5 million
compared with $61.6 million in Q1 2006. The Company continues to benefit from
its significant tax pools and effectively no cash income taxes were paid in Q1
2007. The benefit of these losses is expected to continue for the balance of
2007, resulting in minimal cash income taxes for 2007. The Company does expect
to pay Manitoba mining taxes in 2007.
Net earnings were $63.1 million for the quarter, or $0.50 per share, compared
to $76.0 million for the same quarter in 2006, or $0.89 per share. Lower
year-over-year net earnings is primarily attributable to the draw-down of the
tax asset resulting in a non-cash tax expense of $41.9 million this quarter
compared to a non-cash tax benefit of $15 million in the first quarter of
2006.
Adding back non-cash tax expense to net earnings recognizes the significant
value of HudBay's tax pools. On this basis, net earnings were $105 million
($0.83 per share) compared with $61 million ($0.71 per share) in Q1 2006,
which represents strong year over year growth of 72%.
Revenue
Total revenue for Q1 2007 was $349.1 million ($208.0 million) from sales of
31,857 tonnes of zinc (30,172 tonnes), including sales of 6,505 tonnes (8,771
tonnes) to the Company's Zochem division for zinc oxide and 3,949 tonnes of
zinc metal sales contained in concentrate from the Company's Balmat mine,
24,662 tonnes of copper (18,932 tonnes), 29,716 ounces of gold (14,846
ounces), and 383,919 ounces of silver (232,456 ounces).
(5) Production includes Balmat metal in concentrate and sales include Balmat
payable metal in concentrate shipped (including to HBMS).
(6) Excludes inventory changes prior to the contractual change with HudBay's
joint venture company Considar Metal Marketing.
Through the first quarter, the Company continued to receive attractive price
premiums for its finished metals that were above LME averages.
---------------------------------------------------------------------------
HudBay Realized Prices
Average Three Months
Three Ended Year Ended
Realized Metal Prices Month Mar 31, Mar 31, Dec 31,
& Exchange Rate Prices(7) 2007 2006 2006
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Zinc US$/lb. 1.57 1.65 1.08 1.53
Copper US$/lb. 2.69 2.81 2.33 3.15
Gold US$/troy oz. 650 651 532 603
Silver US$/troy oz. 13.31 13.44 9.29 11.13
C$/US$
exchange rate 1.17 1.17 1.15 1.13
---------------------------------------------------------------------------
Operating Expenses
Operating costs for Q1 2007 were $184.5 million compared with $121.8 million
during the same period in 2006. The increase reflects a number of factors
including higher metal sales volumes and the costs of Balmat being included
effective January 1, 2007 coincident with the achievement of commercial
production. In addition, generally higher costs associated with production,
higher employee profit sharing expenses and increased concentrate purchase
costs all contributed to the increase. HudBay's cash cost per pound of zinc
sold, net of by-product credits was negative US$0.33 (positive US$0.05). A
reconciliation of this non-GAAP measure is provided in the Company's Q1 2007
MD&A. Depreciation and amortization also increased in Q1 2007 to $21.9
million compared with $15.5 million in Q1 2006. This increase reflects the
inclusion of Balmat beginning Q1 2007 and increased depreciation and
amortization expense at the Trout Lake mine.
Tax Expense
Tax expense in the first quarter of 2007 was $54.4 million compared with a net
tax benefit of $14.3 million in Q1 2006. The Q1 2007 tax expense is comprised
of $38.6 million of income tax expense and $15.8 of mining tax expense.
Importantly, the income tax portion is a non-cash expense due to the draw down
of the Company's tax asset, which w as established in 2006 and is associated
with past losses.
(7) LME average for zinc, copper and gold prices, London Spot US equivalent
for silver prices.
OUTLOOK
Exploration & Increased Land Position
In 2007, we've targeted $45.2 million for exploration, including $8.5 million
on the Bur deposit, which is a significant increase from 2006. During the
first quarter, approximately $7.7 million excluding capitalized expenses, was
spent on exploration activities, compared to the $3.1 million spent in the
first quarter of 2006.
Exploration work increased in the Snow Lake and Flin Flon area during the
quarter. Land holdings at all locations continued to increase and now total
419,605 hectares, including 379,401 hectares in the Flin Flon Greenstone Belt.
The results of a new exploration discovery at Lalor Lake, close to our Chisel
North mine property and our Snow Lake concentrator, were announced in early
March 2007. Drill hole DUB 168 intersected massive sulfide mineralization that
assayed 0.19% Cu and 17.26% Zn over a core length of 16.45 metres. The
intersection is encouraging, and the mineralization is similar to that at the
nearby Chisel North mine.
HudBay's $8.5 million Bur deposit project continues to advance. The Company is
in the process of completing an underground decline, 10,000 tonne ore sample
and feasibility study. The Bur deposit is only 22 kilometers from HudBay's
Snow Lake concentrator and can be easily accessed. A production decision
continues to be anticipated for late 2007.
A portion of our $45.2 million 2007 exploration program, is allocated to
exploration drilling in our operating mines to potentially increase our ore
reserves and extend the life of our existing mines.
Production
Production for the year is expected to be on target with earlier guidelines.
Costs
Operating costs in 2007 are generally expected to be similar to 2006, with the
exception of the Balmat and Trout Lake mines. As Balmat commenced commercial
production on January 1, 2007, the Company will incur additional operating
costs, which will be at a higher unit cost during the production ramp up. We
also expect higher unit costs for the Trout Lake mine because a greater
proportion of its 2007 production will be from the pillar extraction project.
Other cost increases are expected from inflation on consumables and labour.
Capital Spending
The estimated capital spending for 2007 increased by $9.0 million due largely
to the requirement for increased ventilation at the Balmat mine of $3.5
million, $4.5 million for an additional plant to increase the water treatment
capacity of Chisel North mine and an increase of approximately $2.7 million
associated with the expansion of the cellhouse, and installation of a solution
control facility at White Pine Copper Refinery.
CORPORATE HIGHLIGHTS
2007 Aggressive Exploration Program Underway
HudBay's $45.2 million 2007 exploration program is well underway. The program
is targeting approximately $34 million for exploration in the prolific Flin
Flon Greenstone Belt including $8.5 million for advanced exploration at the
Bur deposit. During the quarter, exploration work increased with $7.7 million
expended versus $3.1 million in 2006. Land holdings also continued to increase
and now total 419,605 hectares including 379,401 in the Flin Flon Greenstone
Belt.
In March 2007, HudBay announced results from its first Lalor Lake surface
drill hole located 2.4 km from its Chisel North mine site and 15 km from its
Snow Lake concentrator. Drill hole DIB 168 intersected massive sulphide
mineralization that assayed 0.19% Cu and 17.26% Zn over a core length of 16.45
meters. The intersection is encouraging and the mineralization is similar to
that at the nearby Chisel North mine.
Bur Deposit Progressing on Plan
HudBay's $8.5 million Bur Deposit project continues to advance. The Company is
in the process of completing an underground decline, 10,000 tonne ore sample
and feasibility study. During the quarter, a price protection program on the
deposit was implemented and is approximately 80% complete. As previously
disclosed, the program ensures the economic viability of the deposit above
long-term prices. The program consists of 45,900 tonnes of zinc swaps with an
average price of US$1.32/lb. and 14,400 tonnes of copper swaps at an average
price of US$2.44/lb., protecting approximately 80% of the Bur expected
production between 2008 and 2010. The Bur deposit is only 22 kilometers from
HudBay's Snow Lake concentrator and can be easily accessed. A production
decision continues to be anticipated for late 2007.
Rockcliff Option Agreements
In March 2007, HudBay's wholly-owned subsidiary, Hudson Bay Exploration and
Development Company Limited (HBED), entered into agreements with Rockcliff
Resources Inc. (Rockcliff) respecting seven properties covering approximately
15,800 hectares in the Snow Lake area of Manitoba. The agreements build on
HudBay's own $45.2 million exploration program for 2007 and further leverage
the Company's exploration opportunities in the prolific Flin Flon Greenstone
Belt. HudBay has previously entered into several other option agreements to
increase exploration spending in the Flin Flon Greenstone Belt.
A Focus on Safety and the Environment
Lost time accident frequency for the first quarter of 2007 of 1.3 is unchanged
from the same quarter in 2006. There were no significant environmental
non-compliances during the quarter.
Covenant Defeasance of Outstanding 9 5/8% Senior Secured Notes
On February 21, 2007, HBMS completed the covenant defeasance of HBMS
outstanding 9 5/8% Senior Secured Notes due 2012 (the "Notes"). The covenant
defeasance involved the irrevocable deposit in trust by HBMS with The Bank of
New York, as trustee, of approximately US$3.3 million of U.S. government
securities, such amount being sufficient to pay the principal of US$2.9
million, and interest and premium on the outstanding Notes to the redemption
date of January 15, 2009. Pursuant to the terms of the indenture governing the
Notes, the collateral securing the Notes was released.
Balmat Operation Receives Certification
In March 2007, HudBay's wholly owned subsidiary, St. Lawrence Zinc Company,
LLC (the "Balmat operations") was certified to ISO 14001:2004 and OHSAS
18001:1999 - internationally recognized standards and specifications relating
to environmental and health & safety management systems. HudBay requires all
of its operations to be certified to these important environmental and safety
standards. The White Pine Copper Refinery, acquired by HudBay on January 1,
2006 is expected to be certified later in 2007, which will make HudBay
certified at all of its operational facilities.
For further information, please see attached hereto selected financial
information for the quarters ended March 31, 2007 and 2006. Please also see
HudBay's financial statements together with Management's Discussion and
Analysis of Operations and Financial Condition for the quarter ended March 31,
2007. A copy of HudBay's financial statements for the quarters ended March 31,
2007 and March 31, 2006 as well as its MD&A for the quarter ended March 31,
2007 are available under the profile of HudBay on SEDAR at www.sedar.com and
on the HudBay website at www.hudbayminerals.com.
About HudBay Minerals Inc.
HudBay Minerals Inc. is an integrated mining company operating mines,
concentrators and a metal production facility in northern Manitoba and
Saskatchewan. HudBay also owns a zinc oxide production facility in Ontario,
the White Pine copper refinery in Michigan and the Balmat zinc mine operations
in New York state. HudBay is a member of the S&P/TSX Composite Index.
Forward-Looking Information
This news release contains "forward-looking information", within the meaning
of applicable Canadian securities legislation. Forward-looking information
includes, but is not limited to, statements with respect to HudBay's
exploration program and plans with respect to the Bur deposit. Generally,
forward-looking information can be identified by the use of forward-looking
terminology such as "plans", "seeks", expects , budget or variations of such
words or state that certain actions, events or results may , could , "will ,
will be , would be or is expected to be. Forward-looking information is
subject to known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or achievements of
HudBay to be materially different from those expressed or implied by such
forward-looking information, including risks associated with the mining
industry such as economic factors, government regulation and approvals,
environmental risks, success of exploration activities, future commodity
prices, capital expenditures, requirements for add itional capital, changes in
project parameters as plans continue to be refined, conclusions of economic
evaluations as well as those factors discussed in the section entitled "Risk
Factors" in HudBay's Annual Information Form for the year ended December 31,
2006, available on www.sedar.com. Although HudBay has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors
that cause results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated in
such information. Accordingly, readers should not place undue reliance on
forward-looking information. HudBay does not undertake to update any
forward-looking information, except in accordance with applicable securities
laws.
(HBM-F)
To view the Management's Discussion and Analysis, please click the following
link:
http://www.ccnmatthews.com/docs/hbmmdaQ107.pdf
To view the Financial Statements, please click the following link:
http://www.ccnmatthews.com/docs/hbmifsQ107.pdf
HudBay Minerals Inc.
Consolidated Statements of Earnings
Unaudited
(In thousands of Canadian dollars, except share and per share amounts)
Three months ended
March 31
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------
Revenue (note 14) $ 349,142 $ 207,963
---------------------------------------------------------------------------
Expenses:
Operating 184,508 121,782
Depreciation and amortization 21,874 15,542
General and administrative 4,573 3,677
Stock-based compensation (note 10e) 4,709 2,251
Accretion of asset retirement obligation 789 660
Foreign exchange loss (gain) 2,044 (1,268)
---------------------------------------------------------------------------
218,497 142,644
---------------------------------------------------------------------------
Operating earnings 130,645 65,319
(Loss) gain on derivative instruments (10,979) 4,331
Interest and other income 5,962 1,172
Interest expense (399) (4,754)
Exploration (7,749) (3,134)
Other 35 (1,291)
---------------------------------------------------------------------------
Earnings before income tax 117,515 61,643
Tax expense (benefit) (note 9) 54,439 (14,343)
---------------------------------------------------------------------------
Net earnings for the period $ 63,076 $ 75,986
---------------------------------------------------------------------------
Earnings per share:
Basic $ 0.50 $ 0.89
Diluted $ 0.49 $ 0.70
Weighted average number of common shares
outstanding (note 10f)
Basic 126,138,341 85,392,988
Diluted 128,232,455 108,179,593
See accompanying notes to interim consolidated financial statements.
HudBay Minerals Inc.
Consolidated Statements of Retained Earnings
Unaudited
(In thousands of Canadian dollars)
Three months ended
March 31
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------
Retained earnings, beginning of period $ 642,723 $ 78,732
Net earnings for the period 63,076 75,986
Transition adjustment financial instruments (1,005) -
---------------------------------------------------------------------------
Retained earnings, end of period $ 704,794 $ 154,718
---------------------------------------------------------------------------
Consolidated Statements of Comprehensive Income
Unaudited
(In thousands of Canadian dollars)
Three months ended
March 31
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------
Net earnings for the period $ 63,076 $ 75,986
Other comprehensive income (loss),
net of tax (note 11) (4,942) -
---------------------------------------------------------------------------
Comprehensive income for the end period $ 58,134 $ 75,986
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
HudBay Minerals Inc.
Consolidated Balance Sheets
Unaudited
(in thousands of Canadian dollars)
March 31, 2007 December 31, 2006
---------------------------------------------------------------------------
Assets:
Current assets:
Cash and cash equivalents $ 517,772 $ 385,864
Accounts receivable 101,436 132,275
Inventories 174,460 163,842
Prepaid expenses 6,463 7,288
Current portion of fair value of
derivatives (note 12) 6,127 2,579
Future income and mining tax assets 118,393 154,063
---------------------------------------------------------------------------
924,651 845,911
Property, plant and equipment (note 4) 445,293 444,044
Other assets (note 5) 21,897 28,560
---------------------------------------------------------------------------
$1,391,841 $1,318,515
---------------------------------------------------------------------------
Liabilities and Shareholders Equity:
Current liabilities:
Accounts payable and accrued liabilities $ 151,170 $ 139,922
Taxes payable 10,896 30,217
Current portion of other liabilities (note 6) 34,100 28,087
---------------------------------------------------------------------------
196,166 198,226
Long-term debt (note 7) 10,638 10,214
Pension obligations 41,741 41,675
Other employee future benefits 66,391 65,083
Asset retirement obligations 34,337 33,548
Fair value of derivatives (note 12) 16,966 -
Obligations under capital leases 4,254 4,979
Future income tax liabilities 577 582
---------------------------------------------------------------------------
$ 371,070 $ 354,307
---------------------------------------------------------------------------
Shareholders equity:
Share capital:
Common shares (note 10b) 303,226 308,441
Warrants (note 10c) 1 3
Contributed surplus (note 10e) 17,281 13,098
Cumulative translation adjustment - (57)
Retained earnings 704,794 642,723
Accumulated other comprehensive
income (loss) (note 11) (4,531) -
- --------------------------------------------------------------------------
1,020,771 964,208
---------------------------------------------------------------------------
$1,391,841 $1,318,515
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
HudBay Minerals Inc.
Consolidated Statements of Cash Flows
Unaudited
(in thousands of Canadian dollars)
Three months ended
March 31
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Net earnings for the period $ 63,076 $ 75,986
Items not affecting cash:
Depreciation and amortization 21,874 15,542
Future tax expense (benefit) 41,859 (14,939)
Unrealized foreign exchange gain 472 518
Amortization of deferred financing costs - 362
Accretion expense on asset retirement
obligation 789 660
Stock-based compensation 4,709 2,251
Unrealized portion of change in fair value
of derivatives 12,483 (3,159)
Other (2,762) 752
---------------------------------------------------------------------------
142,500 77,973
Change in non-cash working capital (note 13) 13,391 (51,847)
---------------------------------------------------------------------------
155,891 26,126
---------------------------------------------------------------------------
Financing activities:
Repayment of senior secured notes - (1,168)
Repayment of obligations under capital leases (989) (936)
Proceeds on exercise of stock options 1,498 1,180
Proceeds on exercise of warrants 10 4,269
---------------------------------------------------------------------------
519 3,345
---------------------------------------------------------------------------
Investing activities:
Additions to property, plant and equipment (23,961) (27,003)
Acquisition of White Pine Copper Refinery,
Inc., net of cash acquired - (17,041)
Additions to environmental deposits - 15
---------------------------------------------------------------------------
(23,961) (44,029)
---------------------------------------------------------------------------
Effect of exchange rate changes on cash and
cash equivalents (541) 262
---------------------------------------------------------------------------
Change in cash and cash equivalents 131,908 (14,296)
Cash and cash equivalents, beginning of
period 385,864 141,660
---------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 517,772 $ 127,364
---------------------------------------------------------------------------
Cash and cash equivalents is comprised of:
Cash on hand and demand deposits $ 73,356 $ 102,739
Money market instruments 444,416 24,625
---------------------------------------------------------------------------
$ 517,772 $ 127,364
---------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements
Zinc and Copper LME inventories down big time!
Could be a good day for metal heads.
Breakwater should hit new all time highs. Maybe HBM also.
JFF7
5,000 avergae trading rule
When DANLC / KIK came flying out of the gate in PSL5, I think I made some snide remark about buying your own shell company and entering it in the contest. However, KIK's last couple of posts ring true to me.
As a compromise, could we consider having the wild card entry not have to comply with the 5,000 average trading rule (like it is exempt from the no pinkees rule and the must have earnings rule?). At least then you could have an avenue for people to get these low volume unkown stocks in the the game and getting some exposure.
JFF7
QUA
I think QUA has good upside potential but it has stalled recently because of the two PP issued to raise cash.
As soon as they let the market know what they intend to do with this capital, it will start to move up at a more serious pace.
They are posturing as an aggressive company and say they can deliver. The market loves that sort of talk. Now that they have some money, let's see them in action. Maybe get some timelines around an open pit mine for the Moly holdings. Maybe an additional shorter term project. I am waiting to see what they come out with.
JFF7
Rookie of the Content (ROTC)
"I don't see how rookies (with all the support required) can end in the top-10, but they do."
That's easy, we get all the support we need right here from VMC members.
I think it should be pointed out that just because a person has not entered the contest before doesn't mean they are new to the board. For example, although I have not posted much, I came over from Raging Bull like many others.
This was the first time I considered entering. I did so because I thought it might help me learn to focus on maximizing a return over a limited period of time. In the past I have bought and held on to stocks for much too long because they never realized my perception of their potential. I knew from watching guys like HWEB who are quick to take a profit that this was something I have to get better at.
My goal for the contest was to try and finish in the top 25. Since I did not have much time to research a lot of new stocks, I stuck with the mining sector for most of my picks. I thought in order to finish in the top 25 I could not afford to have any losers. The base metals seemed a natural. I also thought I needed the help of a couple of flyers to maximize the overall return.
I relied on the input of the board to narrow the flyers I would look at. I picked two I thought had potential. As it turned out, one of them turned out to be a loser, so early on in the contest, I traded for a moving flyer.
Since entering the contest, I have been much more willing to trade out of a stock to take on new holdings that show more promise after the original holding has moved up some but not to it's full potential. I like one of the VMC poster's thought process about when to sell. Something like... if you didn't own the stock now, would you buy it? If not, it's time to sell.
The board has so much to offer in terms of experience and knowledge. I am so glad that people are so willing to share.
Anyways, now that I have been so long winded, I'll just wrap it up by saying I'm looking forward to PSL6. I doubt I will finish in the top 5 again but it will be fun to try.
Have fun!
JFF7
HBM
I like the share price increase the last couple of days, the LME zinc inventory dropping, LME zinc prices hitting 1.70, and with the earnings date drawing close, I am back into HBM after a brief stint away.
Too many positives to ignore.
JFF7
GILEAD Copper prices
I think copper prices are about as high as they will get. I think LME copper inventory levels re so high because China is restocking their strategic stock piles. Once those are replenished, the inventory levels will stabilize and prices will remain relatively high in the 3.00 to 3.50 range for quite some time.
JFF7
CL001 PBG
"I thought THAI still burns the oil, why is it environmentally friendly?"
There is 50% less greenhouse gas emissions with THAI.
Don't get me wrong here. This is not windpower. But if we still need oil until we find better alternatives, things like the THAI process will help.
From an investor point of view there are a number of good things about it as well.
JFF7
This is taken from the PBG website:
http://www.petrobank.com/hea-thaitechnology.html
"THAI™ has many potential benefits:
Higher resource recovery
- Estimated 70-80 percent recovery of oil-in-place
- Potentially feasible over a broader range of reservoirs including: low pressure, thinner, previously steamed, deeper, removal of gas over bitumen; or top and bottom water
Improved economics
- Lower capital cost – only one horizontal well, minimal steam and water processing facilities
- Lower operating cost – negligible natural gas, minimal steam generation and minimal water processing
- Potential for higher netbacks for partially upgraded product and less dilutent use
- Faster project execution time
Lower environmental impact
- Negligible fresh water use
- 50 percent less greenhouse gas emissions
- Smaller surface footprint and easier reclamation "
PBG - New Canadian environmental law
A new environmental law is coming to Canada. More details to be released tomorrow but it sounds like companies are being asked to reduce CO2 emissions or face having to buy credits from companies that earn them for being environmentally friendly.
This emphasises the upside of the THAI process.
JFF7
Gold and nickel leading the way
Nickel continues to be hot. Have BMC and LBE. Haven't had a chance yet to pick up SGL.
Gold is warming up real nice. Have my CMM and hope to pick up some Yamana warrants. Looked at SFR (San Gold) but looked a little overpriced.
If Gold does break out, do the established players move first and then followed by near term producers or do they all move at once?
Is platinum next after Gold or concurrent with Gold?
Uranium stocks seem to have stalled even with the record high prices. Is it because the prices are driven so much by speculative forces?
So many questions running through my poor brain, LOL
JFF7
Moved from HBM to PBG
I didn't like the way HBM was behaving in face of all the strong fundamentals. Insiders exercising options and cashing out didn't help either. But the final kick was when someone here pointed out the one day opportunity to purchase PBG at a discount (because of the terms of convertible debt financings put in place).
I had been watching PBG for a while and thought I had missed the boat when it started moving up lately from $22 to $26.
Getting a chnace to get in at 22 and change was just too good an opportunity.
Below is a good article highlighting some of the good things PBG has going for it.
JFF7
http://www.canada.com/nationalpost/financialpost/printedition/story.html?id=66f1fbc8-b61c-4e74-bd1e-...
'It's a nice problem to have'
Petrobank's bitumen recovery project is working so well that production is being held back for lack of storage space
Jon Harding, Financial Post
Published: Saturday, April 21, 2007
CALGARY - A $35-million oilsands experiment Petrobank Energy and Resources Ltd. is conducting on a muddy rectangle of land cut from the northeastern Alberta forest is going far better than president and CEO John Wright could have hoped.
The thermal recovery project, which Mr. Wright thinks can revolutionize the oilsands busines, is showing it is capable of producing more oil than expected and it reached its peak potential sooner than expected.
Petrobank is the 84% owner of Whitesands Insitu Ltd., a pilot project in which the company's oilsands reserves are being baked underground in a volatile mix of oxygen and hydrocarbons.
John Wright, president and CEO of Petrobank Energy and Resources Ltd., says there's a market out there for the company's patented toe-to-heel air injection (THAI) bitumen recovery system.
Tim Fraser, Canwest News Service
A combustion front, slow-moving and at 600-degree Celsius, is pushing oil to the surface.
The so-called fire flood recovery method was tested and scrapped by a handful of industry stalwarts in the 1970s. Petrobank took the technology and adapted a horizonal well configuration that lets gravity -- the oilsands melt towards the production well--do some of the work.
With the eyes of the industry watching closely, heavy crude has been successfully sucked above-ground for the better part of the past eight months at Whitesands via two of the project's three planned horizontal production wells.
A third well pair -- made up of one vertical air injector and a horizontal producer sitting 500-metres away -- will be brought on stream in the coming weeks, all of which is leading to a new challenge for Mr. Wright.
Whitesands' potential output was an uncertain measure pending the success of Petrobank's patented toe-to-heel air injection (THAI) recovery process.
With THAI working so successfully, production from the three sets of wells could easily double early predictions of 1,800 barrels of oil a day, and for now, it's being choked back well below that because the project's storage tanks are too small.
It's a nice problem to have, Mr. Wright said.
"It's telling us everything about the process that worked theoretically in the lab works in the field, and also that we took a very fail-safe, call it conservative, stance in our planning.
"We didn't build big enough tanks, but the last time I drove down the road that was a pretty easy solution to solve. There are lots of big tanks out there."
Mr. Wright and his Petrobank colleagues believes the THAI process could unseat the more common oilsands recovery method called steam-assisted gravity drainage, or SAGD, which itself has only been used by the industry for a little more than 10 years.
Only about 10% of Alberta's oilsands are buried close enough to the surface to mine.
The THAI process seeks to recover as much as 80% of the bitumen in place, more than double that of SAGD, and for half the capital and operating costs.
There's no need to build water processing and large steam production facilities, and large quantities of natural gas aren't required because there's no need for steam.
Mr. Wright figures costs to build an oilsands project using the THAI recovery method would come in at between $10,000 and $15,000 a flowing barrel, a measure of capital intensity. That's about half the cost for a SAGD project and a giant step back from large-scale mining and upgrading projects that produce upgraded synthetic crude, for which costs have risen to between $100,000 and $128,000 per flowing barrel.
"Above ground, it's way less pots and pans, and below ground it's half as many horizontal wells, which are the expensive wells," said Mr. Wright.
Petrobank will later this year build three more well pairs to test another of its patented processes called CAPRI, in which catalysts mixed with the hot oil at the well bore could work to upgrade it underground. The company is also planning to build a separate commercial project producing 10,000 barrels a day on its oilsands leases.
Ultimately, the hope is for Whitesands Insitu Ltd. to farm out its technology to other oilsands players.
****"I honestly believe if I come out with a technology that's different from the one you're using, and after the initial shock I can show it takes half the capital investment, has half the operating costs, will recover twice as much oil and start up in half the time, how long are you going to wait?" Mr. Wright said.
"There will be some skepticism, but sooner or later it'll just be accepted as a common concept, like SAGD was."
Looks like a good morning
- far est markets are up strongly,
- gold is up stronlgly
- base metals prices are up acros the board
- LME inventory levels down for zinc, nickel, and copper
- lots of pre-market bids are up from yesterday close on base metal stocks
I used yesterday's volatility to rebalance my holdings. Moved some money into BMC which looked so cheap, I couldn't resist.
I was tempted to sell some QUA because of the dilution but then realized it simply made the company that much stronger.
Picked up some more CMM on news of the permit. Not sure if that was wise move for the short term with so many people taking profits but again I think they are in a stronger situation now and may have some more good news at the conference call today.
Hope everyone has a good day.
JFF7
KIPP
I hear you and that's why I am watching so closely. Despite so many troubled spots to watch, I am suprisingly optimistic.
Many of the things you have listed are things that have hit the markets recently and yet the markets have been suprisingly resilient.
I really think this market is being driven by the change in the economies of countries like China and India and even Europe to some extent. The genie is out of the bottle and it's a lot harder to put it back in than people think.
Now that China has embraced the WTO and let global companies in the door, it will be hard to turn back the clock. It's going to take a lot more than an interest rate hike to slow the Chinese economy down appreciably.
In the meantime, it's one foot on the accelerator and one foot on the brake. I am mainly focussed on micro cap Canadian resources stocks that are fairly liquid. I can be out of the market in minutes if I have to. The market is providing some incredible opportunities at this time and I am happy to take advantage of them.
JFF7
KIPP - CHina GDP - Hot
Yes I am watching the markets there also. I watch the Heng Sang and the Shanghai Composite in particular.
The markets initally dipped 2% but are bouncing back a little now. seem to be hovering around 1.5% down.
I look back at how quickly they jumped back up the last time they dropped a lot on the news of an interest rate jump. I wonder if the reaction will be more muted this time IF they do increase the interest rates. Too early to tell.
Good to keep an eye on them though.
JFF7
Vegas is a good location. You need a destination city and Vegas is one of the best. I think you will get a much bigger turn out that way. Other locations you might just get hard core members but here you may end up with lots of others that would like to meet other VMCers but also make the trip for what the destination spot itself offers.
As far timing, the Fall would be better I think. Summers are just so jam packed already with holidays and cottage weekends. Late September or October?
Activities? Who doesn't like to golf, or flog, depending on your skill level. Lots of things to do in a place like Vegas anyways. Maybe you could book a hospitality suite for people to drop by anytime of the day and just introduce themselves around informally. You could have an activity board that people could put up their plans on for other to take part in on an adhoc basis (besides any planned events).
JFF7
LMC / RNO
'Look at LMC, exploded 15% after buying RNO. Ironically it rose much more than RNO on that day."
Well when you get such a good deal on the purchase like LMC did with RNO, essentially paying below market value, of course the purchaser's stock is going to go up.
JFF&
PS....I'm not bittter.....I'm really not....
CL001 : HBM
"...There were rumors that LMC buying HBM. Those who bought HBM for takeover were disappointed. They may already got out to chase other stocks...."
Guilty as charged.
I sold 1/3 of my HBM holding today in order to buy CMM. Got lucky on the timing and CMM went up 15%. I may hold to see what the earnings PR brings but I am tempted to take the quick profits on Monday. I'll sleep on it over the weekend and see how things look next week. Even after selling a third of HBM, it is still my biggest holding.
If I sell CMM, I am thinking of putting it back in to HBM but I am also considering adding to my QUA. They both have the same relative upside for me. The difference might be that QUA is moving up again while HBM is "playing dead". I have to respect the market. I have held value stocks sometimes for years waiting for the value to be recognized. But if the market doesn't want to give it the recognition, you have to respect that and move on.
I sold my LBE at 3.90-3.95 when it stalled out after a great run but I see that it made it all back today so I am less inclined to get back in to LBE. But you have to love those nickel stocks. They are great distance runners. Lots of upside still on the producing juniors.
Have fun!
JFF7
CMM up 15%
I don't know but I hope so. I own a bunch of this and I am expecting good news. Today's PR cinched it for me.
JFF7
CMM - Cliff
Isn't HBM a large holder of their stock? I remember reading in the quarterly earings report from HBM that they owned 50% of some CMM company. Is this the same one?
JFF7
HBM
added about 25% more today. Expecting some kind of offer before 1st qtr report comes out in mid May. Hoping there is no general market correction before then.
Expect 1st qtr earings report will be good. Forward PE is 3.5. Too good for someone to not make an offer. Lots of cash now and more pouring in. It almost pays for itself.
JFF7
CL001 sell some metals and reinvest in HBM?
That's spooky. I sold some metals and added to my HBM position today as well.
My thinking was that HBM has been in a holding position for a long time now. Copper and zinc prices can go up, inventory levels go down and it still hold it's trading range. I know a lot of people have been trading it for the last while (not me, wish I had the time to do that) because it was so predictable.
Either the traders own this stock and are holding it in the trading range or people are not expect great results becuase of the low copper an zinc price during the first qtr or someone is accumulating and keeping the price range bound so they can accumualte as much as possible prior to a buy out.
Not sure what it is but it seems to me that no matter what the scenario, HBM can't be held in this trading range forever so the price will be moving north (at least 25 from what I can tell) sometime soon.
However, a correction good take it south. With such a low P/E and good fundamentals, I don't see it falling that far if that did happen.
Have fun!
JFF7
Looks like the zinc stocks may finally begin their run. BWR has been up recently but now the LME zinc prices are also up over 1.60. Up almost 5%
Zinc April 10,07:36
Bid/Ask 1.6142 - 1.6233
Change +0.0748 +4.86%
Low/High 1.5393 - 1.6505
http://kitcometals.com/
KKR getting into the nuclear business. There must be money to be made. These guys have a lot of success in making money. Not sure I want them running a nuclear plant though. Their very good at squeezing out the costs of an operation.
JFF7
QUA.TO news (if this was aready posted here today, I apologize for the second post but I don't remember seeing it posted.
Copper production up 30% and gold production up 150% in the first qtr. No hedging in place anymore.
Not even at a 52 week high yet and only about 42 million shares outstanding. In the process of purchasing a world class Moly holding. Debt financing in place for their new mine.
Great results for first qtr. April 23 will release earnings results for the first qtr. They want to see how it goes before they up their forecast for the year but Q@ is looking good as well.
Have fun!
JFF7
http://ca.news.finance.yahoo.com/s/09042007/2/biz-finance-quadra-mining-closes-five-cent-record-copp...
Quadra Mining closes up five per cent after record copper and gold production
Mon Apr 9, 6:18 PM
Craig Wong
Email Story IM Story Printable View By Craig Wong
VANCOUVER (CP) - Quadra Mining Ltd. (TSX: QUA.TO) said Monday it produced a record amount of copper and gold at its Robinson mine in Nevada in the first quarter, with copper production up 30 per cent and gold up 150 per cent from a year ago.
The news helped send the stock up 55 cents to $11.90 on the Toronto Stock Exchange.
The Vancouver-based miner said Robinson produced 36.6 million pounds of copper in the first-quarter of 2007 and 31,040 ounces of gold.
"We have been able to reap the benefits of continuing high mill throughput and improved recoveries," Quadra president Paul Blythe said in a statement.
"Robinson, as a skarn deposit, is difficult and results are likely to be erratic in any month or quarter. Nevertheless, clearly we are making good progress in getting in front of these complexities."
Gold production has already exceeded half of Quadra's guidance for annual gold production, Blythe said due to higher head grades than estimated in the block model and higher-than-historical recoveries.
"As we gain confidence on sustainability, we will revisit our expectations," the chief executive said.
Quadra expects to release first-quarter financial reports on April 23. The average analyst estimate is for earnings of 66 cents per share for the quarter according to Thomson Financial.
In 2006, Quadra earned $32.2 million or 87 cents per diluted share on revenue of $393.3 million. That compared with a loss of $2 million or seven cents per diluted share on revenue of $228.2 million in 2005.
RBC Capital Markets analyst Fraser Phillips has rated the stock a "sector perform" with "speculative risk" and a $10.50 price target.
He wrote that Quadra provides investors with high leverage to copper prices in a junior producer, but has faced inconsistent ore grades and recoveries at Robinson and delays and cost escalation at its Carlota project could present challenges going forward.
"The high-cost nature of the assets would lead to a rapid deterioration in value in any significant copper price correction," Phillips noted.
Last month, Quadra made a friendly offer of $34.5 million in stock for International Molybdenum PLC, which owns the high-grade Malmjberg molybdenum project in Greenland.
The takeover proposal is based on InterMoly shareholders receiving one Quadra share for each 36.22 InterMoly shares and InterMoly warrant-holders getting one Quadra share for each 99.23 InterMoly warrants.
Quadra has said Galahad Gold PLC, with 78 per cent of InterMoly's shares and 25 per cent of its warrants, plans to tender to the offer. In addition, InterMoly's board of directors is endorsing the takeover bid.
In addition to a measured and indicated resource containing 560 million pounds of molybdenum, a technical report prepared for InterMoly identifies the development of an open-pit mine that would operate 365 days per year at a scale of 25,000 tonnes per day mill feed.
Bobwins - mining stocks to run this summer?
Off to the races? If we haven't been to the races over the last few weeks, what have we been doing? It's been unbelievable stretch for many mining stocks. Hasn't hurt my portfolio either.
QUA had good news today. Giving it more room to run. Maybe we can keep going for the summer. If we do.... well I just don't want to think about it, It would be too good to be true.
Good luck to all and remember... Have fun! I know I am.
JFF7
Cl001 Amex conference
Have you considered looking at ARG.To as well. Might we worth investigating.
JFF7
Cliffvb RNO Wts
Did they not use some sort of formula to derive the price? Average over the last 10 days closing price? or something similar?
I noticed that the wts had increased in value much more quickly than the share price over the last few weeks. I was interested in buying but the volume was just too thin. They were just hitting the right price point where their value was increasing very quickly.
JFF7
Bob - ADA.V
'ADA.v needs startup of mine AND financials to show production, revs and hopefully profits. Bobwins"
Spoken like a true banker! Just kidding. I think the market agrees with you. The mine startup is built into the price.
Thanks for your thoughts.
JFF7
ADA.V
Anyone still in this one?
I am still holding but something about the way the stock is trading is bothering me. Issued some extra shares recently at 1.05 so that didn't help with the dilution but I don't think that is it.
Waiting for mill to start up. That may kick it out of it's trading range.
My impression is that they want to use the proceeds of the zinc mine to fund a gold mine they own. Nice collection of properties over all.
If the price of zinc rebounds and heads up and this stock does not head up along with it, I wll take that as a signal to sell.
JFF7
ARG.to - rebound copper play
Anyone looked at this one. Just got in a few days ago. I like it because there is a great deal of potnetial to significantly increase thier production of copper and moly this year just by fixing their infrastructure. As well they are benefiting from the increase in the price of copper. Potential double in share price from here within a year.
Be warned though. Not your typical miner. Leeches off one of the big copper miners in Chile. Benefits are a real long mine life to work from and can increase production with little cost since they are not actually mining. Downside is that they rely on thier host for their life blood so the stock will always trade at a discount because of that.
They have no debt and a fairly small (for a miner) share count. They're worth a look anyways.
I have taken a significant position in them.
JFF7
BLE - PP
As much as I wish I owned some of this (retroactively would be nice), this PP only increases the share count by around 3% so I can't see it slowing BLE down.
It's like hiring a promoter. Ony in this case they are paying you for a percentage of the action. SAM's ownership of this will only help to vault the price higher.
It's a smart move in my book.
JFF7
Cl001 Nickel / copper
I am mainly going juniors now for nickel and repressed copper stocks. Ones that have near term upside production increases coming.
The small caps of nickel still have some room to run but the juniors have more upside because they are just bringing mines and milling capacity online. Potentially I guess that gives them more down side as well because there are still lots of things that could happen between now and then but the important part for me is that you are not relying on the continued increase in the price of nickel for a rise in share price. Sure, it may happen but that would just be icing on the cake. A little more risk with juniors but certainly more reward to go with it. Trying to stay with companies with mines in politically stable countries (as per Donald C's advice).
I also like copper plays that are undervalued or that have increased production coming online. The copper correction is over for the time being and share prices will snap back some. Find the ones worse hit and you can get some good gains. I am a little late to this market than I wanted to be but I am still finding some good value there.
Zinc juniors are the other ones I expect to see go to the next level as well. But we have not seen that on the LME inventory levels or prices yet. I haven't researched them yet. Missed the big zinc run with FNX. NUTS recommended it when it was in the 8-11 dollar range and now it is at 26. I owned during one of it's flat period but over thought the situation and reinvested the moeny elsewhere thinking I would come back to it. My loss for not holding tight.
Your right about SAM. They sure seem to know this part of the market.
JFF7
Nelson - QUA
Supposedly a small hedge fund took an interest in IMY.L when news came out earlier in the year that there was someone interested in them. The same hedge fund is buying IMY.L again recently. They may be trying to push the price up in order to get a better offer.
The price QUA has offered for IMY.L looks so good because IMY.L was not targeting production until 2011. QUA of course hopes to move that date up and IMY.L believes they can. That is what QUA says it's strength is.
This attention the company is getting because of this Moly purchase is good because it raises the profile of QUA. But that is not the reason to own this company, in my opinion.
The attractive facts for me are that this company has such a low share count, has a producing copper mine whose production was hedged all of last year while copper prices soared, and now those hedges have ended. This one was flying under the radar and now people are starting to rediscover it.
They should post earnings of 3.50 to 4.00 in 2007 (with cooper at 3 bucks) but are only trading at 10 dollars. I think there will be a significant rise in their share price from here.
Have fun!
JFF7
Cl001 - Moly
I have to say that I knew of moly before your table pounding and did not jump in whn you pounded the table but boy oh boy were you ever right. Hats off to you!
You have a great sense of timing the market so not only are you in the right place but you there at the right time! I find this true for your metal picks.
Have fun!
JFF7
Wade AEY and HSOA
I'm glad to see someone buying AEY. I have my fill currently and will not be adding. I am slightly underwater at a ACB of 3.60. (Guess I bought in a little too soon). Hopefully there is some recognition by the market when they post Q1. This is a bit of a sleeper though with not a lot of volume. I have been in too many good value stocks that take forever to get recognized. I think this is on the borderline. Historically looking though, there is lots of room for the price to run up.
HSOA I have at the top of my watch list but I think it will need an external event like some bad storms to get the market interested in it again. The weather report looks good from that perspective but I don't like to gamble on the weather so I am just keeping a close eye on it.
JFF7
LIM / RNO
Also sold off my RNO. Good advice from Bobwins and CL001.
Will look to buy into LBE or BMC or QUA (for undervalued copper play) on any general pullback.
Had another company get bought out today. What are the odds of that. Two in one week and I only hold about ten stocks.
Have fun!
JFF7