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Too bad TATF/Raleo/TAH makes absolutely no guarantee that they will add value to tree owners' logs.
In fact, they have millions of board feet of sawn teak that they have been storing for years, unable to sell.
The unfortunate reality for tree owners is that they can accept a small fraction of what TATF is projecting their wood is worth (if only TATF would sell it at market prices), or they can wait for years (or more likely decades, if not forever), waiting for TATF to 'add value' to their logs.
A1
An interesting report...
I recently read the 2009 annual report of Precious Woods, a publicly traded company with teak plantations in Costa Rica and Nicaragua. It provides some interesting perspective. The section on Costa Rica starts on p. 23.
http://www.preciouswoods.com/images/stories/2010/precious_woods_ar_2009_english.pdf
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To All: Please review IHub's terms of use.
In particular, a post which:
'constitutes a personal attack, which is defined as:
* Posting harassing or otherwise objectionable content about another member;
* Calling another member names;
* Not staying on topic with the current investment discussion, but instead focusing on an individual member'
is not allowed.
A1
Koabo;
Any information you could provide to the board regarding the price of the thinned wood would be appreciated.
TIA
A1
Another good paper on plantation teak.
http://www.istf-bethesda.org/specialreports/teca_teak/teak.pdf
A1
TVI.TO earns $0.018/share in Q1
http://www.kitco.com/pr/1289/article_05142010102215.pdf
Not bad for an $0.11 stock.
A1
FAU.V FVGCF.PK Fire River Gold Announces High Grade Gold Results Nixon Fork Gold Mine, Alaska
- Significant Previously Undisclosed Results: -- 0.79 opt (27.12 g/t) Gold over 30.2 ft (9.2 m) in hole N07U024 -- 0.76 opt (26.18 g/t) Gold over 10.8 ft (3.3 m) in hole N07U022 -- Results pending for 84 additional underground holes -- Results pending for 7 additional surface holes -- Geological re-assessment work 50% complete; resource update Fall 2010
Any thoughts on this one?
A1
PMG.TO PMGLF.pk Petrominerales Produces Candelilla-3 at Over 15,600 bopd and Cases Capybara-1 as Another Potential Oil Well.
This story just keeps getting better. Don't know if I'd classify PMG as a junior though.
A1
CREG.OB kept me in the black today.
China Recycling Energy - not a traditional energy company. Their niche is recycling waste energy from industrial plants in China.
They've been strong recently.
A1
Hi Jan, Snap, Kevin, and Marc...
Welcome to the board, and thanks for your constructive ideas.
I think the idea of paying TATF to perform overdue thinnings has some potential.
However, before sending any more money to TATF, I would advise all tree owners to either go down and inspect their trees themselves (preferably in the company of a professional forester), or have someone else (again, preferably a professional forester)inspect your trees for you.
It may be that your trees have so little value that it doesn't pay to spend any more money on them. This may be especially true for owners of non-teak trees, some of which grow so slowly that they will have little or no value even at 25 years of age.
Also, it may not be feasible to transport the thinnings. Matty mentioned that an hour's horseback ride was required to reach his trees. How would thinned logs from such a remote location be transported?
Finally, as I've mentioned in the Ibox, the main market for Costa Rican teak appears to be the export market (especially India). These customers seem primarily interested in logs, not sawn lumber. The harvesting and processing cost for logs should be substantially less than that for lumber, so the cost to tree owners may be less if the thinnings are sold as logs.
Steve Brunner has stated in the past, though, that he would only sell lumber, not logs. If Brunner/TATF are not willing to sell logs, tree owners may need to band together and sell them ourselves.
A1
Abn;
Since most posters on this board (including you) are anonymous, verifying the accuracy and truthfulness of posts is difficult. If multiple posts from multiple different posters say similar things, it tends to make the posts more believable. In re todolosabe's complaint about not being paid, I found something similar on another board
"Hi,
I have a cousin of mine who use to work with them in Costa Rica,
and as today she got fired and never got paid,they made her work
2 months without salary and as far as I know is many people with
the same problem,
I am talking about costarican citizen's,
as you can see is a big problem,
I wish I know more about them,but I am not in Costa Rica,
And about what my cousin is telling me,
she's an honest and hard working person,
so I hope she get her money back,
she wants to get a lawyer now,because is no way out,
good luck to you Bill,
you may want to find a little more about this company,
like I say I have no conection with them in any way,
all I know is what she told me,
the best of luck to you. "
http://www.homediscussion.com/showthread.php?t=155849&page=2&highlight=tatf
Excerpt from TATF's Special Opportunity
With this added space and this first group of volume processing machinery and equipment, we can begin producing a portion of our higher volume products, which will in turn allow us to begin again some of our thinnings on the farms and the corresponding distributions. (emphasis added).
It appears that reports of no thinnings on the farms are accurate.
A1
A new 'very special opportunity' at TATF.
More older trees on sale.
A1
Toyota secures lithium deal for hybrid car push
http://www.miningweekly.com/article/toyota-secures-lithium-deal-for-hybrid-car-push-2010-01-20-2
I wonder if this will drive up share prices for rare earth juniors.
A1
Survey Results
Results for the Communication from TATF? Survey
12 people answered the survey
Have you received a pre-thinning report since the Spring 2009 issue of Tree Owners News? 11 people (92%) answered no. No answer from one person (8%)
Have you heard any more about Tropical American Hardwoods since the Spring 2009 issue of Tree Owners News? 9 people (75%) answered no
One person (8%) answered yes.
No answer from two people (17%)
Have you received a cash distribution from TATF this year? 11 people (92%) answered no. No answer from one person (8%)
Have you received a report on the likely distribution if you choose to sell your wood on the local market?
11 people (92%) answered no. No answer from one person (8%)
A1
Stans Energy RUU.V up 48%.
Rare earth junior has been acquiring licences in Kyrgyzstan.
A1
Matty; the main reason for the survey is that, in the past, we have not been able to rely on TATF's or Steve Brunner's statements or projections. Steve Brunner made some statements/projections in the Spring 2009 Tree Owners News, which I referenced in my survey. In particular
"Our foresters will do a final evaluation of each stand of trees just before the thinning to determine the final number of trees to be removed and will send that information to the office. As soon as the information arrives from the farms, our office will prepare and send pre-thinning reports to everyone whose trees are about to be thinned. We hope to be all caught up by the end of this year." (emphasis added)
and
"You will soon be hearing much more about Tropical American Hardwoods."
and
"We will soon report to each of you who have young wood from trees that have been thinned or will soon be thinned showing what the likely distributions will be if you choose to sell your young wood on the local market or prefer for the young wood to go through the value-adding process to create higher values."
So the basic thrust of my survey was to attempt to answer the question:
Never mind what's happened in the past, can we rely on the statements, projections, and commitments Steve Brunner has made to Tree Owners in 2009?
A1
Matty;
As I recall, your father owns some 1996 teak. This teak is now 13 years old, so it's due for a thinning.
However, you raise a good point - only tree owners with trees that are due or overdue for a thinning should take the survey.
A1
Please take this survey:
I just posted a survey regarding communications from TATF this year. Please take a minute or two to complete this survey. To complete the survey, click on the 'Surveys' link above the posts.
Note, your answers are anonymous, and each IHUB user can only take the survey once.
Thanks!
A1
Check out CREG.OB. Chinese energy recycler - has been strong recently.
DOW 9000
OIL 70
Gold 1000
Hyperdynamics (HDY) signs LOI with Repsol.
[url]
finance.yahoo.com/news/Hyperdynamics-Signs-Agreement-prnews-3836385491.html?x=0&.v=1[/url]
I've been watching this one for a while. Highly speculative, but with lots of potential.
A1
Hawthorne Gold Announces Increase in Non-Brokered Private Placement of Flow-Through Shares
http://www.marketwirecanada.com/mw/rel_ca.jsp?id=1082378&k=
A1
Dear Ab - Actually I expect TATF to sell the logs.
There are many plantations who sell logs. Go to Alibaba.com
and search for 'Teak Costa Rica' or 'Teak Panama' or 'Teak Ecuador' Payment is usually made by irrevocable letter of credit prior to loading the containers on a ship.
A1
Ab - re Teak logs to India
Actually, I would expect the harvest and processing cost for logs would be much less than $0.29 per board foot for logs, for two reasons:
1) Much less processing is required for logs.
2) Since the logs aren't milled into lumber, there's no sawing waste, so the total number of board feet is higher (ie, the costs are spread across more board feet, so the cost per board foot is lower).
I would guess that a harvesting and processing cost of $0.15 per board foot would be reasonable for logs. Subtract this from $0.41 to $0.47 per board foot, and the net is $0.26 to $0.32 per board foot for the tree owner. Of course, as I mentioned above, the logs have more board feet than the milled lumber, so this is equivalent to perhaps $0.54 to $0.64 for milled lumber for logs from 13 year old trees.
If and when TATF can sell lumber in quantity (millions of board feet per year) for substantially more than $0.50 to $0.60 per board foot, I would be happy for them to mill my wood and sell it as lumber. Until then, it makes more sense to me to take a small distribution now rather than waiting many years (perhaps forever) in the hopes of a larger distribution later.
A1
Matty;
The price quoted for Costa Rica teak in the ITTO report is in India. The price paid for teak in Costa Rica will be less than this, because of freight costs. It's been a while, but the last time I looked at freight costs from Central America (actually it was Ecuador), the cost to ship a 40 foot container to India was ~ $2500. A 40 foot container can accommodate about 20 cubic meters of teak(limited by weight, not volume). This works out to a shipping cost/cubic meter of $125.
This implies a selling price in Costa Rica of ($300 to $325) - $125 = $175 to $200 per cubic meter.
A1
Re: teak logs vs. lumber & VAP
Dear abn;
I'm sure TATF and others would like to sell lumber and value added products, but buyers are more interested in buying logs.
In post 1294 on this board, wbbl59 writes:
" India and China are the largest customers but they rarely buy dimensioned lumber, all they want is the bucked tree (bore trimmed and cut in 6 to 8 ft. lengths). I would prefer to sell dimensioned lumber (higher value) but need to investigate the market."
In post 1093 on this board, Fred Morgan writes
"250 per cubic meter is what India is paying, which is considered the low end, about half of what you can expect if you find a buyer local.
But you can sell huge amounts to India at 250 per cubic meter with very little effort"
So the bottom line is that if you want to be able to sell your teak quickly, you need to sell logs for about $250 per cubic meter. If you want to sell lumber at a higher price, you need to be willing to wait a long time (years) in the hopes of finding a buyer willing to pay your price.
As for value-added products, Raleo is a good example of how difficult it is to sell significant quantities of lumber into this market. In the more than 5 years Raleo has been selling furniture, they've only used about 400,000 board feet of wood from TATF. This is tiny compared to the 4 to 5 million board feet TATF says they will be producing over the next year (in their Spring 2009 newsletter).
Given the quantities of wood TATF will be producing, the only way tree owners can be assured of receiving prompt (or any) payment for their thinnings is if TATF sells to buyers who are ready and willing to buy large quantities, which means selling logs at $200-$300 per cubic meter.
A1
The price of plantation teak logs...
...is between $200 and $300 per cubic meter, according to this link.
http://www.teak21.org/storysofar.htm
This works out to $0.50 to $0.75 per board foot. However, a direct conversion from dollars per cubic meter of teak in log form to dollars per board feet of lumber is somewhat misleading, as there is substantial waste in converting logs into milled lumber. Taking the waste and milling cost into account, a more realistic price for milled plantation teak is $1.00 to $1.50 per board foot.
A1
Teak plantation fund accused of fraud...
See link. http://www.expatica.com/nl/news/dutch-news/Teak-plantation-fund-accused-of-fraud_55604.html
A1
MAI is different from board feet produced!
Abngrrvn and justcfrall;
It appears that both of you are making similar errors when you consider MAI to be equivalent to board feet of lumber produced per hectare per year. In reality, board feet produced per hectare per year is much lower than MAI. MAI (mean annual increment, usually measured in M3 per hectare) is the increase in total wood volume for a given area per year. This wood volume includes the volume in branches, the tops of the trees, sapwood, pith, and other non-saleable wood.
The amount of board feet produced per hectare per year is often less than 50% of the MAI. For example, note 7 from TATF's teak projections page reads, in part
"The amounts of marketable wood for the thinnings and final harvest are based upon the calculated volume per tree and then reduced by the estimated amount of processing waste, which is sawing losses and damage to the logs while being harvested, transported and processed. The inefficiency of smaller diameter logs results in greater sawing loss on younger, smaller trees. Accordingly, we have subtracted a processing waste of 55%, 45%, 40% and 30% respectively for the 6, 10, 14 and 20 year old Elite Teak Clones and 55%, 50%, 45%, 40%, 35% and 30% respectively for the 7, 10, 13, 17, 21 and 25 year old seed-grown teak trees. "
http://www.tatf.com/teak_projections.htm
To arrive at appropriate MAI numbers, you need to use the tree growth and harvest projections, not the projections of board feet of lumber produced.
A1
Re: Math Check
Abnrgrrvn;
I agree with your math. 'Ethical Forestry' is projecting lumber production of ~38000 board feet over a 25 year period per 100 teak seedlings planted . TATF is projecting lumber production of ~14000 board feet over a 25 year period per 100 seed-grown teak seedlings planted.
TATF's projections for seed-grown teak are slightly above the high end of what Cedeno considers credible. However, TATF's projections for their 'elite teak clones', which is what they are currently offering for sale, are much higher (see post 300 for more information).
Neither TATF, Finca Leola, or 'Ethical Forestry' have published any data to back up their growth rate claims. Also, none of them provide any guarantees in regards to growth rates - the risk of growth below their projections is borne 100% by the tree purchaser.
A1
Disappointing news about Finca Leola
In post 1151, I mentioned that Finca Leola had agreed to a Cease and Desist Order relating to advertising their trees. I've since learned that a company called Ethical Forestry is now acting as a sales agent for Finca Leola in the US and the UK.
What I read on 'Ethical Forestry's' website was disturbing and disappointing. First, they are offering to sell trees for 60 GBP each (at today's exchange rate, this works out to almost exactly $100 per tree - by far, the highest price I have ever seen for this type of investment).
Second, they have two different sets of growth projections on their site, which differ by a factor of two in the projections of board feet produced.
http://www.ethicalforestry.com/teak.php
http://www.ethicalforestry.com/pdf/EFTeakProjections.pdf
I first noticed this difference over two weeks ago, so this is not some momentary glitch. Having such a glaring discrepancy on their web site for so long sends a very poor message about 'Ethical Forestry's' professionalism.
Third, even using the most conservative of the two sets of projections (the one in the pdf file), the projected growth rate is very high. Based on the numbers in the PDF file, and using a 3.5 X 3.5 meter spacing for the teak trees (which Fred Morgan has stated he is using) 'Ethical Forestry' is projecting a mean annual increment of ~ 41 cubic meters per hectare. This is about twice as high as the highest MAI for teak that has been reported up to now, according to this link http://www.treemail.nl/teakscan.dal/files/traders.htm
It's the same old story - charging sky-high prices for trees, and justifying the prices with optimistic growth projections. The fact that Finca Leola has made 'Ethical Forestry' their sales agent for the UK and the US makes me wonder if Finca Leola has any concern for the purchasers of their trees.
A1
Mining regulations in NW Territories, Yukon, etc.
Can anyone provide a brief summary and/or a link to an overview of the mining/permitting regulations in the NW Territories and the Yukon, especially as regards to the rights of the First Nations?
TIA
A1
MattyO, re 'cease-and-desist'
Seems to me it was a pretty standard 'cease-and-desist' order.
What's significant to me is that the state of Colorado believes that Finca Leola was violating their securities laws by offering to sell trees to investors in Colorado, without registering their offering with the state government.
This raises the possibility that Finca Leola, TATF, etc, have been operating in violation of states' securities laws when they offered to sell trees to residents of those states, unless they first registered their offerings with the states, which I'm pretty sure they haven't done.
A1
Found article when searching Finca Leola...
http://www.dailycamera.com/news/2009/jun/25/state-tells-boulder-man-stop-seeking-tree-investor/
A1
Hi Mass;
Thanks for your reply. Did you ask TATF to sell the wood from your thinnings on the local market, or did you elect to wait for Raleo? In my opinion, if you elect to wait for Raleo, you will be waiting for a veeery long time.
A1
Mass45;
Could you read and answer the question in post 1136 please?
Thanks,
A1
Has anyone received an estimate from TATF re the value of their thinnings if sold on the local market?
In their Spring 2009 Tree Owners News, published on ~ Mar. 20 of this year, TATF made the following statement
" We will soon report to each of you who have young wood from trees that have been thinned or will soon be thinned showing what the likely distributions will be if you choose to sell your young wood on the local market or prefer for the young wood to go through the value-adding process to create higher values."
Has anyone on the board received this type of communication from TATF?
TIA
A1
Ibox has been updated.
A1
NGP.V NGLPF.ob Nevada Geothermal rising rapidly.
This geothermal company pulled forward the startup of its first power plant by 3 months.
A1