GFRE - everything will come out at the quarter - they have been rock solid on performance, govt checks production, controls production with yearly inspections etc and pub data (see geoinvesting)
Bromine is up to over $4,000 per ton –
They have not provided any guidance on 2011 because they are so conservative, and with the price going up and up they wanted to wait until 10k
Unless the govt limited production for 4th quarter, they will kill 2010 numbers and blow out profit and guidance for 2011 will be off the charts with Bromine at $4,0000 –
US based firms/Alb has said in conference calls that Bromine could be $6,000 soon
Deloitte internal study will be addressed in 10k, but they are pretty simple operation with one of only 6 licenses given by China in the whole country and 14 or so clients – they have 10 production areas with 4,000 wells –
All international competitors state GFRE has 20% of China market, so it will be hard to point fraud at GFRE –
They have a $120m shelf which has been around for 6 months or so for a major purchase of phama bromine production SOE in China - but nothing yet –
They just purchased a group of 9 mining locations in Jan (when looking at the SEC filing look at map – very important that most investors miss) in the most Bromine rich area of the province all around their best producing #1 location/wells location which does 10,000 tons a year and was the first purchase of the firm - to me emo it looks like the local govt who the CEO is a major party boss of, sold GFRE an bunch of salt producing SOE for $10m so that GFRE could start getting the Bromine out - state has been mining salt out of these 9 areas for years (sold as one area but many miles apart), but does not have the money or expertise to process Bromine - GFRE putting in test wells now in the area - my bet is that they find Bromine for at least another 500 wells which is about 5,000 ton a year at $4,000 per ton.
GFRE had relations with shady individual 5 years ago for R/M who is now gone –
BDO Limited is large top 10 accounting firm in HK which is now #5 or #6 and is mostly Chinese owned - while it is not Top 4 the CEO may have insights –
GFRE is very very well connected in the Party with CEO being a long time party heavy who is very well respected and how has done a fantastic job cleaning up the pollution from Bromine - the key reason China party wants to have only a few Bromine miners is to make sure they clean up the very very bad pollution left from 40 years of mining - GFRE is very very effective at cleaning up areas they buy to put in all new wells (4,000 new) take away and clean past pollution from mining by SOE and the party trusts them for this pollution cleanup - this is a very very big deal in China – hundreds of mines or off line today because the party does not trust them to clean up so they are not allowed to pump – very very strick control of all Bromine in China – no firm would ever buy from a non-licensed firm – so very very good market control for GFRE thanks to China Govt and having one of 6 licenses.
GFRE is the main firm that is mining Bromine for resale – the other 5 mostly mine for their own manufacturing.
Is it a buy? I am in very hard and have purchased more - I am in CCME also, and will be long YONG in a few months.
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