Chromex Share Discussion Threads

[eelanguilla] 12/6/2010 00:36

robson1974 - 12 Jun'10 - 00:20 - 290 of 290

just trying to get my head around the economics here

.........

same again ... dear me ---- might i suggest a text book .. or some chewing gum ?

[robson1974] 12/6/2010 00:20

just trying to get my head around the economics here

the Astaire note from 2008 talks about



production for y/e Sept 2010 of 360kt
long term chromite (lumpy) price of $205/t
2010 FY Rev / EBITDA / Net Profit / EPS

£38 / £16m / £10m / 15p

current expectations are for production of 20kt p.m. (implies 240kt p.a.) growing to 40kt p.m. (potentially 480kt p.a.)

pricing judging by the recent RNS is consistent with the $205/t level

i appreciate given the commodity,market, limited mine life you'd only apply a low PE but even a 3x or 4x PER would give a share price of 45-60p implying a value for the warrants of 25-40p ?

any views

[robson1974] 11/6/2010 16:01

Have set up a warrants thread here



maybe you could add a link to it in your header ?

[sailing john] 10/6/2010 13:16

A little bit of buying today - well quite a lot for Chromex
All at 24p :-)
Expecting interims soon - should be the start of market awakening to the fact that they are now actually mining product and a good outlook statement regarding doubling of production, strong prices, sales contract, progress in Zimbabwe and hopefully something positive about Mecklenburg.
SJ

[seagreen] 09/6/2010 17:26

Which is nice

[sailing john] 09/6/2010 16:24

World news
Outokumpu - Finland to double FeCr production to 500kt/yr
More FeCr investment - a good sign :-)
SJ

[sailing john] 04/6/2010 08:28

SA FeCr likely to remain in the range $1.30-$1.40/lb for Q3.
Chromex interims soon? - next week? - 3rd June last year
SJ

[sailing john] 02/6/2010 09:39

World news - Canada
Cliffs looking to take full control of Big Daddy chromite resource in Ontario by buying out minority holders KWG and Spider. They are reported as offering a 62.5% premium to the closing share prices of KWG and Spider.
More positive demand/pricing news IMHO :-)
SJ

[kenmitch] 28/5/2010 20:02

It's 50/50 re extending the POGW warrant expiry date. They risk losing £100 million if they don't. Decision has to be made by June 2nd. A down day on Tuesday might clinch an extension.

As for CHXW a "fighting chance" sums it up. Again the share price has not built on an initial bounce. The next stage is usually a fall back. Hope it is different this time.

[bo doodak] 27/5/2010 20:31

Kenmitch,
Hope it goes your way. I can't argue with your logic and at least with expiry some time away you have a fighting chance.

O/T
POGW is an intriguing one I must admit. The equity itself has often behaved very oddly IMO, and its not obvious that increasing shareholder value or acting in their best interests can always be catered for as top priority by management, due to all the constraints of operating in Russia.
Hopefully, at some point profits/increasing POG should overide that though.
I know the solid arguments for extension but I just have a 'gut' feeling that I just can't shake that warrant holders are going to get disappointed.

[moosh2] 27/5/2010 19:49

i think i get it now. thanks.

i wouldn't say this share has been held down. from a techy viewpoint, monthly macd has been bearish (macd below signal and below zero - both of which can be a hinderance to major upward movement). currently weekly macd gone +ve last few weeks, which is when big moves come in, which, when combined with +ve RNSs can result in consolidation at higher share price levels (daily 9/26/200 EMAs also appear to be following elliott wave theory so at least that's working!). goldplat have been monthly macd bearish for nearly 2 years (!!), despite increasing revenues/profits/+ve RNSs. fundamentals for a company may be great, but if the longer term techs are bearish, not much other than superduper news which makes the MMs open the share price at 50-100% up from previous day will cause a new uptrend to start, so we just have to wait for things to pan out naturally. all IMO. but while monthly/weekly macd bearish, worthwhile just building up a free holding in dribs and drabs on the daily fluctuations cos' PIs generally don't know about all this macd rubbish and just tend to buy if the share price is going up, which makes it easier to sell in a mini-demand.

[kenmitch] 27/5/2010 17:53

Agree Bo that I should have mentioned liquidity and the wide spread.

But one way round any difficulty selling in size is to exercise at 20p. It's a nice cheap price at which to exercise, unlike with POGW about to expire (unless they use a clause allowing them to extend) but with an exercise price of around £12 compared with a current warrant price around 30p.

My key point is worth repeating. It's simply that those who are confident the shares are heading for 45p - as some here were posting a couple of days ago - then those who are so confident really should buy the warrants, as a rise in the share price to 45p should see the warrant go from 8p to buy to 25p to sell. That's a triple for that target price.

I'm NOT confident and this share has been a let down for ages - but I'm going to hold on to my warrants in case this time it is different and the shares do at last get moving up.

[sailing john] 27/5/2010 16:42

27 May 2010
Bullish presentation to ICDA by Markus Moll, MD of Steel and Metals Market Research (SMR), Moll told delegates "We're more or less back to the long-term trend of 5% growth per year for stainless steel, and that will continue through to 2020,"

[bo doodak] 27/5/2010 16:27

Fair enough Kenmitch, my purpose wasn't to disparage your character, simply to ensure possible buyers think carefully about the major downside - liquidity.

Not holding at present, but have dabbled before in these, and agree they do have much possible upside yet again, but my personal feeling is they probably won't progress much until after we get the next serious market correction.

[sailing john] 27/5/2010 15:52

Moosh - The way to think about it is this - extreme example
If the shares were trading at 20p and you wanted 1m shares would you rather pay £200k to hold shares or have some free warrants. Of couse you would have free warrants as no downside risk to you and the same would apply if shares were 19p even though your warrant starts of at -1p it is not money you have to stump up. In the real world they are obviously not free. Even at 20p or less the warrants have a value because of the leverage you get but it might only be 3 or 4p. It is simply a measure of downside risk vs upside potential If the share price goes well above the warrant exercise price then the leverage starts to disappear and the differential between warrant price + exercise price and the actual share price starts to disappear.
Hope that makes sense
SJ

[sailing john] 27/5/2010 15:41

That's just the leverage and spread.
SA press reporting Transnet strike over - back to work tomorrow.

[moosh2] 27/5/2010 14:02

so if current CHXW to buy is 8p, then warrant share price 28p?. but CHX share price is 26p to buy. so aren't you paying over the odds already on the CHXW?!

[kenmitch] 27/5/2010 09:44

moosh2

You must be looking for problems that aren't there.

It is just simple arithmetic and nowt else.

To work out the value of the warrant simply deduct 20p from the share price and the resulting figure gives you the "correct" warrant price.

e.g share price 25p. Deduct 20p. Warrant is worth 5p

e.g share price 50p. Deduct 20p. Warrant is worth 30p.

e.g share price £2 - dream on! - deduct 20p. Warrant price £1.80.

I can't explain it any better than that.

The only other thing to work out - again obvious

Share price 19p - deduct 20p and the answer is minus 1 and if that is the share price at expiry time then the warrant will expire worthless.

All warrants have a final exercise date - the longest Raven Russia warrants out to 2019, and of course an exercise price.

For Chromex it is 20p exercise price and expiry on 7th September 2011.

[kenmitch] 27/5/2010 09:37

Bo Doodak

I can understand why you think that, but I haven't posted for those reasons.

I'm not looking to exit yet as there is a chance that this time the share price rise might be sustained, and having held the warrants for several years - at a loss most of the time - why exit now when at last the chances of the share price gains continuing seem a bit greater than when that has happened in the past.

There's also been a post on the ADVFN warrant thread saying "buy" Chromex warrants and I posted there too to agree, but also pointed out that the shares have often risen only to fall back again.

Also if posting for the reason you said I would NOT have bothered to do the post explaining things (unsuccessfully!) for moosh2.

You'll have to take my word for it, but I've been posting for years and have never tried to take advantage in the way you suggest for my own benefit.

What I will be watching is if the shares and warrants rise further but then the shares start falling back yet again THEN I might well get out.

EDIT. Forgot to say that Chromex tends to ignore big market moves in both directions! Look how it did nothing while the market was soaring in 2009 so I doubt it to go up or down much now either on good or bad days generally.

[bo doodak] 26/5/2010 20:40

Kenmitch,

I know you are are knowledgeable respected poster regarding warrants but I'm not sure you are being totally candid on your motives here raising this topic of warrants at precisely the point the shares start to rise, bearing in mind you already hold these warrants and may wish to exit as the markets are particulary unstable right now and they are very thinly traded.

[sailing john] 26/5/2010 18:48

Thought we would get a mention in the press. Bet we will be in IC in the next few weeks and some more tipettes in National Press.
SJ

[moosh2] 26/5/2010 12:22

warrants sound a bit complicated. still to regular shares!

CHX got mention in Daily Mail today but paragraph finished mid sentence so don't know wot the end of it was and couldn't find the end anywhere! v bad editing :/

hoping for good day tomoz.