Blackrock World Mining Share Discussion Threads

[blueledge2] 11/12/2015 11:47

All I an say about my investment in BRWM is; ouch!!!!!!!!!

[rcturner2] 11/12/2015 10:55

Aleman, you have always stated that you are not concerned about the capital position and are investing for long term income. Yet here you are posting five times a day about intraday and overnight price changes on commodities and commodity stocks. It does not match up.

[aleman] 11/12/2015 10:30

First Quantum, which were over 9% of BRWM's portfolio at the interims, are up 3% today and 18% in the last 2 and a bit sessions, although it is just a bounce form a similar fall in the previous few sessions. I'm not convinced we've hit bottom yet but I think we are seeing the beginnings of a bottoming out pattern unless we see a number of economies tip into recession. That seems unlikely to me with oil under $40 which traditionally acts as a stimulus. I think we are more likely to see recession come when oil rises and the generl price pressure it brings raises interest rate expectations as well. The bounce of the last few days breaks First Quantums 7-month downtrend and suggests a significant jump from here, perhaps doubling, although the longer term downtrend is still in place at higher levels.


free stock charts from uk.advfn.com

[aleman] 11/12/2015 10:01

Interesting developments in the copper price overnight. It has been in a narrow triangulation for a month which coincides with the rise in comex stocks pausing. Now it is starting to look like Nymex stocks might be startign to fall along with LME stocks and China may be starting to buy again. The 5 cent jump overnight breaks it out of the triangle to the expected resistance at the top of the triangle from wen it started a month ago. I think chartists would say a break abpve this $2.13 level would be the start of an uptrend. Have the announced closures which could now leave 2016 in a supply shortfall done enough to break the downtrend?

[my retirement fund] 10/12/2015 14:39

His foray into the trust £3+ is fine the capital losses meaningless his glass is half full. After all the yield will soon take care of capital losses and you know what even if the divi is cut by 75% it will still make up for those losses!Yea right. Some people make bad investment decisions and some people simple cannot admit they made a bad call.Shall be all carry on with half full glasses, ignorant and happy in our self denial, yes lets do that.

[aleman] 10/12/2015 14:29

FTSE miners nearly given up all this mornings gains. Base metals dropping again. Presumably, it's dowm to poor US unemployment data.

[my retirement fund] 10/12/2015 14:27

Lol the resident purple poster is almost turning into a desperate ramper.How sad.

[ramridge] 10/12/2015 12:40

Hi Prof Pettigrew - I am keen on buying this stock (falling knife and all that) but don't have a sense about how far it is likely to fall. On the other hand you seem to have a view that the floor is between 130 down to 100.
Question for you. What the answer to the question *in your view* , "it is highly unlikely that this stock will fall below xxx. " What is xxx and why?

[aleman] 10/12/2015 10:03

Presentation seems to have gone well as GLEN are off again. Now up 14%. FTSE miners up 3.8%. Looks like a bit of a short squeeze going on. The volatility could be good for BRWM options writing.

[aleman] 10/12/2015 09:33

On the forecasts that GLEN are giving, which are based on current spot prices, they could return to paying dividends in 2018, or maybe even late 2017. GLEN up 10% now. FTSE miners index up 2.9.% this morning. That's over 6% since yesterday's open.

[aleman] 10/12/2015 08:13

Well, I expect somebody to go bust but it doesn't sound like it's going to be Glencore on those numbers. Metals prices could get worse but there are forecasts of undersupply of tin and copper in 2016 abd China is increasing iron ore intake again. As expected, supply is being cut and demand is increasing as markets adjust to lower prices. It had to happen. They are always a bit slow to get going but it seems well under way now.

GLEN shares opened up 7%.

[llef] 10/12/2015 06:29

some posters here expect Glencore to go bust in 2016, they have given an investor update today, there will be a conf call at 8.30..

Debt reduction/capital preservation measures increased to $13 billion (previous target of $10.2 billion) with $8.7 billion already achieved/locked-in New net debt target of $18-19 billion by the end of 2016 (previous target of low $20s billion)

More than $2 billion of free cash flow at spot prices; Glencore will remain comfortably free cash flow positive at materially lower price levels

Further reduction in capex: $5.7 billion for 2015E and $3.8 billion in 2016E, down from $6 billion and $5 billion respectively

[p1nkfish] 09/12/2015 22:11

Reading the posts some are falling into the trap of projecting recent price behaviour into the future.

The management of the portfolio companies are profit motivated. They will force adaption to regain profitability. News of closures, cutbacks and exceptionals costs due to headcount reductions are order of the day and all part of it. The future is a return to profitability - some time.

World population isn't shrinking and we won't stop wasting minerals.

Are there better return opportunities elsewhere?

Certainty doesn't exist in the markets.

[inomario] 09/12/2015 20:08

Every downturn contains the seeds of the next upturn (and vice versa). Excessive supply causes prices to fall, uneconomical mines get closed or are mothballed, which reduces supply which causes prices to rise ...

Of course, there are other factors at play, including reduced demand from China, which could delay the timing, but the eventual upturn is inevitable.

They say that if you throw up a feather in strong wind you may not know when the feather will fall to the ground, but it's a sure thing that it will eventually fall.

I'm not good at timing and there could be one or more legs to this downturn, but I'm betting on an eventual turn of the cycle (and on BRMW being a good vehicle to exploit that). I might be early, but I'm willing to buy more on the way down.

DYOR and remember that I have a vested interest in seeing the price of the shares go up.

[pixi] 09/12/2015 19:58

The world is drowning in debt so how can the Fed put up interest rates?

[llef] 09/12/2015 19:26

(High cost) chinese Iron Ore producers are suffering due to the Yuan being almost fixed versus the dollar. If the Yuan devalues by 15% next year (as some anyalysts predict), this could prolong the pain for non chinese iron producers like BHP, Rio and VAlle.

[llef] 09/12/2015 19:24

It looks like american and zambian mines are likely to be first casualties of any closures.

Zambia is probably suffering due to lower ore grades, and other countries (like mexico, peru, chile, oz) are benefiting from their ccys falling like mad versus the dollar which reduces their labour costs (in dollar terms).

E.g. Nystar announced last week teh closure of a zinc mine in Tennessee.

[llef] 09/12/2015 19:18

They are shutting a mine in arizona which produces 100m pounds of copper per annum (45,000 tonnes). This will bring their total cut in copper output to 350m pounds (160,000 tonnes).

I think Glencor announced in October that they were cutting 400,00 tonnes of copper by mothballing mines in zambia.

Vedanta have also mothballed an underground copper mine in zambia

[rcturner2] 09/12/2015 19:06

The blood on the streets quote is a pretty old Rothschild quote I think it refers to the napoleonic wars!

[aleman] 09/12/2015 18:42

It was down to 1.9% at the interims. The shares are up around 6% at the moment. I think their increase cut to copper production next year amounts to about 0.2%+ of global production?

[llef] 09/12/2015 17:08

freeport mcmoran (4% of fund dec 2014), suspends its dividend

Freeport-McMoRan Inc on Wednesday suspended its annual dividend and made deeper cuts in capital spending and copper production, the latest mining company to act to preserve cash as a commodities' price downturn enters its fifth year.

[inomario] 09/12/2015 16:46

"The best time to buy is when there's blood in the street" (Templeton, I think).

The future is unknowable, but mining is in a vicious cyclical downtrend and at some point, maybe tomorrow or maybe in 5 years' time, the cycle will trend upwards.

I bought some BRMW this afternoon even though I felt quite uncomfortable doing it. I don't know what, if any dividend, will be paid in the future and I don't know whether the share price has found a floor or whether it will halve from here. However, I think that there's a favourable risk reward scenario here.

I could be wrong, of course.

[my retirement fund] 09/12/2015 11:45

In a few years time when the discount to NAV is rather wide and the income is long gone, everyones going to be calling to wind the fund up to realise whats left of the discount. Wonder what the sharprice will be?