Central Asia Metals Share Discussion Threads

[mount teide] 25/2/2019 08:29

Zinc, Copper and Lead up 19.5%, 16.9% and 11.4% respectively from the Q4/2018 correction lows.

Compared to H2/2018, Q1/2019 will be generating a step change increase in revenue/profit across the production of all three metals.

[lauders] 23/2/2019 00:09

Thanks for that link TFC. Oh to have bought in November 2001 and sold in June 2006! Quite a climb! Link repeated again for those who just like one click:

[thefartingcommie] 22/2/2019 18:43

hxxps://www.macrotrends.net/1476/copper-prices-historical-chart-data

[thefartingcommie] 22/2/2019 18:42

could be some way to go......

Copper Prices - 45 Year Historical Chart

Macrotrends


Source

[someuwin] 22/2/2019 11:49

...It will be soon - imo.

[3noddy] 21/2/2019 20:23

Meanreverter - They make everything big in Texas....100 billion dollars per wind farm does seem a little excessive though! (all these “experts”; like to mix up their tons and tonnes, but mixing up tons and pounds??) I must still have been half asleep when I read it this morning...I wonder what Frank’s excuse is!

[v11slr] 21/2/2019 10:44

I think he got his info from wikipedia and typed 'tonnes' instead of 'pounds'.

"A single wind farm can contain between 4 million and 15 million pounds of copper. A photovoltaic solar power plant contains approximately 5.5 tons of copper per megawatt of power generation. A single 660-kW turbine is estimated to contain some 800 pounds of copper."

Still a lot of copper though.

[meanreverter] 21/2/2019 10:25

3noddy — In the article you cite, Frank Holmes has revised his estimate of the amount of copper installed in a typical wind farm — from 16 million tons to 15 million tons! Whether he means tonnes or US short tons, it amazes me to see such stuff being published, particularly on a mainstream media site like Forbes.

[3noddy] 21/2/2019 06:45

BRWM last reported holdings: Top ten holdings as at 30/09/2018 represent 74.4% of the total investment of the fund (Glencore plc 11%).
www.blackrock.com

[zangdook] 21/2/2019 01:55

"Top ten holdings as at 28/02/2018

2 Glencore Xstrata PLC 8.6%"

That's funny. It changed its name back to Glencore in 2014. Not sure I'd take that list too seriously if part of it is four years out of date.

[mount teide] 20/2/2019 16:05

Copper hits $2.92/lb - $6,436/tonne

[mount teide] 20/2/2019 12:23

Caney - correction - it is post number 51 have edited previous post accordingly.


The Blackrock World Mining Trust (BRWM) is up 14.1% from the December low - it is now at a 5 month high and continues to make higher highs and higher lows.

The top ten holdings represent over 60% of the total investment of the fund - which is a bellwether for the sector.


Top ten holdings as at 28/02/2018

1 Rio Tinto Plc 10.7%
2 Glencore Xstrata PLC 8.6%
3 BHP Billiton Limited 8.4%
4 Vale S.A. ADR 8.0%
5 First Quantum Minerals Ltd. 7.8%
6 Teck Resources Ltd 6.1%
7 Sociedad Minera Cerro Verde 3.7%
8 Newmont Mining Corporation 2.9%
9 South 32 2.6%
10 Lundin Mining 2.5%

[caney] 19/2/2019 22:48

Thanks MT, I'll take a look

[mount teide] 19/2/2019 19:55

carney - i would refer you to my post number 51 on my JSE thread.

Basically, shieldbugs claim of 'manipulation' was his own shoddy research - namely a failure to properly read the admission document, where the information on the contingent liabilities he claimed the management were 'hiding' was published in an extremely detailed manner giving investors complete transparency on the subject.

£30m of the Contingent liabilities have already fallen away and much of the rest will either go the same way or will be hugely covered by the financial upside JSE generate from triggering any payment.

[shieldbug] 19/2/2019 18:51

Not sure why JSE is being examined here anyway.

[shieldbug] 19/2/2019 18:44

MT - we went through this in October.

[mount teide] 19/2/2019 16:14

Copper currently at $2.87 - a close above $2.857 would be bullish as it would signal a technical breakout from the range charted since early Q3/2018.

'If CAML manipulated their numbers the way JSE do I would never have invested.'
'Would you mind expanding on how you think they’re manipulating the numbers please?'

I doubt the two high performing US Hedge Funds with JSE Board representation who currently hold 33% and continue to aggressively average up, and eight other blue chip II's holding 36% are waiting with bated breath!

[caney] 19/2/2019 11:41

Shieldbug, would you mind expanding on how you think they're manipulating the numbers please? I've only done some preliminary research, so would be very interested to hear your thoughts. Thanks in advance.

[mount teide] 18/2/2019 09:53

shield bug - nearly 50% of global oil production comes from petro-nations that need oil at $80+ to balance their fiscal budgets.

If it were not for the US Investment banks throwing many hundreds of $billions at the US shale industry over the last decade - an industry which is still mostly unprofitable under $60 bbl and has hundreds of $billions of debt they are struggling to service - oil would probably never had dropped back below $80 bbl, its mean price since the 2008 finial crash.

The shipping, oil and industrial metal markets have largely remained tied at the hip for most of the last 50 years - it would take a very courageous investor to bet against a material change in that close relationship.

Oil and copper have outperformed Gold as a store of value against inflation by many, many multiples over the last 30 years.

Despite being responsible for the entire 34 million bopd increase in global oil consumption since 1980 - oil consumption per capita among the Nations of Asia and China (combined population more than 5 times that of the USA and Europe) is still only a combined one ninth that of the West.

Regardless of the impact of electric cars over the next decade - anyone betting on peak oil consumption/cheap oil anytime soon is likely to be highly disappointed.

AIMHO/DYOR

[shieldbug] 18/2/2019 09:11

If CAML manipulated their numbers the way JSE do I would never have invested. Oil and copper have been correlated in the past but I think they have or will de-couple in future. I also don't see a strong correlation between mining and pumping oil. There appears to be no shortage in global oil supply but finding and mining metals economically creates a clearer opportunity for investment.

[mount teide] 17/2/2019 16:30

Advfn - an observation - the number of posts on the threads of companies i hold or have on watch has fallen materially over the last six months - a contrarian market signal?

CKN has been one of my most successful investments since first taking a position in 1999/2000 - it has mostly had a thread as quiet as church mice for the past 20 years yet:

Matching my £50,000 initial investment in 1999 (i averaged up 9 times during 2001 and 2006) would have generated capital growth of £1.38 million, dividend payments totalling £410,000 and a current annual dividend of £44,000. Not too shabby for a £50k starter investment in a well run but beaten down recession ravaged company at the end of a 8 year decline/recession stage of the long term cyclical shipping/commodity market.


With the:

* Dry bulk and tanker shipping sectors now back close to a supply / demand balance for the first time in nearly a decade and,

* Many industrial metals in supply deficit with a looming supply crunch ahead due to a combination of decade low warehouse stock levels, a waterfall drop in production development and exploration capex since 2014/15, together with:

A long term highly material fall in production head grades at the 10 most globally important copper mines and an expected acceleration of the long term 2.5% annual growth in global copper consumption over the next decade, as a result of new and rapidly accelerating demand from EV's and the electrification of energy supply.

* The oil market's expected move back into balance during Q2/2019 from Opec following a policy of "doing whatever it takes" via production cuts to balance the market (ie keep oil prices at/close to what they need to balance their fiscal budgets - $80/bbl in the case of the Saudi's )

As a consequence, the shipping, industrial metals and energy sectors should increasingly see their strong fundamentals return to the fore in 2019 and beyond and, drive the pricing in these markets as the largely overstated and short term impact of the China/US trade tariff spat declines.

My research posted in late 2016 and re-iterated during 2017 following the bottoming of the shipping/industrial metals/oil markets in Q1/2016 after declining for circa 7 years, suggested a market peak for this new business cycle of circa 2024/25 - and that based on fundamentals it would likely take out the previous copper cycle peak of $9,900 set in 2010, and see the shipping market likely peak at circa 75% of the astronomical all-time Baltic Dry Index high of 2008.

Highly regarded Nat resource analysts at CRU continue to suggest a similar timeframe (early part of the second half of the next decade) for the next copper cycle peak.

Have seen little since 2017 in the shipping, industrial metals and oil market to change this view - although I would add that the inflation adjusted copper and oil price of the last cycle peak is already $11,800/tonne and $179/bbl respectively in today's money - against current pricing of $6,200/tonne and $65/bbl.

AIMHO/DYOR


In addition to cyclical market exposure to the Industrial metals and shipping sectors - Jadestone Energy (JSE) a Toronto and AIM listed O&G Exploration and Production company operating in SE Asia and Northern Australia is well worth a look at this early point of the recovery stage of the new oil market cycle.
.
In the energy hungry markets of Asia Pacific region(responsible for the entire 34 million bopd global growth in oil consumption since 1980), second phase O&G specialist Jadestone Energy is at the forefront of a move by smaller regional players to take advantage of the investment opportunities being thrown up as US Majors and IOC's increasingly retrench from the maturing region, where over two thirds of production is now coming from mid life and mature fields.

If the outstanding Jadestone management(headhunted by its two activist US Hedge Fund shareholders who recently increased their combined holdings to over 33%) continue to create exceptional value by implementing a fully funded fast track organic growth programme combined with the purchase of carefully selected mid-life/mature assets from the Majors and IOC's operating in the region, then market greed over time will do the rest.

The new Jadestone management are primarily the ex-Talisman Asia Pacific team led by Paul Blakeley, who delivered 11% CAGR production growth over 10 years in the Asia Pacific region creating a US$6bn NAV business - they have deep knowledge of the region's key hydrocarbon basins and assets.

Jadestone's latest regional acquisition from Thailand's IOC PTTP saw them receive a $92m cash and oil transfer on completion of the $195m Montara Field asset purchase in September 2018(effective date 1st Jan 2018) and an additional $22m to cover a subsequent 2 month maintenance shutdown.

Key acquisition highlights include
— Production: 10.3 mbbl/d
— 2P reserves: 28.2 mmbbl, NPV10 of US$480mm
— PRRT tax losses c.US$3bn, effective tax rate 30%
— Significant value creation opportunities
- Acquisition part funded with US$120mm Loan
— 50% of 2PD production hedged at an average swap strike of US$72/bbl, partial upside protection via calls at US$80/bbl in 2019 and US$85/bbl in first 9 months of 2020

At current Brent price, JSE's 2019 oil hedge and $2 SE Asian market oil price premium is probably generating an average of circa $70/bbl on Montara's current production of 10,000 bopd.

Average 2018 Montara production was 7,615 bbls/d (excluding Nov-Dec downtime for the recent inspection and maintenance work), during which Brent averaged $73/bbl.

Considering Montara built a $92m cash and oil transfer(circa $10 million a month) on those barrel numbers and POO; then at 10,000 bopd and an average realised oil price of circa $70, the field in cash flow terms should be currently performing significantly ahead of that.

The Montata assets also include a very large FPSO vessel (with 15 years of dry dock free operating life remaining) that has 45,000 bpd processing and 900,000 barrels of storage capacity. The Montara Field deal has seen Jadestone's management secure an asset with 28.3mmbbl of P2 reserves(with upside potential) that is currently generating circa $10+ million a month of cash flow for the almost unbelievable net sum of $81m!

To put this in perspective - Premier oil are paying BW Offshore a charter contract fee(10 year initial fixed duration) for the FPSO BW Catcher of $210m per annum. BW Catcher has a processing capacity of 60,000 bpd and a significantly smaller storage capacity of 650,000 barrels compared to JSE's Montara FPSO.

Jadestone has a fully funded organic growth development programme targeting c.30 mboe/d in the next five years - added to which they intend to bolt on further regional acquisitions of a size similar to Montara. Jadestone expects to commence a maiden dividend in 2019.





AIMHO/DYOR