Central Asia Metals Share Discussion Threads

[edjge2] 09/7/2018 13:40

Been buying Cu base metals miners as CAML, KAZ rather than silver/gold miners on expectation shieldbug's post. I am sure wiring, battery and weight will be reduced in future vehicles, 5 years on.

[cflather2000] 09/7/2018 13:40

It's a fair point Gary. I'd be interested in finding out how much copper a project like that will use. And zinc and lead for that matter

[shieldbug] 09/7/2018 12:45

Gary

Could be right that many streets have electricity to the lamp posts. Not sure how much additional would be needed for ports and cables etc. However according to hxxps://www.copper.org/publications/pub_list/pdf/A6191-ElectricVehicles-Factsheet.pdf
a significant amount of copper is used in the vehicles themselves. "While conventional cars have 18-49 pounds of copper, hybrid electric vehicles (HEV) contain approximately 85 pounds, plug-in hybrid electric vehicles (PHEV) use 132 pounds, battery electric vehicles (BEVs) contain 183 pounds, a hybrid electric bus contains 196 pounds, and a battery electric bus contains 814 pounds, most of which is used in the battery." Not sure how accurate this information is.

[gary1966] 09/7/2018 12:02

I haven't seen this mentioned on any copper company BB but just wonder how much this will undermine the projected boon in Cu prices. I only heard about this, this weekend as visited friends, one of whom works for Jaguar Landrover. There has been a large suggestion that it is the infrastructure for charging points that is the major driver for Cu demand in years to come.



This will easily be replicated around the country and I would suggest with a much lower use of copper as electrics are already there in the lamp post.

[shieldbug] 09/7/2018 11:33

Thanks Csh

[cshfool1] 09/7/2018 10:36

According to Louise at Investor relations who was kind enough to call me back it should be latest Wednesday 11th for the Operations update, as you say its been the first week in July last two (non Sasa) years. Perhaps the joint results from both mines needs a little more time which would be reasonable I think (guessing). Does anyone want to hazard a guess at the next set of numbers?

csh

[shieldbug] 09/7/2018 09:13

Is there any news on an operations update this week? There was one on 5th July last year - but do they announce when they are going to make them or do they just appear out of the blue?

[mount teide] 09/7/2018 00:59

Despite a sharp circa 20% pullback since April - the short position has only increased very marginally from 1.35% in April to 1.54% in June.

[kenmitch] 05/7/2018 17:40

Thanks for reply and confirmation (I was certain about it) Mount Teide that KAZ is indeed a very low cost producer. For those wondering about KAZ, share is very volatile and after recent drop from nearly £11 to just over £8 looks good for a bounce as soon as copper price moves up again.

Previous share price dips have proved buying opportunities ever since the nadir around 80p at the end of that incredibly severe mining sector bear market that ended early 2016. Not quite as confident this time because of trade war uncertainties. But good chance that is largely priced in. Also once/if Chinese and others retaliatory measures hit core Trump areas yet another quick Trump upturn would be likely. The more so as this is mid term election year.

[edjge2] 05/7/2018 14:11

Ain't arf agreeing.metals to go once dollar drops and likely quite sharp. Chinese taken LME and want yuan denominated trading to cut the traditional dollar. Russians recently dumped loads of USD debt and bought gold. Something is up.
Gary's free blog is USA based but normally spot on for gold, USD and yank markets. generally LSE is up a bit when US markets recover some. Updates after US close.

[arf dysg] 05/7/2018 12:17

edjge2: "and also sense big demise of dollar"

... and quite possibly actively working to encourage the big demise of the dollar.

[mount teide] 05/7/2018 08:48

World economy slowing? Someone forgot to tell the Baltic Dry Index!

The Baltic Dry Index has moved in a completely different direction to the industrial metals markets since the 'trade war' rhetoric ramped up at beginning of June. Unlike the metals markets, as a result of its size and scope the BDI is a market that is almost impossible to manipulate in any meaningful way and is therefore closest to a bellwether for the global economy.

The BDI is a measure of the cost of transporting commodities and finished goods - 95% of which at some point see the bottom of a ship's cargo holds.

The BDI has risen 50% since the beginning of June from 1,042 to 1,567 - up 440% from the 2016 lows. This move is completely opposite to what would have been expected were the reports of the risks of a trade war and slowing global economy as significant as is being made out in some quarters.

I believe Chinese interests - they have repeatedly attempted to control the pricing of the Copper and Zinc markets over the past year by 'managing'(manipulating) Chinese warehouse inventory - are using the present situation to push down the price of many of the key commodities they import, that are vital to their economy. Following the sharp rise in the oil price over the last year, the Chinese as the world's largest oil importers are now attempting something similar with the oil market by setting up a buyer's Nation cartel with which to fight Opec.

As with the underhand warehouse inventory manipulation of the last 18 months - this latest attempt to control the commodity markets is likely to have only very short term success at best before market fundamentals resume their control - as currently being signalled by the Baltic Dry Index.

Never underestimate the Chinese - they paid top dollar to purchase the London metals market - one of Britain's last great independent financial markets - largely according to the views of many of its traders to gain more control over industrial metal pricing. A friend who has traded the LME for more then two decades said the Chinese owners last month quietly announced a plan to introduce yuan-denominated metal products on the exchange - another move he believes, crafted to enable the Chinese Government to have more control over metal pricing.

The Chinese LME owners say of the plan:
“At present, investors are trading our products in US dollars. We would definitely like to explore the possibility of launching products denominated in offshore renminbi. We believe with the increasing number of Chinese trading in our market, there would be more Chinese companies wishing to join the LME,”

[edjge2] 05/7/2018 08:23

Just wonder if KAZ and CAML are reaching their bottoms, must be close on surely!

[mount teide] 04/7/2018 22:12

kenmitch - point well made - Kaz was a poor example to use of a higher cost operator - while they are highly leveraged, with all-in costs across the mine portfolio dropping to $1.43 since the new mines went into production; they are far from a higher cost operator.

[kenmitch] 04/7/2018 21:06

Mount Teide. Always enjoy your posts, but bemused by your “high cost operators like Kaz Minerals,” comment. KAZ is a very low cost producer, albeit with high debt with the debt largely because of building their now producing 2 new very low cost copper mines. I hold both KAZ and CAML and otherwise agree with everything in your latest post.

[mount teide] 04/7/2018 17:01

China, the World's largest industrial metals consumer is not shy about taking advantage of real or imagined market uncertainty to carry out shorting practices to push down metal pricing.

Prudent low cost operators like CAML which set a 2018 budget on an average $2.81 copper price - has seen copper average $3.12 in H1/2018. Suggesting in the highly unlikely event that copper averaged $2.50 in H2/2018, that CAML's copper revenue would still come in on budget for the year.

Highly leveraged/high cost operators like Kaz Minerals valuation tends to be much more sensitive to large short term movements up/down in copper pricing. That CAML's share price appears to have been targeted by the market in a broadly similar way to the highly leveraged players is surprising. I view it as an anomaly and continue to add to my position - largely on the basis that i'm more interested in where the copper price is likely to be in 3 years time than 3 months.

Interestingly, most commodity cycles often run diametrically opposite to the peaks and troughs of the global economy.

The previous global equity market peak in late 1999 saw the FTSE hit circa 7,000 while copper was at a 15 year low of $0.78.

The FTSE then tanked eventually bottoming in H1/2003 nearly 50% down, and by mid 2006 was still some 20% down. The Copper price during this entire period never dropped at all and by mid 2006 had risen by 375% to $3.70(some 493% better than a comparable investment in a FTSE tracker during that period)

From 2010 to Q1/2016 copper dropped 58% while the FTSE went largely sideways to finish at exactly the same level as 6 years before. Since then the FTSE is up 35%, while Copper is up 55%.(Oil price was in a similar downward trend from 2008 to the identical bottom in Q1/2016).

With the copper market forecast to go into a period of material deficit for much of the next 5 years(oil is already flirting with a deficit situation), and still 50% below its previous 2010 high(oil is still 88% below its 2008 high), and the FTSE close to an all time high valuation - the likely trend in comparative valuations of the FTSE and Industrial Metals/Oil over the medium term looks fairly predictable if the fundamentals and history is a reliable guide - particularly with the Saudi's, the Oil Industry's only swing trader, planning to carry out the world's largest IPO in 2019.


AIMHO/DYOR

[mount teide] 04/7/2018 00:02

Global Copper Ore Grades

Recent research by Mining Intelligence shows that early stage copper projects have grades ONE-THIRD below operating mines and that average head grades have fallen 46% since 2000 from 0.98% to 0.53%.

Next generation copper mines will not only have less copper but sharply declining grades. Copper projects currently under development have an average grade of just 0.39%.

A recent report by the Chilean Copper Mining Industry stated that grades at their major mines have fallen dramatically since 2010, resulting in a huge increase in operating cost.

This is a global trend that is expected to continue because of declining grades at many of the largest, long-life copper mines and the continued development of lower grade deposits.

Among new large-scale mine developments, the biggest near-term contributor to supply will be First Quantum’s 320ktpa Cobre Panama. Ore grade is just 0.4% copper - for a mine with a US$5.71bn development cost.

The attached Copper Sector Report: Declining Copper Ore Grades - by sector specialists AME Research - is well worth a read. It provides valuable insight into the challenges the industry will face during the next decade - concluding: 'Declining ore grades result in higher unit costs of production as more material is mined and processed to produce the same amount of payable metal. Capital costs also increase as long-life operations make capital investments to increase throughput and sustain copper production as mined ore grade is declining.'

[kenmitch] 03/7/2018 17:49

warranty.

Moving to Main market might make no difference to the share price. Some AIM shares (e.g BOO HOO, ASOS and FEVERTREE) have multibagged.

Unless market knows something we don’t CAML looks a stunning bargain at current bombed out price. Great dividend too.

[petenorrislos] 03/7/2018 16:39

Some large after-hours trades there?

[mount teide] 03/7/2018 11:44

bogdan - £3.60 would be daylight robbery viewed over a 3 year outlook.

Considering a total of circa 60p is likely to be paid out in dividends over the next three years - such an offer should it occur, would be equivalent to valuing the company at £3.00 a share in three years time - when the copper market deficit is expected to be approaching a peak period and growth in the EV and renewable energy sectors is forecast to rapidly accelerate.

The CAML management is very experienced and have considerable shareholdings - i think any approach would have to be well North of £4.50 to get their interest.

On reflection - the management team has done all the spade work during the last sector recession building and developing Kounrad and evaluating over 150 potential acquisitions to identify and purchase the SASA mine, in order to exquisitely position the company as a very low cost operator in the early stages of the recovery phase of the commodity cycle - strongly suspect they would need to be very well compensated to give that away - i would in their shoes!

[bluerunner] 03/7/2018 10:27

I should add that, while not a chartist, similar pullbacks have occurred in the previous two summers. Once resolved, momentum developed into new highs. Check the 3 year chart for what now appears to be a great opportunity to add/buy CAML.

[bluerunner] 03/7/2018 10:07

The share price drop here is in line with the rest of the mining sector. Metal tariffs / trade wars etc.It is summer. To quote The Naked Trader, May-July is time for a holiday. Many stocks are off their recent highs.Without additional knowledge, nothing has changed and it is all pure speculation.If a bid does come, there is nothing we can do about it. It is also better to be in at that point than out - particularly if the board reject the bid.That could really propel the price.AIMHO.

[warranty] 03/7/2018 09:53

Anybody know what happened to the main market listing? As long as this stays on Aim, it will in my opinion remain undervalued and under purchased by the institutions and fund managers.

[zebbo] 03/7/2018 09:50

If a bid does come in I would call it Opportunistic with the current share price Board would not entertain at £3.60 IMHO. Having said that I don't know what an acceptable price would be