Central Asia Metals Share Discussion Threads

[bishan bedi] 11/9/2018 19:03

The question is, what are the share prices of the miners telling us about the future price of the underlying metals?

[mount teide] 11/9/2018 18:20

Warranty - CAML is a simple highly predictable business - we know what the production and average price of the three metals has been over the first six months of 2018 and so can calculate with reasonable accuracy the likely result, which should be very good.

The price of copper today is around 10% higher than when the share price was at this level last year, and like lead and Zinc has averaged at least 20% higher during the last 12 months.

Hedge funds have largely been indiscriminate with their shorting of industrial metals over the last three months targeting the low cost operators with the same zeal as the high cost operators. The pricing anomaly this has created offers excellent investment prospects for the low cost operators over a 5 year outlook when considering the fundamentals of the copper, zinc and lead markets.

When the FTSE finally turned over and crashed in 2000 after a long bull market, it was still in correction territory some six years later - while Copper appreciated nearly 500% during that same 6 year main market downturn - as a result of a huge reduction in capital investment during the second half of the previous decade - in a long term market which had grown an average of 2-2.5% for much of the last 40 years.

The performance of CAML's low cost operation against it's sector peers during the 8 years post IPO tells its own story about the robustness of CAML's business model in a severe downturn - since 6 of those years were effectively the deepest and longest recession in the sector in living memory, which brought most of the industry heavyweights to their knees and wiped out many of the smaller producers and explorers.

Total Shareholder Returns - CAGR since 2010 CAML IPO - a period during which Copper, Zinc and Lead pricing dropped by 56%, 68% and 60% respectively to decade lows in H1/2016.

+24.9% - CAML

-0.9% - Antofagasta
-1.1% - Oz Minerals
-1.4% - FTSE 350 Mining
-4.6% - Atalaya
-7.0% - Kaz Minerals
-13.7% - Capstone
-21.0% - Weatherly


Source: CAML website presentation

[warranty] 11/9/2018 17:00

I hope the results next week paint a good picture MT but I'm lost to see what there is to be known that isn't already factored in and I fear any slight negativity will have us falling again!! Still, if so I suppose it just allows us to add even further?

[king suarez] 11/9/2018 16:19

Doubled my holdings in recent weeks also, around the 210-215 level. Initial buy was around 280ish - hope we get back there soon enough!

[mount teide] 11/9/2018 16:01

L2 - real battle going on today between the competing algo's.

Both sides have been loading up the book with large positions - the shorting side has had to use a high level of ammunition to move the share price about 3p.

All this has done is trigger the longs/buyers to beef up still further the bid - they have over 55k sitting on or within 1.5p of the bid, while the offer side has circa 18k.

MJ1 - as Warren Buffet famously remarked 'the market timers hall of fame has got no one it it!" It's why 90 odd percent of short term traders lose money over the longer term . Buying value and letting the recovery stage of a new commodity market cycle work its magic has proved the test of time over many previous market cycles.

With the share price back to where i tripled my long term position last summer and the Interims due next week, took another large chunk today. As one of the lowest cost operators in the sector, over a 2-3 year outlook i expect CAML to be one of the best performers in my portfolio. Buying today is likely to generate some 25p+/12% of dividends alone over the next 13 months or so.

[michaeljames1] 11/9/2018 15:17

This does look exceptionally cheap at the moment but unfortunately sentiment can drag a share down much further than it deserves to go. I thought it looked cheap at 240! Very tempted to take a position, albeit a small one.

[coxsmn] 10/9/2018 12:28

Added more today, too cheap.

[mount teide] 09/9/2018 13:20

Anyone labouring under the misapprehension that China's spending on infrastructure development has peaked and in decline should read Arden Partners Copper Report very carefully.

The Chinese Government is planning to move between 150 million and 200 million of their rural population to lower tiered cities by 2025, while in parallel undertaking the biggest infrastructure project the world has ever seen - the New Silk Road Project - which Beijing says will see China ultimately lend as much as $8 trillion for infrastructure in 68 countries. That adds up to as much as 65% of the global population and a third of global GDP, according to the McKinsey.

Following re-unification - German and EU taxpayers funds totalling 2 trillion Euros were spent on infrastructure development in the former East Germany to bring the old communist nation up to a second tier EU standard for its 16 million citizens. There are currently over 100 million mostly dirt poor EU citizens living in other former Eastern European communist states - China is aiming to move nearly twice that amount from rural farming communities into new, fully electrified, second tier Cities by 2025.


Arden Note:

'We believe China is accelerating into a phase of infrastructure development. China has gone through a recent period of shadow banking reform, largely around the highly publicised Public-Private-Partnership projects, which currently stand at a value of US$2.8 trillion.

The projects have not had momentum until recent reforms have given central government greater control at local government levels to enable quicker implementation of suitably ‘vetted’ schemes that the Chinese government deem will help to grow their long-term plans; targeted around moving between 150 million and 200 million of the rural population to lower tiered cities by 2025, and with a wider focus on two key dates ahead:
2021, the 100th anniversary of the communist party, and
2022, President Xi’s 10th year in office.'

[mount teide] 09/9/2018 12:33

Ref: Arden Partners Copper Report - For the sake of accuracy the Bloomberg chart used on page 3 of the Report comparing the LME Copper Price with the FTSE 350 Mining Index over the medium term is incorrect: the X-Axis timescale is wrong.

LME Copper bottomed in Feb/March 2016 not Feb/March 2015 as suggested by the Bloomberg Chart. This is important in the context of where the Copper Industry is at this point of the recovery stage of the new market cycle.

Adding a year to each time period on the X-Axis makes the graph data correct.

[briggs1209] 09/9/2018 09:55

cheers melody

[joan of arc] 08/9/2018 15:38

Good stuff, Melody.

[melody9999] 08/9/2018 09:43

Weekend reading! 119 pages on copper market/ P82 for CAML

[cflather2000] 07/9/2018 13:03

Far longer than I realised. Thanks MT, King Suarez

[king suarez] 07/9/2018 11:18

Kounrad (Copper) is currently out to 2032 and Sasa (Zinc mine) to 2038.

[mount teide] 07/9/2018 11:17

14 years according to the latest Company update.

[cflather2000] 07/9/2018 10:57

Thanks for sharing

[mount teide] 07/9/2018 10:28

A new 118 page Copper market research report from analysts at Arden Partners strongly supports what some of us have been saying for the past few years - that copper is likely to be a standout investment over the next 5-7 years(the recovery stage of a new business cycle for the metal that commenced in H1/2016), following a near 8 year downturn/recession created by an over supply situation following copper appreciating in price over 500% between 2000 and 2006.

The oversupply situation was completely eliminated by 2015 and together with capital investment in the sector dropping by 65% since 2013, has left the copper market facing a forecast deficit of at least 5 million tonne by 2025(some 23% of current global demand) based on a continuation of 2% annual growth(considered conservative by many in light of the rapidly growing demand from the Green Energy and EV sectors).

It is pleasing to note that of the hundreds of producers/explorers in the copper industry to choose from, Arden's three top stock picks from this new coverage of the sector include two of the companies previously mentioned here - ASIA MET (ARS) and Central Asian Metals (CAML).

'Where copper exposure is concerned, not all companies are created equal and this is key in allocation when trying to maximise gains from the copper market. Our top picks from our new coverage are Asiamet, MOD Resources and CAML. We see SOLG as an interesting higher risk yet higher reward option due to its current stage.'

Sector Overview:
'Copper is entering an interesting phase. Supply is stretched from successive underinvestment at the mine level and demand is rising from infrastructure growth in China, new technologies and the ‘green revolution’.

Opportunities exist to ride this cycle and market dynamics have changed, largely from China developing its commodity usage methodology and global economic jockeying. We believe that China is about to go into a major growth and regenerative phase that will be copper and iron ore dependant. Combined with predicted supply shortfalls, we see copper as a standout medium to long-term investment.'

[3noddy] 06/9/2018 23:01

Meanwhile, the UK’s growing range of hybrid, plug-in hybrid and pure electric cars continued to attract buyers, with a record one in 12 people choosing one.1 Demand surged by a substantial 88.7%, with the sector accounting for 8.0% of the market – its highest ever level – as billions of pounds of manufacturer investment help deliver more ultra-low and zero emission models to the market.....

[mrtenpercent] 06/9/2018 20:02

Mount T - many thanks. I had found that page as a Guest but got logged out (I think). I now have an account.

[mount teide] 06/9/2018 17:21

MrT - Euroclear have just released their latest stock on loan data report - it shows the CAML short position dropping from 1.42% to 1.28%(2.3 million shares).

Using the link below, click on Monthly Stock Loan Data and then select August Report in the drop down menu: CAML is on page 4

[3noddy] 06/9/2018 13:40

hxxpS://insideevs.com/tesla-model-3-outsold-bmw-passenger-cars/

Tesla Model 3 sales in August hit an estimated 17,800 units, an all-time high for any plug-in electric car ever. Surely that’s impressive, but what if we look at it in a slightly broader way.

Like, for example, how does that 17,800-unit figure stack up against say BMW passenger car sales. And no, we don’t mean just 3 Series sales, but rather all passenger car sales by BMW in the U.S. for the month of August.....

[zangdook] 06/9/2018 12:54

Mr Tenpercent

as carcosa says, it's probably the broker helping themselves to their clients' assets.

Hargreaves Lansdown have a stupid policy of charging monthly fees for some of their accounts - ISAs for example - but refusing to take payment by direct debit. The result is that if you don't have cash in your account they sell a few shares - and charge you commission - to pay their fees.

It's an idiotic policy IMV. If you only have an ISA it's not possible to top it up once you've hit the limit. If you open a non-ISA account to feed the fees into they threaten you with a "closure fee" if the balance drops below £50. They make a few quid in commission or in interest on the £50s but create major resentment from their clients.

[shieldbug] 06/9/2018 10:02

Bloomberg also have an article on China and EVs. Nothing particularly new here but evidence of a story building.