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Underexposed - Canadian Stock Journal


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Underexposed - Canadian Stock Journal

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  #81 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

week ending March 14

well after weeks of mediocrity finally get a good result



Nice to get a shot in the arm like this....I am not that naive that I expect this every week though it would be nice

I will be pretty well standing pat this next week. I am going on a trip to California to see my son/daughter-in-law/one year old grandson. I will check in on things once in a while but won't do much.

Good Trading

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  #82 (permalink)
Prince George BC Canada
 
Experience: Advanced
Platform: IBs TWS
Broker: IB
Trading: Stocks
 
deaddog's Avatar
 
Posts: 789 since May 2013
Thanks: 118 given, 1,914 received


Underexposed View Post

As you can see from my approach I accept the loss and move on....anyways I hope this works for you but this is not my style.

Let me say this is one of my rare fundamental plays.
Mt. Milligan gold mine is still in the start-up stage and will add to the earnings, especially if gold goes higher.

I donít usually double down but since the stock gapped up so much above my buy point I only took a small position. (Fear of missing a move). Actually for this stock that is part of my trading plan. Take a small position if the stock gaps up and add on retracement or add if the stock fills the gap.

The risk is still under 1% of my capital. As a percentage of dollars invested I stand to lose about 12%.

Although Iím rolling the dice the risk is under control.

When you talk you are only repeating what you already know. When you listen you might learn something new
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  #83 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014



deaddog View Post
Let me say this is one of my rare fundamental plays. Mt. Milligan gold mine is still in the start-up stage and will add to the earnings, especially if gold goes higher.

Hmmm....I don't like your fundamental analysis of Thompson Creek Metals if you are basing the share price on solely the Mt. Milligan gold/copper mine.

I will cast my bones on this property and how it fits into the rest of the Thompson Creek Metals mining properties.

I am taking this information from the LATEST financial news and this information is only a month old.

http://www.thompsoncreekmetals.com/i/pdf/nr/2014-02-20_TCM_NR.pdf


Quoting 
The Company also announced financial results for the three months and year ended December 31, 2013, prepared
in accordance with United States generally accepted accounting principles (“US GAAP”). All dollar amounts are
in United States (“US”) dollars unless otherwise indicated.

2013 Highlights:

• Consolidated revenues for 2013 were $434.4 million compared to $401.4 million in 2012. Copper and gold sales contributed $14.3 million of additional revenue in 2013. Molybdenum sales volumes were 36.5million pounds in 2013 compared to 28.7 million pounds in 2012. Our average realized sales price for molybdenum in 2013 was $10.97 per pound compared to $13.48 per pound in 2012.

This bullet point has a ton of information and I understand why you are interested in the Mt. Milligan gold mine as it is basically in your back yard...being near Prince George

look at where this company is making its money...IT IS NOT FROM GOLD/COPPER this represents but a small fraction of its total revenues.

$14.3 million / $434.4 million * 100 = 3.29% of total revenues

This company has 3 producing mines: Thompson Creek Mine (100% Molybdenum play), EndaKo Mine (100% Molybdenum play) and Mt. Milligan Mine ( Copper/Gold play we will determine the ratio of each metal later hopefully as it certainly seems there is more copper than gold in the ore a reserve of 2.1 Billion lbs of copper versus 6.0 million of ounces of gold...pretty high reserves albeit.

Let's look at its quarterly reports (I find annual comparisons misleading)

Stock Market Quotes | Company Financials, Financial Information



this income statement shows a rather erratic Net Income on a quarterly basis and the last quarter is not particularly encouraging .

I looked up the relative income versus the three metals that were mined in 2013.

this comes from page 15 of that report

Copper : $8.7 million
Gold: $5.6 million
Molybdenum : $400.1 million


from this I see that Gold represents only only about 1.3% of their business...it is only operating at 60% capacity right now and not due to reach capacity until 2015.

Conclusions:

the Mt. Milligan Mine appears to be more of a copper mine than a gold mine. Gold certainly represents a significant amount of the revenue for that mine but Thompson Creek Metals still makes most of its revenue from the mining and sale of Molybdenum and that price has been in decline for a long time...in fact if you read that report on pages 2/3 of the report shows that they are mothballing expansion of phase 7 of their Thompson Creek Mine due to low Molybdenum prices...which says to me they expect lower prices for Molybdenum in the future.

To expect that the mining of gold which represents only 1.3% of the mine's revenue currently to compensate for a decline of the Molybdenum revenues is optimistic for sure.

I think you are deluding yourself to think that the gold in the Mt. Milligan Mine is going to turn around the fortunes of TCM in the short term.

Anyways, my reading of the chart for TCM is not the same as yourself...to me it has only had a rest in the past 3 days and more downside is to be expected.

I see nothing fundamentally or technically to suggest otherwise....I hope I am wrong but that is what I see and why I see it.

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  #84 (permalink)
Prince George BC Canada
 
Experience: Advanced
Platform: IBs TWS
Broker: IB
Trading: Stocks
 
deaddog's Avatar
 
Posts: 789 since May 2013
Thanks: 118 given, 1,914 received

Couple things you didn't pick up on.

Mount Milligan just opened for operations. Way over budget but is working out the kinks and hasn't really added to earnings.

Endako Mine just completed a major upgrade, New mill I believe. Again they are having normal strart up problems.

These usually iron themselves out in 6 months to a year.

Thomson Creek Mine has suspended production.

When you talk you are only repeating what you already know. When you listen you might learn something new
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  #85 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014


deaddog View Post
Couple things you didn't pick up on.

Mount Milligan just opened for operations. Way over budget but is working out the kinks and hasn't really added to earnings.

Endako Mine just completed a major upgrade, New mill I believe. Again they are having normal strart up problems.

These usually iron themselves out in 6 months to a year.

Thomson Creek Mine has suspended production.

Yes...all of that is true....the operations at Mount Milligan are only at 60% capacity and not expected to be at full capacity til 2015. The gold makes up only 1/3 of the output of the mine with copper being the main mineral. this company is known as one of the biggest suppliers of Molybdenum in North America if not the world....but it is shutting down aspects of their mining of this metal.

these are not good fundamentals for the present...not in my opinion. The TA reflects this as well. You have a declining price for their major mining commodity, declining production of that commodity...the new mining addition is more of a copper play than a gold play....copper is as common as hen's teeth with large mines elsewhere in mothballs waiting for a rise in that commodity price.

The gold represents less than 5% of its revenue at present and you expect that will turn this company around today??? It won't be into full production until about next year...who knows where the price of gold be at that time...the world problems could be on the mend and the price of gold could fall again.

I can see you standing pat waiting for a reversal in share price direction...but doubling down on such information and TA does not make sense to me....sorry

But I wish you luck...

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  #86 (permalink)
Prince George BC Canada
 
Experience: Advanced
Platform: IBs TWS
Broker: IB
Trading: Stocks
 
deaddog's Avatar
 
Posts: 789 since May 2013
Thanks: 118 given, 1,914 received

You're probably right. Like I said rolling the dice.
The risk is under control so I'm not risking more than I had planned on this position.
Every so often I get lucky.

When you talk you are only repeating what you already know. When you listen you might learn something new
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  #87 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

yeah, I understand and I cross fingers for you. It seems that this company is under a transition...I note they have other gold properties in the works but these are years away from even a commercial evaluation it seems.

If I were doing anything..it would be to add it to my watchlist....but hey, it has a chance to turn around...a small one IMHO be a chance nonetheless .

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  #88 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

this is my last major post for the next 7 days as I am on a trip to the USA starting tomorrow.

As you can see I have settled into a nice suite of stocks for a long term swing. I will show a chart for each and comment on my feelings on each one.



this is doing well as a gold mining company...believe it or not this chart is in consolidation though it is still rising in price. It still looks rather bullish with the Slow Sto above 80...the MACD has a slight neg showing thouh not serious...the BBwidth has fallen almost to a level where breakouts occur (10-15)...With Gold continuing to rise I have no plans to sell this stock.



This is my gold financer stock. the price is above the upper bollie so I expect a mild pullback until it is within Bollie envelope...another stock to leave alone as long as gold is rising. NOTE the beginnings of a bullish 50daysma cross of the 200daysma



This is my only Oil & Gas stock...it is entering a critical period as the Bollies are pretty tight...it looks fine so far for a positive breakout so far .... the slow sto (which usually leads bad news is hovering around 80, the MACD is declining but not severely...the BBwidth is nearing the point where a breakout will occur (4-5)...the price itself has a narrow range, tracking the 20daysma. Also since we purchased this stock before Feb 26, we received our first dividend payment of $35.00 on 500 shares...not much but it adds up eventually the longer you keep it.



this stock is resting...in order to see a bearish decline the Slow Sto, MACD AND BBwidth must all be negative and that is not the case.



I have great hopes for KLS.V as a manufacturer of improvements to oil tanker railway cars...the stock is nicely tracking the upper bollie....no worries so far.

this is my limit as far as embedded charts go.... my only concern left is ADF Group Inc. DRX.TO

DRX.TO - SharpCharts Workbench - StockCharts.com

this is looking bearish....there is a support level at $2.90....so I will set a limit Stop-loss at $2.80 - 2.85 on DRX.TO...this will protect me from a dramatic loss. I still like the company for reasons I stated when I purchased it...but it looks like the times are not right....hopefully the support will hold.

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  #89 (permalink)
Prince George BC Canada
 
Experience: Advanced
Platform: IBs TWS
Broker: IB
Trading: Stocks
 
deaddog's Avatar
 
Posts: 789 since May 2013
Thanks: 118 given, 1,914 received

TC. hit stop. Loss of .065% of capital.

When you talk you are only repeating what you already know. When you listen you might learn something new
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  #90 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014



deaddog View Post
TC. hit stop. Loss of .065% of capital.

Sorry to see the demise of TCM for you. Looking at the chart below I see it has risen briefly back to $2.30 but fell back.

TC - SharpCharts Workbench - StockCharts.com

The jury is out as to whether this is a rest or a bottom currently. Looking at my other charts I lean to this being a rest and a further decline is coming...at best it will migrate sideways to the 20daySMA for a while.

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March 21, 2015


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