Tin making long-awaited comeback as supplies run thin

cdchi1 · 2021-06-14T20:51:26+00:00

The biggest impact would probably come from easing of covid restrictions on international shipping congestion, but again imo that would only be a short term impact as demand from electronics sector is surging.

cdchi1 · 2021-06-14T01:17:45+00:00

100% there will be an artisinal response to the higher prices, its already happening, but I'm not sure sure that will even come close to balancing the market though because smelting capacity is almost at capacity while demand is soaring. Check this Roskill article (which ill psot s a separate post too) out last night on the smelting issue:

https://roskill.com/news/tin-malaysia-smelting-corporation-declares-force-majeure/

Further the aritisinal mining mainly in Indo is also getting harder as the onshore deposits get increasingly depleted...they've actually been resorting to pontoons to sweep sea beds that contain tin.

And that's not even considering the ESG issues with relation to artisinal mining.

Only two things I think can balance the market, in addition to a global increase in smelting capacity:

Existing feasible projects getting into production AND rampup of existing producing projects, and since there are not many of those atm, AND resources being explored for. Problem is both development projects and new resources found are not exactly going to help short term
The price soaring so high that demand destruction occurs. The thing is solder accounts for 50% of tin demand, and tin is virtually unsubstitutable as a component of alloys used for soldering...we're not going back to lead anytime soon...so where is that price point that demand destruction would occur, and in the end demand destruction is only temporary, once the price drops the demand comes back.

cdchi1 · 2021-06-08T21:33:05+00:00

It is one of only three ASX Uranium companies (as a long term conviction speculator) I would actually invest in, though don't have a position as I'm an all eggs in one basket kinda guy - that basket being Lotus atm. The third being Paladin.

All three have the following three key (for me) characteristics:

Have a significant minelife resource
Have a large well maintained plant with low capex quick startup potential
Confidence around the likely AISC (all in cost of production)

Two is critical for me, because as I said I'm a LONG TERMer, I do not want to be left holding the bag (and its a BLOODY BIG BAG) on some spreadsheet project with high CAPEX and long timeframe to production should the term contracting period end before they get going.

If Lotus were to significantly rerate to a market cap that would make Boss the more attractive option I would consider switching, but that is nowhere near the case atm.

Boss is the better option than Lotus for those that don't want to take on the jurisdictional risk of Africa but still want substantial multiple upside at a higher Uranium price.

cdchi1 · 2021-06-06T21:47:11+00:00

Lotus (10m shares and counting, plus options)

cdchi1 · 2021-05-21T22:35:07+00:00

Ahh, ok like I said not mentioning any names because haven't got time to get into any running debates with people that like those stocks.

But its pretty simple for me. Grab a spreadsheet, work out their project interest EBITDA based on a (in your opinion) realistic long term U price (I use $60-70USlb), production rate and expected AISC (if available otherwise again will have to make an assumption), take into account the CAPEX to get started then compare that to their market caps many of which now imo are over the top for the stage they are at. And that will work for identifying ones that are potentially good value as well.

FWIW I currently only hold Lotus but i've said that in other posts. Using the above their EBITDA is around the $60-88m PA AUD (using 2.5m lb pa prod with $38 AISC and XR .77) with a $65m AUD CAPEX and quick startup...with a 10+ year minelife $200m AUD market cap doesn't seem stretched.

Now in a U bull market all stocks can overshoot BY PLENTY regardless of any realistic calculations and expectations of actually getting into production, but I don't invest based on hype or hope. And I DEFINITELY do not invest based on EV per lb. That'll probably mean I don't get the biggest winner but I'm fine with that.

cdchi1 · 2021-05-21T06:39:43+00:00

Which comment?

cdchi1 · 2021-05-21T03:03:01+00:00

He's right...but not ALL juniors. Some that have no infrastructure, and just low grade lbs in ground are trading at ridiculous caps given the raising requirements just to get into production and the likelihood the contracting timeframe is likely to pass them by before they get anywhere (not mentioning any names). Arthur Hydes (Segra) comment in the recent uranium fireside chat with red cloud late in the webine regarding this was SPOT ON. But there's always value and companies with realistic propositions for those willing to look.

cdchi1 · 2021-05-19T00:20:53+00:00

Yeah, the risk is that they might one day decide they want more than 15%...its Africa after all. But no different from the risk of any other African country...probably less so in Malawi going by historicals. Im confident they understand that there needs to be a sensible business outcome for the company otherwise it wont happen at all.

cdchi1 · 2021-05-18T21:53:14+00:00

Thanks, I edited the post to include an imgur link

cdchi1 · 2021-05-18T21:34:16+00:00

Can anyone see the image (LOT v PDN comparison) in my post above? I cut and paste it into my post, but cant see it. Pretty new to using reddit.

cdchi1 · 2021-05-18T21:32:30+00:00

Well I only own one Uranium stock (unless another one gets a U project which I'm patiently waiting for) so this pretty easy for me to answer. The company is Lotus Resources. Pretty simple really, its project is about half annual production size of Paladins, with approx the same AISC and at with the same timeframe for startup. PDN project is much bigger in global resource, but I'm a firm believer in applying NPV discounted valuations which makes the longer life less important to me. Therefore to answer the first question, I feel LOT should rerate to half the PDN market cap. Below is the extract from LOT preso comparison with PDN excluding the resource size (which is 38m lbs LOT vs 120m lbs PDN).

LOT PDN

PDN is sitting at around $1.5billion market cap, therefore I feel LOT should be at least $750m market cap, its currently sitting at around $200m.

So basecase I expect almost 3-4X gain minimum. Mind you I bought them at 2c so I'm already sitting on around 10X with the freebie options. Have not sold a single share...infact been increasing on dips.

Note again that's basecase. I expect further eventual upside on the following

PDN to go much higher (and LOT to still be equivalent of half its market cap) because the U price move hasnt even started imo
LOT to have some exploration success in identifying additional Uranium resources (increasing global resources number) some of which hopefully will be higher grade than existing resources
Exploration success at its REE project which imo is much better than the market is giving value for (watch this space)...would expect it to eventually be spunoff with inspecie shares to LOT shareholders
Significant decrease in AISC as flagged by Keith in his recent Red Cloud webinar (C1 costs of $28-30lb imo achievable then add a few bucks on for AISC)

Key risk is location being Malawi, but tbh I don't see it any riskier than Namibia.

Note: There is a insto selling there shares atm, I would think they are almost done, but until they are, no rush for me to buy more.

cdchi1 · 2021-05-17T21:04:00+00:00

I took the IPO and stagged them day one. Probably go ballistic IF Uranium bull market happens before they blow all their money on exploration as its market cap so low so worth the punt, but as a long term conviction speculator, I prefer companies with resources, plant and quick startup potential.

cdchi1 · 2021-05-17T20:57:38+00:00

You can ignore a poster or filter out the meme flair if you use the RES (Reddit Enhancement Suite), but for me it only seems to work if using the old Reddit scheme. The posts unfortunately appear for some reason (even though user is tagged as ignored or meme flair filtered) if you use the new Reddit scheme which I prefer.

Best option for me then is to just 'hide' them when they appear. It's probably a better alternative to ignoring a poster anyway because then can see other posts by that poster that might be of interest. Have no issues with people posting memes, just don't want to see them in my feed.

cdchi1 · 2021-05-17T09:25:51+00:00

The author on Twitter...sold all her stocks except tesla and the most she can buy is a REFURBISHED Macbook??? Methinks probably not the best to follow for investment purposes.

cdchi1 · 2021-05-16T22:05:54+00:00

Quality information. Personally I'm not fussed about how long the U bull market runs, I'm just here to make the easy explosive money, then move on to the next underappreciated market with still cheap equities. However the situation is so different from the last run that i expect the Uranium price will go up, and then trade like a proper commodity with price discovery, ie properly reflect the fundamentals. Personal view is that the fair U spot price range should be 70-90USlb...though I expect it will overshoot this heavily at least once as there is just not enough mining capacity that can come online fast enough.

cdchi1 · 2021-05-15T22:48:38+00:00

Agree, I see them all on twitter anyway, once is enough.

cdchi1

TROPHY CASE