here's an interesting idea a friend of mine came across the other day:
TGB
they are a miner of copper, and with the recent increase in copper prices, they have restarted their mine and are now producing at full steam, with the possibility of further increases in the coming year, as market conditions warrant
obviously it's a bet on continued strong copper prices, but their target of $1.17 a pound in copper costs for 2006 gives them significant margins with the current price for copper over $2.00 a pound, and even the prices for delivery 15 months out in the range of $1.70 or better
they just released results for fiscal 2005, as such:
biz.yahoo.com
while the balance sheet showed almost no book value at the end of the last fiscal year, they have proven and probable reserves of almost 200M pounds of copper, which is clearly a significant asset, especially at today's prices
most of their earnings for fiscal 2005 were from tax credits, but they only had production for nine months of the year, and they only sold a little over 70% of that production, so there is significant potential to increase their profits, especially considering that their average selling price during fiscal 2005 was $1.48, and prices have been much higher than that for most or all of Q1 F2006, due to a shortage of inventory...this shortage will obviously abate at some point, but the demand seems to be quite constant given the worldwide economic situation
their is the further wildcard here of the prosperity project, a gold mine in which they have a 10% stake, but that seems a bit nebulous at this point, so it probably isn't a reason to consider an investment here...it is however something to keep an eye on at the very least
the conference call conducted earlier today is quite informative, perhaps a good way to spend about an hour of the long weekend <g>
biz.yahoo.com
in any event, i took a position today at $1.21, and plan to add as the technical picture further confirms what i see as a strong fundamental one...perhaps it is of interest to some here
happy new year |
