(FML) Frontier Mining

monday afternoon 3.46p

3.62 -0.08 (-2.16%) with no BFS and no production....

Probably best to wait until FML are actually producing before this chat. I wouldn't go mentioning production figures as I'd be surprised if they produce more than 4000t this year and their original targets were 3000t last year for starters which didn't materialise.

http://www.bloomberg.com/news/2012-02-08/asian-stocks-rise-on-toyota-profit-estimate-greek-debt-meeting-oil-gains.html

"Copper stockpiles fell to the lowest since September 2009, the London Metal Exchange said today"

Haha! Well the funny thing is BADDOG is that the dog ate it along with all of todays potential buyers
YES come on FML throw us a bone.

Where is the BFS ?

...it will also fully cover production costs. So anything on top of that is pure profit.

There is nothing to stop FML forward selling 30% of the next 2 years prodction to Red Kite at $9000pt.

Based on a forecast of 15KT production over the next 2 years that would deliver $40M in revenue which could at the very least come close to paying off or existing debt.

... but in the context of an existing off-take agreement?

Is it really such a good idea to hedge?
----
Yes. It provides security for investors especially II. Let's not forget what happened with copper miners in 2007. Currently WTI hedge is over $9000 per ton for 30% with similar deals over at DME. However if FML's low cost of production can be proved (I don't thinks so myself) then perhaps this will not matter so much.

Released today:

"Of the commodities, copper and iron ore are expected to remain supported by their compelling supply-demand fundamentals while the structural shift in Chinese demand for metallurgical coal remains well entrenched. Geopolitical factors are once again likely to influence crude oil pricing. In contrast, the outlook for the aluminium, nickel and manganese alloy industries remains challenging and has led to significant margin compression for most producers, almost irrespective of their position on the various global cost curves."

Note the comparison with weaker commodities in their view.

For an excellent Metallurgical (Coking) coal play, check out BHR.

Is it really such a good idea to hedge? If I remember correctly they have an off take agreement based on LME spot price. This being so, they don't have the right to seek hedging deals elsewhere.

Positive news will be coming a-plenty in the next few weeks. The problem to me is whether the share price will reflect this news when there is some skullduggery going on, with some pretty obvious attempts to keep the price down through clever trading and manipulation of PI sentiment.

Copper continues to rise this morning and is approaching $9000/te. It would be very reassuring to get an RNS stating that FML have hedged a large percentage of forecast output for 2012. I believe that this would a) convince the market that the company is confident that it will produce the planned copper production level and b) lock in profits for year 1 of production in what is still a potentially rocky road ahead for the Eurozone. Come on Erlan let's have some positive news.

15mm and 22mm copper piping me hopes!!!

15mm and 22mm copper piping me hopes!!!

http://www.bloomberg.com/news/2012-02-08/china-s-stocks-jump-most-in-3-weeks-as-slowing-inflation-may-spur-easing.html

"Jiangxi Copper Co., the largest producer of the metal, soared 10 percent after an economist said China may “move shortly” to help Europe resolve its debt crisis. China Vanke Co., the biggest developer, rose 2.9 percent after the central bank said officials will increase support for building of affordable housing."

souvenir coins? 2P or not 2P?

FML to actually produce some copper?.......maybe.....sometime....maybe....

NEW THREAD? I wonder what copper price will be prevailing at the time of FML's first batch? A strip of that could be made into souvenir coins, available to investors upon application.

777 - What, not another lap of the track? Nowhere have I ever stated that FML shareholders are doomed,
but still there exists this twisted logic that I'm promoting an anti-FML agenda. For personal reasons expressed, I chose to lock in profit after the recent RNS release and to remain out due to various factors I've also explained ad nauseam. I am risk-adverse in this market and prefer waiting for the right opportunity to re-enter.

Almost everyone else here has a different outlook from me, which is normal as a forum is just another name for fan club. This doesn't bother me, so why should you allow it to disturb you? Unfortunately, disturb it does, with people not shy in expressing their wish to be rid of anyone who might cast doubt on the astuteness of their investment decisions.

I don't derive any special pleasure from being rude, but I've long tired of grown up adults who act like children who've had their toys taken from them. And then there are these many conspiracy theories!

Rest assured, should FML suddenly perform or a green light flashes, my pedal will be to the metal.

Vizz, I just realized after taking a second glance at your last post that you are in fact completely full of yourself. You also wish other people to take up your idea (baton) that we are all doomed here. Let us see who is left standing in the cold. I wonder that you are not working in a body of people and have a vested interest in pushing the price down here. I'll give you clever but that is all. I feel that your last words were not civil. Goodbye. I shall remain logged in in future. That way I might keep my guilt from being tarnished.

Vizz it's not me trying to be rude. Smart you are certainly. It's precisely not to choke up the board. Yes good luck all round. S

Good decision 777, for both of us and probably most of the forum. I won't have to keep repeating the same answers to similar questions and you avoid hearing answers that don't gilt the lily.

Let's hope for everyone's sake that more people take up the same baton so that time can be used wisely.

FML is a yawn, Vizz is right, it was 10p on spec now below 4p with no production around the orner...yawn....

Sorry chap. As smart as you are it is a bit boring listening to the same again and again ref world economy and not FML specific. IGNORE

Quarry - We all know the axiom, "Those who ignore the lessons of history are doomed to repeat them",
can sometimes be excusably overlooked, but there's no exoneration if history is only a month ago.

When forming opinion about what may happen in the future, it's best to start from where we are and extrapolate based on existing evidence, not what is hopefully to our advantage. What we know for fact (from the article discussed) is that cargo rates and international volume reduced for 27 consecutive working days (down 60%), which indicates recessionary conditions.

An excuse was given that the increased shipping fleet accounted for the reduced BDI rate, but how many supercarriers are built in 27 days? The answer is none, but when they are completed their impact is spread gradually over an extended time period and don't show up as a major collapse on a graph.

None of the above is a sign post for commodity prices sinking out of sight and that those connected with the business will be collecting their UB40 form soon, but it is clear warning that global commerce is on a slide and at best will be volatile. Until there is evidence to the contrary,
the sensible approach to the market is caution - Stercus accidit

Indeliblemarker - Excellent 12:19 post, you deserve to sit at front of the class! Quite correct on the hate response from the fan club forum if any post doesn't end with Buy! I have scars on top of scars proving it, but then again I'm a masochist.

777, I know - as I linked to - the BDI isn't actually correlating with Copper movement and that shows that while global economics are an important factor - here, it is far more prudent for us to focus on the fundamentals of FML than to try and predict how the world economies are going to react to the myriad of macro events which could potentially take place in the next few years.

Indelible I also agree that Greece WILL default on it's loans. I suspect Merkel is probably well aware of this too along with many world leaders. The British and I am absolutely certain the Germans are laying down contingency plans for an untidy break up of the Euro by offloading bad debt or effectively writing it down. There are also massive legal planning issues and I firmly believe that these are ongoing. Yes there is Portugal, possibly Spain and to a lesser extent Italy and Ireland (I think she will not default) and even France in the poo. There are so many doomsday scenarios but there are real growth stories to be had in China and the USA and re-investment in transportation infrastructure of the latter 2 and even the UK will stimulate growth and limit the impact of Europe contagion. Let us not forget that a lot of the craaap has been factored in already. People expect the worst and whereas our poor Greek cousins will suffer for years to come we saw a monster economy like Japan suffer post boom years and yet not derail world growth. Yes you may retort that a failing Europe will affect the other economies esp China and Japan but it isn't armagedon IMO. People don't just stop using copper. People still need houses and cars. They always will.

I was using the phrase in a somewhat metaphoric manner but what I meant was, when this happens, the Share Price will shoot up substantially to multiples of the current SP, not just rise by 50pc or so. All we need is for the Management to deliver rising profits and the SP rise will follow. That is within their control to do.

Whitesnow. Would you mind explaining your definition of geometric change in the sp on a re-rating please? You may be right of course but my guess would be that the company will release some more significant RNSs on the build up to maiden production (the previous ones have been a bit lame admittedly). S

Vizz has extremely valid points that the macro economic situation is poor and that many predictions for the coming year are bearish. To try and say that Vizz and Zebz are the same is ludicrous, because even if it's true, Vizz is raising points which people should genuinely take into consideration. Zebs is just irritating, but on the blue days, I always miss him.

The problem Vizz, is that the macro economic situation, while relevant, is not helpful here for investors to choose between FML and the various other companies and sectors out there. All that is useful here is speculation on the company, it's past, present and future - whether good or bad - and the reasons and likelihood of each. You actually seem to be fairly bullish regarding the long term fundamentals of FML, while bearing regarding investment as a generalisation.

The people using these boards are looking for a company which they can put their money and trust in to make returns - and hopefully enjoy the ride on the way - pitching a negative view of investing generally will not deter people from investing - it will only deter people away from you, as we see happening.

People who are picking out selective aspects of Vizz's article stating that the BDI is down 70% in 3 months because of an excess of ships being built are blinkered. As it clearly states in the article, the drop is too much for this alone to be the cause. On a macro economic scale, the position of the BDI is a useful tool for prediction of general markets in the short/medium term future.

But, in a macro economic meltdown, people turn to gold - we all know that, so you cannot use something as wide as a BDI to make predictions like this because there are always anomalies. In fact, if you compare the BDI to Copper, http://investmenttools.com/futures/bdi_baltic_dry_index.htm#copper you will see that there is little or no current correlation between the two.

Keep this board focused on FML, because the fundamentals are clear and the goals are defined. Let's hope they are met. The weather is fluctuating, but we know roughly when production will be able to start. These things are well defined to be able to discuss and speculate on.

The global economy on the other hand, is impossible to second guess. If it was possible, then we wouldn't be in the financial depression we are currently in (if you dare to call it a depression). If it could be accurately predicted, then it could be controlled - but it's just too fluid and complicated for that, because however much the film "Limitless" idea of an equation for the markets is lovely - it's just not going to happen. I agree that Greece will almost certainly default - it's just a matter of time. I am also sure that there will be a knock on effect, but nobody knows how far reaching that will be and many speculate that actually, it would be a driving factor to strengthen the Euro with France and Germany pushing forward and not being held back any longer. But, my point is... Nobody really knows for sure.

Build a time machine, go and take a gander - then we'll talk.

Norbie Hi I saw you are also a SKR investor, are you going to tomorrow's meeting in London?

re the FML share price - I see no reason for a re-rating before the copper production is finally delivered and the company shows it can make (and sustain) a profit and meet its' targets. When it does the SP re-rating should be geometric, not linear.

The article shows the figures of what has "happened" and the IMF & broker named by Quarry are making a "forecast" of future cargo activity

....................

I think you will find forecasts form a fundamental reason why people invest, what happened is old news, what you expect happen will form the basis of your decision.

Granny! where did I put those eggs!

Quarry, Tricky & Jett

The three of you do not appear to have read the article at bottom on which discussion is based or if you all have, your response indicates you have misunderstood the message.

There is no contradiction, nor anyone right and other parties wrong, it is only the subject viewed from a different perspective. I am only a reader of the article like you, not presenting anything that originates from me - ie I'm only a messenger.

The article shows the figures of what has "happened" and the IMF & broker named by Quarry are making a "forecast" of future cargo activity and in doing so are 'talking their own book' in how they would like things to pan out from their business standpoint. The article is about facts, while other comment is hopeful expectation.

The matter of ships added to the fleet and its effect upon charter rates, etc, is all catered and allowed for in the article and the bottom line fact is that there has been a sharp decline in the volume of bulk and finished goods moved internationally. Again, this only shows what has happened and does not predict the future, which is an open space to be filled.

7dwarfs - My presence here is entirely due to my being an active trader in FML shares for a couple years and my mistakes were in mentioning I just sold and I feared of the possibility of a global market meltdown. I've been dodging arrows and spears ever since. I'm not interested in so-called bragging rights, they have no resale value.

Finance wizard - Thanks, it's a hard road being up against biased opposing opinion

http://www.moneyweek.com/news-and-charts/economics/global/global-economy-shipping-baltic-dry-index-20500?utm_source=newsletter&utm_medium=email&utm_campaign=Money%2BMorning

thanks TDT,that saved me the bother of having to spell out for vizz that the surfeit of vessells is the problem.

"The combined BDI/Harpex chart/figures show that both bulk product and finished goods fell off a cliff ......it means sharp reduction in commerce."

Does it?

DBI and Harpex are measures of charter rates not commodity prices, finished goods prices or volumes. To base anything on these metrics alone is very foolish.

I don't suppose the collapse in charter rates has anything to do with the large number of new vessels coming into the market? Charter rates for vessels are remarkably sensitive to minor swings in volume and vessel availability.

“The shipping industry has found itself having to weather a global financial crisis at the same time as the supply of ships exceeds, in some cases greatly, the demand for ships. This has led to a huge decline in freight rates for just about every type of ship.”

http://www.financierworldwide.com/article.php?id=8988

The collapse in the BDI and Harpex indices are as likely to be the result of the over supply of vessels than a contraction in commodity prices or finished goods or volumes being shipped. If you want a clearer indication of where commodity prices are going you’d be better of checking the CRB Raw Materials Price Index.

I think you're right BBP, this character is best ignored.

TDT

spellcheck - don't you hate it? tired OF reading, JUST that I...

Sorry - I really REALLY hate to do this, but based on the boll*&ks I've got tired or reading...

Goodby Vizz. Good luck with your agenda, but you are ignored. I am not saying you are wrong, use that I really, REALLY don't like your attitude.

Vizz, if there is going to be a market melt down like you say you would be better off with your sandwich board posting on the Ftse100 bb. Why this one, surely you would get a larger audience and the bigger bragging rights if it does happen. Only a thought, just seems strange to me that you picked this one of all the stocks out there.

Quarry - The combined BDI/Harpex chart/figures show that both bulk product and finished goods fell off a cliff (to mix metaphors) during the past month, so whether you're analysing the horse or the cart or both in combination (more mixed metaphors) it means sharp reduction in commerce.
......................................
Sounds like a contradiction to the following text:

The decline in rates is masking gains in world trade, with London-based Clarkson Plc, the world’s biggest shipbroker, predicting record cargoes of everything from iron ore to oil. The International Monetary Fund expects a third annual gain in world trade as economies recover from the worst global recession since World War II. About 90 percent of trade moves by sea, according to the Round Table of Shipping Associations.

I'm sure you're right and they are wrong