PM mining shares

[BaldyBob]

I agree HH.

 

Anyone wanting to take advantage of picking up a miner on the downward cycle would be best to stick to one of the big 5 in the FTSE 100, (BHP Billiton probably being the most financially robust). These are big companies, so you should be safe from any unwelcome surprises. Avoid those on the AIM unless you consider it the same as betting on a horse and are willing to accept the loss.

Of course guessing where the bottom is.....good luck with that.

[KDave]

I agree HH.

 

Anyone wanting to take advantage of picking up a miner on the downward cycle would be best to stick to one of the big 5 in the FTSE 100, (BHP Billiton probably being the most financially robust). These are big companies, so you should be safe from any unwelcome surprises. Avoid those on the AIM unless you consider it the same as betting on a horse and are willing to accept the loss.

Of course guessing where the bottom is.....good luck with that.

Timing the bottom is impossible so I don't even try. Better to cost average like MB said. Sticking to the FTSE 100 was my lines of thinking too, although I have also taken a small stake in PAF on AIM for the dividend (11% at the current price). They are an established South African gold miner but still much riskier than the bigger companies. They are also guaranteed to suspend dividends now that I am aboard...

 

By the way - I found the biggest Baltic Dry constituent on the NASDAQ called rather originally 'Dry Ships' (DRYS - ticker). A company based in Greece. Share price was around $112 a share at the peak in 2007/8. Now you can get a share for $0.34 (about 23p a share). The company has recently cancelled dividends and made a $1.43 billion loss in the last quarter. Bargain?

[Pipers]

The way I look at it, 99% of people sit watching the BBC news or ITN news and never question it. This leads to the vast majority believing international trade is fine the UK is recovering really well and doing fine.

Then there are the other 1% who look around and question what they see, these are the men and women who investigate. Financially they may make mistakes as they learn but in the long run they are no ones fool and are better off.

The Government does not like this type of person Tory or Labour, as both suck up to the financial sector. Plus Governments like its citizens to be sheep.

Just look how France has put a stop on buying gold over 1000euros. Our own Government has restrictions on cash they say its because of crime, most crime does not involve cash. I would argue they want you not to use cash because of the banks.

Now mining and commodities having looked at both charts and looked at China's figures it's obvious trade has fallen all over the world. Plus we now have Brazil in trouble another exportgoods

would argue trade is not as good in most retail, just look around people are shopping just not buying as much and benefits cuts for the workers in the UK this will hit hard on retail then onto China etc. Wages in the US are not recovering as first thought.

All of this hits commodities Saudi dropped the price of oil, this looks good at first and it is until you start reading oil companies capex has dropped right down. Then Russia and Iran they will start either competing with the UK Europe USA on quality goods or they will invent a cheap way of getting the oil out of the ground.

My own view is we are in a very tight spot, deflation is here though not yet in the real world (at the shops)

Miners look to be in for a rocky ride but the ones that come through will be very strong as they will pick up mines on the cheap.

[HighlandTiger]

Just look how France has put a stop on buying gold over 1000euros. 

 

France are putting in plans to limit cash transactions on ALL items to 1000 euros not just gold. But it wont make a difference to the French people. Coins / currency (including gold and silver), is banned from being sent in the French postal system, it hasn't stopped the French from sending gold and silver in the post on a daily basis.

 

With regards to Gold in France though, there is a new regulation coming in that the authorities will have to be notified over transfers of more than 10,000 euros, for things including gold and silver by freight within the European union. Not a figure that is going to cause any issues to us guys

 

[motorbikez]

Timing the bottom is impossible so I don't even try. Better to cost average like MB said. Sticking to the FTSE 100 was my lines of thinking too, although I have also taken a small stake in PAF on AIM for the dividend (11% at the current price). They are an established South African gold miner but still much riskier than the bigger companies. They are also guaranteed to suspend dividends now that I am aboard...

 

 

 

I had 150,000 shares in PAF in 2011, sounds a lot of shares LOL but they were only 7p a share I sold out 4 months later at 12p & made a very nice profit of over 7K ,of course if i'd held on 8 or 9 months I'd have made a lot more they hit 17p early 2012 & then went on to 21p LOL.

The reason I bought into them was for the divi & the director of the company at the the time was a real go getter & very tight with his spending & superb at doing deals.He is no longer there now & I haven't followed the company since I sold out but they had some nice assets including platinum production.What concerned me was at the time they were contemplating buying assets in Zimbabwe.Whether that went ahead i don't know but Mugabe is a mental case.

[HawkHybrid]

glencores results today and kaz results tomorrow

should help give people an idea of how base metal

miners are doing.

 

paf is a bit risky but still worth a punt at this price.

mining at these gold prices is still profitable if you

take the cash cost only and not the all in cost. this

obviously means that you assume they are slowly

depleting their mineable stock(as they can't afford

to explore for new areas). doing so will allow them

to survive even if the gold prices stays low or goes

even lower. depending on the actual results due

september, I'd guess a dividend of 0.4p or less would

be reasonable. claims of accessing higher grade ores

made in june should also help the recovery. and being

able to reduce their net debt helps too for additional

wiggle room.

 

HH

[KDave]

I had 150,000 shares in PAF in 2011, sounds a lot of shares LOL but they were only 7p a share I sold out 4 months later at 12p & made a very nice profit of over 7K ,of course if i'd held on 8 or 9 months I'd have made a lot more they hit 17p early 2012 & then went on to 21p LOL.

The reason I bought into them was for the divi & the director of the company at the the time was a real go getter & very tight with his spending & superb at doing deals.He is no longer there now & I haven't followed the company since I sold out but they had some nice assets including platinum production.What concerned me was at the time they were contemplating buying assets in Zimbabwe.Whether that went ahead i don't know but Mugabe is a mental case.

The latest thing the company is doing is trying to buy a coal mine in SA to sell the produce to the local power stations. In other words they are moving into another commodity that has been consistently falling in price along with everything else lol. The up side is that the mine is already profitable and will be instant cash flow once the deal is complete (If it gets done). They have also reduced company debt by a large amount last year which will be wiped out with the new mine purchase, but swapping debt for a colliery sounds like a good trade to me. We will see how it 'pans' out 

 

Sorry couldn't help myself. 

[motorbikez]

The latest thing the company is doing is trying to buy a coal mine in SA to sell the produce to the local power stations. In other words they are moving into another commodity that has been consistently falling in price along with everything else lol. The up side is that the mine is already profitable and will be instant cash flow once the deal is complete (If it gets done). They have also reduced company debt by a large amount last year which will be wiped out with the new mine purchase, but swapping debt for a colliery sounds like a good trade to me. We will see how it 'pans' out 

 

Sorry couldn't help myself. 

 

It's your money mate I hope it goes well for you.

[motorbikez]

@HawkHybrid Do you actually own any mining shares HH

[KDave]

Glencore, BLT and RIO have all been smashed today. Dividends are looking very attractive now - the question is will they survive long enough to pay one out. How much further can commodities fall?

 

FTSE 100 is down again today as well mostly because of the miners.

[motorbikez]

LOL RIO & BLT have been there many times before & will survive but as I mentioned in another post they will if necessary slash dividends to conserve cash.

[HawkHybrid]

@HawkHybrid Do you actually own any mining shares HH

 

 

yep, pan african resources 

and aureus mining. I put my money where

my mouth is if you're wondering    

(I make full use of my small shareholder advantage

to get in and out of shares quickly should the situation

require it)

 

mining shares are just like any other shares, choosing

the right company is followed by patiently holding in cash

for an opportune moment to take a position.

 

HH

[KDave]

Well whatever happens I am already a little bit in all of them 

 

Needed some mining shares to balance out my high risk oil shares lol. Now I just have to hope we still need iron, copper, aluminium and oil in 10 years time or I will have lost a fair bit of money.

 

I am used to loosing money on paper though, my gold and silver taught me well! 

[motorbikez]

Well whatever happens I am already a little bit in all of them 

 

Needed some mining shares to balance out my high risk oil shares lol. Now I just have to hope we still need iron, copper, aluminium and oil in 10 years time or I will have lost a fair bit of money.

 

I am used to loosing money on paper though, my gold and silver taught me well! 

 

That's the way to look at it you've lost nothing until you sell.The thing is with mining shares, base metals in particular they are very cyclical and are easy to make money on when the cycle is in the upward trend not so easy when in a downward trend.

I'm underwater with my current holding in FRES & RRS & I am not concerned in the slightest.

[KDave]

http://uk.businessinsider.com/crude-oil-price-august-19-2015-8?r=US&IR=T

 

This should helps miners (oil is one of the largest production costs). Alternatively it could spook the market and combined with everything else going on recently, cause a crash.

 

Almost a 3% drop in oil price is an incredible amount for one day.

 

Every time I think it cant get any worse for commodities - it does 

[HawkHybrid]

for those with shares that plummeted during the

last weeks drop. people are saying to reduce

your exposure this week while the fed holds the

shares back up. china is still keeping many of

it's shares suspended which does not read well

for how it's economy is doing.

 

my view is that shares work on winning/losing

streaks. companies don't take turns to be market

leaders. there's a reason why certain companies

are successful and others not.

 

HH

[HawkHybrid]

That's the way to look at it you've lost nothing until you sell.The thing is with mining shares, base metals in particular they are very cyclical and are easy to make money on when the cycle is in the upward trend not so easy when in a downward trend.

I'm underwater with my current holding in FRES & RRS & I am not concerned in the slightest.

 

randgold is a decent hold at these prices. quick view

on their data gives a trailing pe of ~21 and no debt.

it would be on my buy list if I was into big companies.

notice how it managed to get through last week 

relatively unscathed.

 

HH

[KDave]

Miners have recovered some losses today but the outlook is not looking good for industrial commodities despite cheaper oil IMO. The market disagrees today though!

 

There also appears to be a disconnect between the western and eastern stock exchanges, although the Chinese have now taken measures to support their market. Hard to know what the effect will be, as if a stock drops 10% in day over there, trading is suspended. There may be some pent up selling pressure still to come as a result. 

[HawkHybrid]

after all day hundreds of points up, dow has finished

the day (-200 points) in the red. shows the sentiment

really, trade in it but don't hold.

 

the september fed rate rise decision is coming up.

it doesn't look great for a sustained rally.

 

HH

[shemyaza]

When the price of Metal is dictated by the physical pricing mechanism, not the paper pricing mechanism, Miners profits will rise steadily. Australia passed a law allowing this potential to be hidden from public view last week.