Fundamentals of QBL, page-18

Good luck guys - glad its your money and not mine.

An additional 96 million shares suddenly issued off the back of an announcement proclaiming a significant discovery from 26 holes with very little detail about the assay results or location in preference to providing vague information about confident upgrades to exploration targets and future revenue which IMO is pushing the boundaries. I hope the ASX are prompt in querying these disclosure standards and makes QBL re-issue the announcement according to the 2012 JORC Code so we can all make an informed assessment of whether they actually have "potential for a massive increase in resource" and near term DSO export revenue.

I was a buyer under 1c but unloaded well before the pump too bad . My friend also picked up a swag under a cent he sold some @6c the rest is 600% profit for now. What i am concerned about for him is nothing has changed fundamentally since we bought at the lows and where the sp now sits. Sorry i just can't see where 600% rise has come from. It all looks like hot air.
Hi Wilto,

You need to put a date to your under 1c purchase if an argument is to be provided for the sudden rise. However, I will just throw out a few points that could all be contributing factors to the meteoric rise. I too am a holder and not saying that 600% is warranted, but if you were looking for reasons, then here may be a few.

1. As of last week, nearly at 12 month highs, and now at 9 month highs. Commodity prices often drive exploration company share prices higher.
2. The Indonesian increase in tax from 30% to 50% and subsequent ban on nickel and bauxite exports will contribute to likely further price rises. Nickel prices are now at their highest in 2.5 years and that is with rising stocks. Aluminium, whilst increasing in price, is lagging but on dwindling stockpiles. Further near term rises in Aluminium may happen sooner rather than later as new data each week tends to show a genuine imbalance in supply / demand is occurring.
3. We all know Joe Gutnick, well, his sister is also no mug when it comes to pulling investors and generating wealth. Management with a solid reputation for success and profit generation can often times more easily attract larger investors than those companies with a lesser known management. I am not saying this is spin doctoring, I am just saying it is the old adage of "who you know, not what you know". Mix this with some early promising drill results and you are starting to see the right ingredients for the perfect storm.
4. If we compare QBL with say BAU, then advantages we may seem to have include:

- BAU have had recent management changes - always leads to near term unsteadiness QBL has not.
- BAU seem to mention DSO as a sideline matter, QBL mention it as a frontline matter. If QBL really can produce a standard minimum of ore suitable for DSO, then they will be along way in front of their peers. Low cost operations are always favourable especially considering massively fluctuating commodity prices over the past 5 years.
PS: I also have a small holding in BAU so not trying to show any bias here.

1. DSO – I spoke of this earlier, but low cost, predicted reasonable profits and near term production are really no brainers when you are investing. It is up to you whether or not you believe the story. I have found that 90% of what management spin doesn’t come true in companies, 10% does. It is just a matter of whether you are in that 10%. With Australia losing a smelter last year, and another soon to go (almost gone) and with China increasing smelter construction still rapidly, now is a great time to do a DSO deal. In fact, add in the Indonesia Ban on bauxite and I don’t think there has been a better time to try and muster up such a deal in recent memory. The timing seems perfect for the approach they are putting forward – whether they can make it happen is a different story.
2. “The Tenements” and “The Numbers”. QBL have a reasonably decent landholding. They have a lot of historic data, but very little recent data. I see one of the main reasons in the recent rise in the price of the share as due to several factors:

- People are looking for decent commodity investments. To be honest, they have been few are far between in the past few years, however, people are always looking for that aspect of their portfolio (I know I always look).
- I see QBL as a reasonable risk / reward ratio. If you were to be presented with a possibility of making $100 by investing $10 and you had a 1 in 10 chance of that happening, then you would likely decline. However, if you were told you had a 33% chance of making $100 from $10, you would do it every time. You know you could lose the $10, but you also knew you had a 1 in 3 chance of making $90 profit. I think QBL represents these type of odds at the moment. Many factors point to alumina being a decent commodity to be in over the next few years, they have only few drill holes which have yielded reasonable results and they want to get to selling what they may have found quickly. If you are looking for a dabble in commodities, QBL has a lot of positives to take that risk / reward punt – IMO. A lot of others do not offer this - atm.

1. I am a long term investor and getting in at / near the bottom floor is how you really make some massive profits over time. You will always make some diabolical decisions along the way and I hope (everyone) will make some great decisions. Investing in sub $50M market cap companies with lots of potential blue sky ahead can be a rewarding way to generate wealth. I think QBL shows more blue sky than black clouds at the moment.
2. This has been mentioned ad infinitum but I will say it again, you most times generate massive wealth by being in companies BEFORE they have concrete evidence. This is again why it is called risk / reward. People who have seen meteoric rises in companies over the past 5, 10, 15 years, even as recently as SIR now see that you need to get in early to get the most benefit. People who have seen these rises will appreciate QBL as another opportunity to do so, hence, more buying and less selling occurs which pumps the share price. I would personally, and for all holders, like to see QBL one of those stories for the grandkids one day. You can’t tell, I can’t tell, only time will tell.

End of the day, you asked for some potential reasons for the price rise and I have provided some. Whether or not you agree with these, that is your call, but they are all possible reasons for the rise we have seen. If I have not provided the right reason, then there is one out there and we are both missing it because the price rise has occurred. Our job moving forward is to analyse the data and see why it occurred – there is always a reason – and see if we can make the right decision next time.

I plan to hold QBL until empirical data (or possibly otherwise) shows me that I should consider selling. This may be months / years / decades – who knows.



PPS: I have not proof read this post - use your imagination in the case of and error/s.