Thats like saying every cube has six sides and eight corners. Your aphorisms are as worthless to CFE's analysis as looking at the charts or the billions of tonnes of hard, gnarly, useless rock sitting under a hill in the Pilbara.
What drives the share price day to day for CFE is Tony Sage's shysteristic wheeling and dealing and his ego. Couple this with a bunch of quick buck sidearm-weilding day tarders and Russian iron ore barons playing spoliers and pot-pissers, and the actual asset goes out the window except as a rough reference point (though see below) as to the value speculators ascribe to a bid. Then, the timing and success or otherwise of the bid determines the technical stops. Not so much the prediction of them - but the creation of a spurt to $1 or the collapse to 40c when the bid is withdrawn just after the MCC deal is called off.
Its really not a technical or fundamental play.
And, as far as it goes, the price of the asset is difficult to assess because no one has sold a couple of billion tonnes of low-moderate grade fine0-grinding magnetite located in the Pilbara before. Russians and Chinese are the only people who would buy it. The Russians because they (like Sage) seem to like ego-affirming resources and amounts of money to flash around. Google up some of the Prokhorov and Potanin nonsense and see what I mean. Russian billionaires are crazy and the valuations assigned to Russian mines in Russia far outweighs sensible if not shockingly low valuations assigned in Australia. So maybe Evraz realises its bid i a bit on the high side sooner rather than later, and walks. Down CFE goes. Can you see this coming technically? No. Fundamentally? No, the iron is still going to be there.
Ditto for the Chinese. These companies are mking deals because the Chinese National Bank is not leaving letters or lines or credit open to steel and metal processors which cannot prove they have access to supply. Ergo, in order to keep their license to operate, the mills and smelters will do deals (as they have done) often for ridiculous sums of money, on projects which responsible and rational people would shy away from. Like MCC and the one before have done on CFE.
Again, they could be playing the game as much for their license to operate (and damn the $400M) as anything else.
Personally, I wouldn't pay $400M cash for any deposit of magnetite. Fund a BFS and study, co-invest in equity in the company and the project to the tune of $400M, sure. But the odds of buying a porky pie rise exponentially when you buy lumps of rock outright. MCC is braver or more stupid than I can fathom, and hence, whether they get gun shy or not is more powerful than the fundamentals here.
CFE Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
(20min delay)