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HCGhost

12,820 Posts.

6

12/09/16

20:22

Post #: 19106157
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Originally posted by eshmun ↑

HC,

We've thrashed this out before. In terms of SP expectations and "trading the the trade" I wouldn't think there is much more value or use in going over this argument again at least until the company announces the results of more met work. Spent the morning under general anaesthetic so missed the sell-off in the goldies. Frankly this sector is somewhat schizophrenic at the moment. The recent sell-off from the highs has either hit broad consensus value levels for the sector or it hasn't. These wild swings off the back of the broader market make little sense for Aussie miners as their sales revenues so far are basically unaffected. I suspect if the market is willing to punish some of these goldies much further based on market volatility alone it will be a good opportunity to back the truck in on some selected gold stocks for trades with long time horizons.

The sentiment of getting to the line first in Lithium stocks and the debate about which companies are winning the race should be cause for concern for all people investing in this sector. If this sentiment is based on the actual realities of demand and supply going forward it should be a big red flag to everyone. No one should be building and financing mines if the trajectory of the expected price of a commodity sees costs exceeding the commodity prices over the lives of the projects or margins squeezed to the extent of making these mines free kicks for the Chinese or anyone else who is in the market for the product. That's what is really laughable with all these arguments. If the demand expectation is so weak then all middle of the road deposits should just be scrapped now before any more shareholder money is wasted on them. Conversely, if the demand expectation is so large going forward, then there should be room enough for all but the most marginal. You've only got to look at the performance of the WA iron ore juniors and the China boom actually lasted a long while (some where saying it was structural and would last forever, most consultants and treasury officials both state and federal also were wearing rose coloured glasses for about 18 months too long). Reality is that even after close to a decade of increasing and high iron prices there was absolutely nothing left for some of the shareholders. In fact more than a few of these companies absolutely destroyed shareholder value and lots and lots of real capital invested was washed away.

Stop believing you are smart. Stop pretending this is a viable long term industry for all. It is not. It will end up being dominated by a few of the the lowest cost players supported by the market heavy weights of the downstream processing industry. For the minute just play it for what it is, a freak wave that has come along that is building in height as it travels towards the shore. Try and ride it until it peaks but ask any surfer......the backwash ain't worth hanging around for. Let me add, the level of continuous ramping here is hilarious, trying to cajole the weak an undecided to hang on. What's more some of the cajoling is based on the most basic knowledge of geology as we saw just recently when one poster thought the most interesting part of a geological map of Mt Holand were some Proterozoic dykes. Even the most amateur rock kickers that have earn't a stripe or two would know these things criss-cross the Yigarn all over the place and be able to recognise them from a map.

Eshmun

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Don't start on me with this judgemental and assumption laden world-according-to-Eshmun-nonsense you like trot out here and there. I called the start of the lithium bubble and the top of it, in real time, and have wasted eons correcting oodles of misinformation all over the place. I am reasonably confident none of the non near-term players will make it with sub 2.5% Li2O resources. Trade the trade and read this post I wrote a while back, which attempts to outline the situation as simply as possible.

Post #:18349605

As for the odd serial (yet generally clueless) ramping, well you just have to put up with it from certain quarters.

Last edited by HCGhost: 12/09/16

KDR Price at posting: 42.0¢ Sentiment: None Disclosure: Not Held
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