tala hamza resource upgrade out, page-4

Hi Docker and Damon

As some of you know, I am good friends with Andrewe offline. I saw your reference and showed him your posts - he can't access of course since suspension. Following is a message from him with his current thoughts. He is a holder.
I don't hold TZN atm but would endorse his thoughts- management has positioned them well for long term success once we get through the current recessionary environment.

---

Hi guys
I have been reading your posts on TZN and its good to see so many talking about it. Seals was reading hotcopper and i peaked over his shoulder in case anyone is wondering.
Its been an absolute tragedy on the markets and sad to hear about your margin calls. As always TZN is sold up and down on fairly low volumes.
If we could apply warren buffets method of investing to TZN then i think we would have this picture.... firstly we would imagine the market was closed and we wouldn’t know the price of the share. Secondly we would look to see if the management was still reliable and achieving their targets. Then we would ask if they are progressing the projects along the intended path at the anticipated rate? Then we would look ahead to see what their projected earnings were going to be from those projects. Then we would look to see if the price was a fair price for a good company. Based on all these points giving a big tick, buffet would buy or continue to hold.
In what way is TZN not a Buffet stock? 1. The price of zinc is probably too volatile for him and 2. The commodities are too cyclical for his way of estimating future earnings.
How will TZN perform in a USA and world recession? Probably ordinary! Does it deserve to? No! I expect the whole resource sector to be down for years based on the anticipated recession.
Can TZN be earning $100 mill pa and be $1-$2 a share? Answer is yes but unlikely. Look at companies like Macarthur coal who are priced at about 2 x future earnings and a divvy of 25%. They are obviously priced for future declines in earnings. The markets are not rational at the moment. Have a look at the video below, the guy makes a lot of sense. http://www.cnbc.com/id/15840232?video=890339229&play=1
If one has a long term view then these may be great opportunities but they may get better as the economy of the usa unravels. When does it become unable to go lower? When its worth the cash? When its on a PE of 1? I cant answer these things but i can say that these prices are not rational right now. The time for preserving capital seems to have gone and we might get some bouncing between 80c and $1.20 for a period of a year or so. I will be a buyer at the 70-80c level for sure. You can sell now but what for? Long term you will make money here so i would treat my holdings as though i just bought them today.
On TZN’s recent resource upgrade i am not overly impressed as i thought the core would be around 12% from previous comments from Kevin Moriarty. Therefore i thought 8% a tad low. Would that have made any difference to the share price? No!
The plan was always to mine that high grade core asap however it may not have been as urgent when the share price was higher but now it is vital to get us producing more and quickly.
There is a big resource there and it will be profitable when others are going bust. Think how wise management has been buying low cost and low capex mines. Recently they put a bid in for another mine in Algeria and the chinese outbid them. Well that was when the share price was $3 plus, so the chinese paid way too much and even more so now the market is collapsing. Good management to not over pay wasn’t it!