Reason why TGS hit 0.068 and drop back down to 0.063 is because...

Reason why TGS hit 0.068 and drop back down to 0.063 is because of day traders closing their spreads. I worked for a prop firm for a short time, and the momentum today is consistent to what i have seen with t-bill spreads. Basically get in, get your 2-3pts spread and get out. A lot of people, some which i know personally bought TGS yesterday and closed with a 7pt spread, getting an daily return of 8-10% which is quite decent.

Im not worried about the momentum drop, in fact i welcome it.. Majority of day traders have now exited TGS, makes me feel comfortable knowing that shares have changed hands from day traders (with short term views) to the hands of investors (with long term views). This means greater stability for the long run.

I've personally bought in at the market lows a few months back, i wont be selling out until the share hits double digits at least. My fundamentals indicates a long term share price of 35cents slightly higher than what UBS valued it, im also quite confident in my figures.

The values assume refinancing at the same rate, current copper price of $2.86 lb and average guidance AISC of $1.63 per round. I also believe UBS used a harsher discount rate (to compensate for risk of default). I also believe they haven't fully incorporated the USD to AUD transparency, what i mean by this is that the reports published in US$ while we are trading TGS in AU$. My 35c is based on Aussie Dollars, theirs might be in USD, not sure.

Ask me in a years time how TGS is going, we will see if its anything close to what i have valued it, only thing holding back the rise in TGS SP is the amount of people who have been burnt this year, reluctant to go back in.

Nikola Bauranov
Office Paraplanner
Master Of Applied Finance.