Fundamentals of QBL, page-19

- 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.

Recyug
well done and well said, appreciated mate...

TU and I hope you contribute more to Qbl thread.

all the best