An encouraging backdrop for RVR with rising Zn prices. Commodity trader, Peter Brandt, says that (lack of) supply driven rallies are often violent ... perhaps there is no hidden Zn left and this rally will explode.
Apart from the Zn price, the biggest driver for RVR, IMO, will be when the new reserves estimate is released. The biggest issue holding RVR back is the short LOM. An extension of 2yrs from the current drilling at Far West would enable the Sell Side Analysts to put much higher valuations on the stock and upgrade their advice to clients.
Whilst we've learned that there have been 'hidden stockpiles' and lots of gaming from various parties previously, this ***** chart shows that after 5 years of steadily falling stockpiles this must become a major issue at some point and likely very soon:
If I was Glencore, who is undoubtedly influencing supplies, I wouldn't relent when the buyers start to whine ... I'd go for the jugular before locking in LT contract prices at high prices for years to come (much like the U miners did in 2007 and again in 2010).
Zn could go a lot higher for a brief period. All good stuff.
Cheers
John
RVR Price at posting:
24.0¢ Sentiment: None Disclosure: Held
