Catch-up and reflectionsGreetings to all.
I have just returned from almost 6 weeks overseas and have been trying to catch-up on various interests including poster colleagues' perspectives here. Thanks to many of the regulars for informative observations in posts since the Q4,2006 actual results and the big environmental news......random examples extracted:
Midaszone.... "The fact is there is a major environmental issue"....I fully agree(who wouldn't?)
Chartman3.... "Tough break"
99921.... "I interpret that the company was not forced to stop mine operating, it chose to do so under the circumstances (of not being allowed to export their lead concentrate product).....I agree.
Curyman11.... "this is over-reaction with people focused on words like "closing" and "3-4 months" delay. I(Curyman11) still believe patience will be rewarded here"......
I personally believe that market reaction was quite usual/normal and that Ivernia is trapped at current trading level(say $1 to $1.25 general range) until an announcement is made that the Australian authorities have agree to allow Ivernia to export Lead again or further negative announcement(s).
Leakeybill.... "stopping shipments is a guilty verdict(post ID 14589359)"..... I disagree - Ivernia was forced (as I understand the situation) to stop export shipments by the Australian government.
GBH in post ID 14590809, outlined "a bull and bearish case" and wrote "I welcome any well developed arguments for the bearish case". GBH identified for Ivernia factors favouring the bearish case including:
- Some humans have tested +ve for over-exposure to Lead in Esperance
- Ivernia may get sued
- What happens when the Lead gets to China(any problem there)?
GBH identified for Ivernia factors favouring the bullish case including:
- "Senient had no hesitation in extending credit"..... I agree that this is positive, but I also note that Sentient are still major shareholders.
- "Ivernia has alternative options(sealed bags and containers)"...
but I recommend we also remember that permission to export must first be restored by the Australian authorities.
- "Ivernia could also, if need be, develop a smelter at the site"...
Yes, was in fact part of original IVW plan for year 2007 but was changed by management when worldwide overcapacity of Lead smelter facilities developed(due to scarcity of lead concentrate) during the past couple of years and IVW management then decided not to proceed with their metal production plan.
Note: Re-establishment of the metal production strategy is not a stock-supporting option IMHO under current circumstances.
- GBH suggested that it would be "The port rather than Ivernia who will face any legal action".... personally I expect that if legal action arises, risk will be also strongly negatively linked to Ivernia by the marketplace.
- "Fundamentals of the Lead marketplace remain strong".... I agree.
Under my current time constraints the following points may not be well developed, but are personal additional concerns as I review the data:
1. Q1 and Q2,2007 Earnings clearly cannot be good
2. While December 31,2006 report showed $17.1 million in cash, Working Capital was negative ($9.58)million due to the short-range debts coming due on April 28,2007 .
3. Probable dilution in the order of 15% to 20% embedded in the latest Sentient financing arrangement...... Sentient support is great but notice the conversion aspect of the new debt financing and the interest rates.
4. Uncertainty resulting from Halt to mine operations.
5. Significant reduction to the Guidance provided by Ivernia as late as February 26,2007 on SEDAR.
6. Anticipate big jump in cash costs per pound shipped and Total costs/lb shipped(oper. & non-operating) during H1 2007.
Vocex1 wrote...."It appeared IVW had finally, after many setbacks, gotten it's act together. Apparently, not so." also he wrote "Now we see a great deal of consolidation activity in base-metal operations..... and the market for a take-over of IVW is challenging(low premiums) for existing shareholders".....
I agree but also believe that IVW will no be interesting in such a "take-over play" until after a clearance to export Lead again is received from the Australian authorities, in which case Ivernia shares would again jump IMHO.
Vocex1 wrote "Short-sellers have had their way with IVW for years and this will continue to represent a hindrance to realization of shareholder value, fundamentals or not"...... I agree(unfortunate as this may be for longs). Individual choice relative to Ivernia now is a heightened focus on trade-off between opportunity and risk,
Peace,
Good Decision-Making for All,
ElJ