Mercator Minerals Ltd MLKKF

RE: A crack in the price of moly

[jims101]

I'd like to be as positive as your are, 24-Karat about ML's settling price for Copper and Moly. A plunge even next week to $1.75 is a possibility while a fall of Moly by years end to a price of $20, as ML will receive net, could as easily be in the cards. Even those prices should they persist (or hold) through the end of 2009 will provide a 2009 closing CF runrate at full production of something near $3 a share..The problem is that that operating and cash generating level is over a full year out; a full $3 of annual CF on the balance sheet another year away ... that's alot of time of unknowns. Not much of a multiple will be paid for these forecasts while deflation, deleveraging, forced liquidation are the great concerns...We've been saying ML represents great value relative to future earnings all the way down. This valuation thesis has not proven to be a good reason to own the stock during a time when negative momentum is so strong and I suspect won't be through the end of this year.

I continue to hold my reduced position in ML because to sell it would be like giving it away at this juncture, especially with the Canadian dollar at 82 cents, and I don't immiediately have need for the proceeds of a sale, AND as importantly I don't have to worry about scrambling back in should there be a sudden and I'd say unexpected turn around in base metal stocks..all flawed reasoniing in retrospect but where as things stand now.

DON COXE is at his most upbeat and eloquent on Financial Sense dot com this week in the second hour...well worth the listen; it'll pick up the spirits of the most disspirited.Good news is that M2 seems to be growing now....Monetary Base likewise.

https://www.financialsense.com/fsn/main.html