Tambourah Metals Ltd T.TMB.W

RE:RE:RE:IceBEAR

[Alphaseeker1984]

I would add a few things to dosperros's most excellent observation:

1) Ice Bear is supposed to be an ultra pure grade of ethers.   TMB ethers are very high quality and reliable, Borregaard's new product will need to show some significant advantage to motivate customers to switch.   Furthermore, TMB ha been making thier own investments in new upgraded products and anticipate further developments going forward.   So the knife cuts both ways as TMB will be strengthening their competitive position.

2) The real competitor to cellulose ethers is cotton production and not RYAM or Borregaard.   Sure they fight over the same customers, but demand for their collective production rises and falls with the availability of cotton linters, which as a result of China's agricultural policy shift away from cotton production is resulting in a huge uptick in demand.    China's policy is a result of several factors which are likely to continue the demand cycle for ethers for many years.

3) No one is making these huge CAPEX investments to steal market share...that would be insanely stupid and no board would approve that strategy.  The reality is long term demand for ethers is great.  Sure there will be cyclical swings but the trend line is not going down as growing populations need the things (food, pharmaceuticals and personal care products, paper, adhesives, paint, building products and textiles) which drive demand for cellulose ethers.

TMB's cellulose business is a great long term cash generator.   They are getting no love right now from the market but that will change as the results continue to outperform.  The lumber dispute is a mild irritant which is holding the company back IMO.   Perhaps the amount of debt on the BS is also an issue, but that concern along with the debt will disappear soon enough.  

TMB is trading at a significant discout to some forestry sector peers - RFP is just one example.  Take a look at Stella Jones.  250mm of EBITDA, 3.6 billion market cap and 4.2 billion EV.    Stock is trading at 13x on an EV/EBITDA basis.   Cascades - 400mm EBITDA, 1.5 billion market cap, 3 billion EV.  Stock is trading at 7.5X EBITDA .     There are many others...

Sooner of later TMB will see the move we are looking for.   Ignore the noise and terrible press...for some reason the FP and other media organisations woudl prefer to dump on TMB rather than write an article about the turnaround and bright future.