Why is FCC so weak?(cross posted from Hot Copper)
I hold FCC and am not happy with the current price. Why is it so low?
The investment thesis for FCC goes something like:
1. Find a high grade vein at Cobalt Camp. It need not be large - 3 years supply would do.
2. Restart the refinery, start shipping to highly motivated N American customers.
3 Use this position to skill up, create relationships with customers and maybe finance the Iron Creek mine and processor.
Without 1. the whole story unwinds. The refinery sits. IC is three years from production. FCC can only be valued on it's distant potential, not near term success.
FCC has an active investor relations function. Yet we have heard nothing on the Kerr property since 25 May, nearly 5 months ago when it reported:
o 0.11% Co, 28.1 g/t Ag and 0.99% Cu over 3.3m
o 0.21% Co, 89.2 g/t Ag and 0.96% Pb over 1.8m
127m deep. I don't think this is a commercially viable result. It certainly has not prompted further work.
No word either on the refinery review examining a restart, perhaps as a toll refiner or muck pile processor.
FCC began as an aggregator of former CC mining properties, managed to pick up the refinery and then US Cobalt was vended into it. I think Mr Market now values the CC properties at nil, the refinery at not much and IC at a net present value discount.
Someone tell me I am wrong.
Ash