interesting week and future outlook: beers :)the coming week - we all know it - will be interesting.
Good news from Trevali will influence its stock valuation. The situation has materially improved and this has not at all reflected in the share price. We re at 28% book value again and everyone kinda knows that this has nothing to do with reality anymore. So its all just about waiting for institutional money and fund money to flow back in.
As for the zinc price I expect it (just my gut feeling) to go lower the next weeks, touching 1.06 or maybe even 1 USD/lb as I have a feeling that the stock market might tank in November due to negativity with Covid and US elections etc.
What people do not take into account enough is that Trevali is probably already mostly or even fully hedged at prices above 1.10 till year end and maybe even further into spring. Hedging till March would be ideal as of course it would limit the short term upside, but definitely save the company long term as it d assure positive cash flow and from March (retroactive to January) we ll see TC that will assure TV reaching 100% book value again in 2021 = 0,50 CAD/share.
Expect the company to surprise us with more positive news till year end. Ricus isnt just sitting around hoping for higher zinc prices: he has many years of experience and is worth every single Cent of his salary. And I trust him, which is the most important part. 2020 was the start for a great turnaround story in Trevali. As with every turnaround, it takes time and the results only show up a lot later. But once again: just look at Sibanye Stillwater, in which I invested in 2017. They had difficult times in 2018 and 2019 and I repeatedly quoted in that stock forum "In Neal we trust" (Neal Froneman = the CEO). It was the right decision, the stock 5 folded and over 30.000 Lonmin jobs were saved. So lets trust in Ricus and the management plus board. They saved Trevali despite horrificly high TC plus a zinc price collapse and this management will continue to add value for all stakeholders, including shareholders.
As for 2021, I wouldnt be surprised to see a "commodity year" with zinc prices breaking out of the 1.15 range, touching 1.30 as the (cyclical) economy will rebound plus huge infrastructure bills kicking in. It s not an unrealistic dream, but a 50% chance that we ll see 1.30 zinc in combined with TC at 200 USD in spring 2021, guaranteeing huge profits for TV and a high probability to attract an investor ready to spend the money needed for RP2.
Wednesday after the close and Thursday after the telco we ll all know a little more.
Lets all work together for the next months.
For us investors that means, not to sell after the good Q3 results and outlook, but to keep the shares, to be loyal investors and enjoy our common success together in summer 2021, having beers together at one of Vancouvers beaches :)