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bz1516

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  • U.S. Silica Well-Positioned As The Permian Basin Becomes The Core U.S. Frac Sand Growth Market [View article]
    You have made a good case that SLCA is in the lead in Texas. Can you be more specific why you think either HCLP and EMES are takeover targets? As MLPs the route to acquisition would have to be through their GPs who would have to desire that outcome.

    I actually see SLCA as the best takeover target in the industry by someone like HAL. Their are really good reasons why that would be in both parties interests.
    Sep 24, 2014. 08:12 AM | 2 Likes Like |Link to Comment
  • Vertex Energy: Outpacing Rivals And Becoming Dominant In Re-Refining [View article]
    I agree with Sean. ROI is much better putting together a bunch of smaller companies. These smaller companies are selling based on what they receive for product which is not going to be nearly as favorable as Thermo, so less synergy.
    Sep 23, 2014. 08:52 PM | Likes Like |Link to Comment
  • Buy U.S. Silica Holdings Now For Explosive Potential Returns [View article]
    1 Dilution from convert and financial engineering used to hide it.

    2 Overpaying for drop down properties. Compare prices paid to actual cost of developing them and especially costs used by competitor.

    3 Lack of adequate disclosure on lost contract with Baker Hughes.
    Aug 27, 2014. 01:25 PM | 1 Like Like |Link to Comment
  • Buy U.S. Silica Holdings Now For Explosive Potential Returns [View article]
    The big three sand companies mentioned are the big three public companies which are also the only public sand companies companies. There are two other private companies that are estimated to be larger than these 'big three".

    On governance issues I have ruled out HCLP as an acceptable investment. it has built-in dilution that requires quite a bit of work to get a handle on. I own both SLCA and EMES.
    Aug 20, 2014. 10:20 AM | 1 Like Like |Link to Comment
  • Buy U.S. Silica Holdings Now For Explosive Potential Returns [View article]
    This article is a good introduction to SLCA for those entirely unfamiliar with fraccing. However the two most important investment issues for sand fraccing companies, increased intensity per well and the nature of the supply response are not mentioned at all.

    It is estimated that 20% of wells drilled now use vastly increased amounts of sand per well with a potential of between 70-80% of all fracced wells. The sand usage per well is now approaching 15-20mm lbs of sand per well, compared to typical usage of about 5mm lbs just a couple years ago.

    The other issue of supply response is much harder to get at, but all resource plays eventually have to deal with supply catching up to demand. The best estimates i've seen show this happening no earlier than mid 2016. obviously as sand usage growth rates increase that date gets pushed back.
    Aug 19, 2014. 01:48 PM | Likes Like |Link to Comment
  • 4 Mining Companies To Bury And Forget [View article]
    Apple Enthusiast, not enough upside potential in SLCA or EMES? These are real companies growing rapidly. Why bother with a promoted sand company of questionable value with lots of execution risk?
    Jul 1, 2014. 08:45 AM | Likes Like |Link to Comment
  • 4 Mining Companies To Bury And Forget [View article]
    I think this article will help SLCA share price.
    Jun 27, 2014. 01:39 PM | 1 Like Like |Link to Comment
  • Lynas Can't Afford Further Delays [View article]
    Markie, if you put yourself in Sojitz' place what are they do to? They need product including HREEs. They need the goodwill of their suppliers to guarantee their source of supply of all REEs, not just the ones LYC can supply. The other potential Japanese customers are in the same position.

    If you recall the Hitachi situation with MCP, the Chinese offered them a deal they could not refuse as neither them nor LYC was in production and it was very uncertain if they would ever become self sustaining. I doubt Sojitz can break those agreements at the point in time of LYC's choosing or if they would want to when these companies cannot earn a profit in the present supply demand environment. Add in the dependency on the same Chinese sources for HREEs and imo its a non starter for them.
    Mar 20, 2014. 10:12 AM | 1 Like Like |Link to Comment
  • Lynas Can't Afford Further Delays [View article]
    Sorry, but I disagree completely with the premises in your article. Lynas may have production problems, but then again they may not. Its very difficult to say one way or the other because of the brinksmanship in the company’s disclosure policies.

    If you go back several years there were constant construction delays. It was never clear whether the company’s inability to close marketing deals was driving the “construction delays” or was it the other way around? Since then construction problems have morphed into production problems, but those marketing problems are still lurking in the background. As time has gone on it looks more like the marketing problems are driving the production problems as they likely drove the construction problems as well.

    If you review Lynas’ prior disclosure carefully, the products they have sold appear to be concentrates. The only place these concentrates can be sold is China. Concentrates sell at a fraction of the price of separated oxides. So LYC doesn’t have any commercially viable customers yet. And that actually makes a lot of sense.

    A couple of years ago facing arm twisting pressure from China and the prospect of committing to a source of supply from an as yet untested and unprofitable producer, Japanese customers and others chose to stay with the suppliers that they could rely on to meet deliveries at a reasonable price, those located in China. There are no customers today who can commit to sufficient volume to make LYC viable.

    LYC’s cost of production is based on phase 2 production of 22,000 tons. Taking LYC’s own disclosure, the costs at the phase 1 volume level jumps to something well into the mid $20 range or higher. That is based on the basket price.

    Yet the basket price means nothing. The only products with good demand and decent margins are Nd and Pr and to a much lesser extent dysprosium. Over 70% of the basket price volume, Ce and La, has a $5 handle, not enough to even cover marginal cost. That means they can’t be produced to reduce losses even temporarily. And that assumes all these prices would stay the same if LYC and MCP were to start full production and flood the market with more product.

    Obviously the price would fall further when that happened. But that is not an issue because there are no customers outside of China to sell to. Even the US gov’t appears to have more than enough dysprosium stockpiled.

    The plain unfortunate fact is there are multiple redundant reasons why LYC will never become profitable and never go into anything close to full phase 1 production.
    Mar 19, 2014. 06:14 PM | 1 Like Like |Link to Comment
  • 'Fracking Sand' Is The Business To Be In - Canada Is The Country To Focus On [View article]
    I agree with your thesis about frac sand, but have two modifications.

    First EOG the leader in using more frac sand per well is also using shorter horizontals, apparently to maintain pressure. The very large increase in sand per foot of horizontal more than makes up for the reduced length.

    I don't see how you take your thesis for increased frac sand and then transfer that to Canadian plays? It would seem to be abandoning the good thoughts you had on frac sand usage?
    Mar 17, 2014. 10:43 AM | Likes Like |Link to Comment
  • Why Rare Earth Prices Are Poised To Rebound And Who Stands To Benefit [View article]
    If Nd prices were to improve very substantially you would be correct, but one slight increase yesterday in the last few months means little when the idealized basket of prices which can't be realized anyway needs to more than double to make these operations economic. MCP may be in a better position than LYC, but its still not in an enviable position.
    Feb 24, 2014. 08:10 AM | Likes Like |Link to Comment
  • Why Rare Earth Prices Are Poised To Rebound And Who Stands To Benefit [View article]
    Ausheds, I've seen your work going back to the $4 club on hot copper. You have presented some very good thoughts about LYC over the years. However I don't see where LYC has established any proper customers yet. Take a close look at all the press releases, operations updates etc where LYC discusses customers and parse them very carefully.

    Throw out all the people they are having discussions with. Through out all the people they are selling carbonates to or concentrates to or anything that is not called an oxide because all concentrates and carbonates are going to China and they are not proper customers in my book. Now through out all the cerium and lanthanum oxide because they are $6/kg even internationally. what do you have left? Nothing.

    It even gets worse. China has the whole downstream supply chain. How can OECD customers switch from China when at the current burn rates LYC and MCP will be out of business. Besides MCP has to send Mt Pass output to China anyway.

    One last thought. Hasn't it been convenient that LYC for the last several years has had both operational and government approval problems, as well as a problem with sales? its never been clear which one has been the chicken and which one the egg.
    Feb 23, 2014. 09:43 PM | Likes Like |Link to Comment
  • Northern Tier: Upside Potential With Bakken And Canadian Crude [View article]
    What is your take on the new pipeline scheduled to open later this year that will bypass NTI with Bakken crude, taking it to Chicago, and then after that a new pipeline opening from chicago headed south to connect with gulf coast refineries? That would seem to put a big dent in its cost advantage?
    Feb 16, 2014. 11:13 AM | Likes Like |Link to Comment
  • American Capital Agency: Conference Call Turned Circus Act [View article]
    The sandman is getting closer to the mark, looking at regulators is the first place to look in my opinion.

    This could accomplish two important objectives for them. Before stating what ZI think they are I should say in theory it makes sense buying mbs at a nice discount this way.

    We know they are being looked at as being systemically important and at least one proposal is to restrict companies with over $50B of agancy mbs. These actions reduce their mbs while buying new mbs through the reits common stock below bv. Secondly thay allow AGNC to maintain AUM a very important objective for them and their parent.
    Feb 7, 2014. 09:41 PM | Likes Like |Link to Comment
  • Capstead Mortgage Proves The Worth Of Its Investment Strategy In Q4 2013 [View article]
    Another good quarter at CMO.
    Feb 3, 2014. 12:49 PM | 1 Like Like |Link to Comment
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