Bikenut - while I don't think it is a producer at this level, it still could do so profitably if it improved its production facilities, and found near surface resources.
With alot of the new tennemants, they still have to spend alot of money taking the tops of them (if you could put it that way) to access the ore. So mining costs are pretty high.
All of their switching between copper and nickel production wasted time and didn't help. Yeah fair enough when Nickel is at $50,000 per tonne, then yeah switch and get it out of the ground. But the time it took them to switch properly (and all that wasted money), the price had already gone down below $30,000 - not as attractive.
Still think this is potentially now a take-over target or merger. Lets face it they have copper/nickel in the ground, but need to firm up the resources. They have production facilities (which need to be improved - and are apparently), and now they have Iron Ore - and potentially alot of it!
What hasn't been mentioned much is that this exploration for Iron Ore, is only on the one tennemant. There are around 3-4 others 2 of which are in a JV with Legend, and fox at least has (from memory) 15%. STill good prospects, but personally I'm a little bearish on Iron Ore prices if the world economy continues to slump.
So I'll continue to hold and see how this plays out. But when/if metal prices rebound I'd like to see foxes facilities at Whundo and Elizabeth ready to jump into production straight away. Cash-flow should be priority.
One last thing (cause I seem to talk alot and am a bit passionate), is that now it has stopped production - it is going to be hard to use EPS or any earnings multiple to value the share. We are back on an explorer basis now, and really can only value potential.
Oh and something funny. I remember a year or so ago Fox saying they'd pay dividends. Think that ice cube in Hell melted the second after they said that!
FXR Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
