16-year old Stock picker, Gambling Industry, Ethanol, Tampakan, Stock Thoughts: PX

16-year Old Stock Picker

Check this out:

http://www.bloomberg.com/video/is-this-16-year-old-stock-picker-the-next-buffett-lJswdaHVSASgGYCfWGrfzA.html

Investing in what you already know is a good way to invest but it does not mean you stop expanding your knowledge. 🙂

 

Gambling Industry

An idea on how big the gambling industry:

http://www.businessmirror.com.ph/index.php/news/top-news/9453-gambling-betting-activities-now-a-p42-billion-industry

This may be a good reference in analyzing gambling stocks.

 

Ethanol

Rising global demand for oil:

http://www.interaksyon.com/business/54806/rising-global-demand-tight-ethanol-supply-driving-up-fuel-prices—-doe

The rise in fuel prices are also attributed to the ethanol blend requirement.

Ethanol prices rising:

http://www.futuresmag.com/2013/02/12/brazil-ethanol-topping-sugar-signals-millers-may-f?t=commodities

 

Tampakan

The locals actually like the mining operations to commence:

http://www.businessmirror.com.ph/index.php/news/top-news/9461-tribal-leaders-in-south-cotabato-press-for-tampakan-clearance

That’s nice. 🙂

 

PX

PX paid P1B fine:

http://www.bworldonline.com/content.php?section=TopStory&title=Philex-pays-P1-B-fine&id=66062

More on PX here:

https://fundamentalenthusiast.wordpress.com/2012/09/20/everything-about-philex/

Stock Thoughts: FGEN vs GTCAP, AT, PX, EDC

FGEN vs GTCAP

Now I see how GTCAP and FGEN are equally valued.

After wondering why FGEN is battered and GTCAP enjoying the spot light, I reviewed my analysis regarding the two companies. I conservatively estimate GTCAP to recognize an EPS of 31.57 while FGEN was originally estimated to have an EPS of 1.01 for 2012 but since 3Q EPS already stands at 1.73 let’s use 1.80.

GTCAP at its current price commands a PE ratio of 21x and FGEN at 12x PE.

Oh! Wait, did I say equally valued?

 

AT

Before I had my severe eye strain I was digging on this company and finally released it in December 11 to my clients.

Luckily just yesterday, Carmen Copper, a wholly owned subsidiary of AT declared P1 B cash div and probably served as a catalyst to push the price up to its value of 18.75 for 2013.

Hmmm, I wonder how far the price of AT could go if copper prices peak in 1Q or 2Q of 2013?

(I release stock reports in my blog or in traderscamp with a week delay)

 

PX

Everybody knows that the price of PX would go up again once the Company resumes its commercial operation in 2H of 2013 but everybody too is waiting for the bottom. Lol

I won’t be surprise if it plunges again on the news that it pays P1 B for environmental damages.

Should you be worried? The answer is no. They can pay.

 

EDC

EDC’s price battered to as low as 6.65? It doesn’t make sense. My guess is this is due to delay of the Bacman Geothermal power plant.

Everything About Philex

Philex Mining Corporation (PX) was incorporated on July 19, 1955 and went public on November 25, 1956. The company derives its revenues from sale of gold, copper, silver, and petroleum. Gold, copper, and silver contributes 96% of the Company’s revenues net of marketing charges through their operation of Padcal Mine in Benguet. Petroleum which provides approximately 4% of the Company’s revenue is sourced from their interest in the Galoc oil field through their interest in Philex Petroleum Corporation. Below is the Company’s corporate structure:

PX’s Padcal Mine in Padcal, Tuba, Benguet Province produces copper concentrates containing copper, gold, and silver.  The Company has an existing long-term gold and copper concentrates sales agreement with Pan Pacific where at least 60% of the total annual production is committed since 2009. The uncommitted balance was subject to a contract with Louis Dreyfus Commodities Metal Suisse S.A. The value of the shipments is initially determined based on prices during the final quotation period.

The final quotation period for gold and silver is one month after month of arrival in Japan while quotation period for copper are two months after month of arrival in Japan for the period April 2010 to March 2011 and three months after month of arrival in Japan for the period April 2011 to March 2012.

Padcal mine is covered by two mineral production sharing agreement (MPSA), MPSA 156-2000-CAR and MPSA 276-2009-CAR valid up to 2025 and 2034 respectively.

As of December 31, 2011, the Padcal Mine’s mineral resources and proved reserves are estimated as follows:

In August 2011, the economic life of Padcal Mine was extended to year 2020 from 2017. A total area of 13,729 hectares within the municipalities of Tuba and Itogon in Benguet is covered by the following mining agreements:

The Company spent P324.2 million and P271.7 million in 2011 and 2010 respectively for environmental compliance.  The Company and its subsidiaries have been consistent winners in environmental contests. Padcal mine has been ISO14001 Certified since 2002 for Environmental Management System and won several environmental contest namely, Best Mining Forest first runner-up in 2010 and 2009, and champion in 2008, 2007 and 2011[1].

The Company is currently exploring and developing mine sites which is done internally or through drilling contractors incurring P2.022 billion, 1.246 billion and P855 million for 2011, 2010, and 2009 respectively.

The Silangan Project which is owned by the company through Silangan Mindanao Mining Co., Inc. (SMMCI) covers Boyongan and Bayugo deposits in Surigao which are currently under pre-feasibility stage. Anglo American Exploration (Anglo) completed a prefeasibility study of the Boyongan deposit in December 2007 and concluded the project to be not feasible which PX disagree. In November 2008, Anglo offered to sell their 50% interest in the project. In February 2009, Anglo’s interest in the project was purchased by PX for $55 million.

As of August 5, 2011, Boyongan and Bayugo which is covered by MPSA-149-99-XIII (to expire on 2024) and EP-XIII-03 Lot-B located in Surigao de Norte has the following estimated mineral resources:

In May 2011, the Company executed a Farm-In Agreement with Manila Mining Corporation through the purchase of 5% interest in Kalayaan Gold-Copper Resources Inc. (KGCRI) for $25 million[2] where the Company should conduct exploration activities in the Kalayaan properties (adjacent to Bayugo deposits) for three years. Should it declare commercial feasibility within the period, PX will have the right to increase their holdings in KGCRI to 60%.

Other mining projects of the Company that are at advance stages are the Bulawan mine in Negros and Sibutad mine in Mindanao. Bulawan mine and Sibutad mine operated on 1996 and 1997 respectively and both ceased their operations in 2002 due to unfavourable metal prices. As of December 2011, the Company is contemplating in reopening the Bulawan mine and conducted diamond drilling to come out with a resource estimate. Sibutad mine which has a remaining resource of 17.1 million tonnes with 0.84 g/t is temporarily at standby due to the standing open-pit ban in the province that they are operating.

Another source for revenue for the Company is the sale petroleum. Petroleum revenues came from their ownership of Philex Petroleum Corporation (PXP) which has a minority interest in Galoc oil field. An interesting business development for the Company is the commencement in commercial operation of their subsidiary Brixton Energy & Mining Corporation (BEMC) in 2010. BEMC previously engaged in buying coal products from small producers and selling it by bulk since 2005.  On January 16, 2012, BEMC entered into purchase agreement with Republic Cement Corporation for the delivery of 50,000 MT with a base price of P3,200/MT. On May 21, 2012, PXP expressed their confidence to be able to sell 100% of BEMC’s output of 100,000 MT of coal and plans to expand operations through bidding for the six coal blocks near existing Brixton coal project. [3]

Other Data

Source:
1.   “MINING FOREST PROGRAM REFORESTS 88% OF DISTURBED MINING AREAS”; http://www.mgb.gov.ph/art.aspx?artid=320
2.   “Agreement with MA for exploration and development of Kalayaan Project; Lifting of trading suspension” http://www.pse.com.ph/resource/disclosures/2011/pdf/dc2011-3577_PX.pdf
3.   Clarification of news article: “Philex expects to sell off full Brixton output” http://www.pse.com.ph/resource/disclosures/2012/pdf/dc2012-3916_PXP.pdf

Disclaimer: I do not claim to be an expert and nothing I say should be taken as a recommendation to buy or sell.