BTX - The final frontier

[MoSteph]

Well I just bought some and here's the reasoning for anyone who's interested. Further thoughts from others would be sterling.

Reasons:
1) Directors and institutions obviously buying - OBV sky rocket.
2) RSI divergence - climbing contrary.
3) Stochastic looking good.
4) Overreaction on fundamentals
5) Money-flow trend-line break.
6) Directors hold a lot of shares... small confidence
7) Large buyer at 35c; easier stop-loss placement and exit.



http://img.villagephotos.com/p/2005-2/949170/BTX.JPG

[MoSteph]

The end of the week has come and BTX moved not as quickly as thought, but still well. I find intriguing how a weekly chart can look more compelling.

http://img.villagephotos.com/p/2005-2/949170/BTXweekly.JPG

[kura]

Your obviously keen on them, what do they do ?

[davidrob]

Hi Mo Steph and Kura,

They "do" tin.

They "do it" in Tassie and north Queensland.

Two Main Tin Projects. (1) Renison Bell (Tas).

(2) Collingwood (Nth Qld)



Assessing what they "do" -- and assessing the intrinsic value,inherrent in what they do.....

And the Margin of Safety inherent in "who they are" and "what they do" & the forseeable forward Earnings and worth & value that will be later be potentially ascribed by Mr Market, to BTX....

-- and the risk to be applied and that is currently and in the future might be implied in any forward factored PE, for BTX...

..... --- is to my way of thinking; infinitely more logical, than drawing wiggly lines and charts,for BTX .... ....at least from from where I sit ....

So therefore, re BTX, a very appropriate question Kura !! ;):)


However:... fortuitiously, with this one (BTX)-- YES, it is on my Radar, and have done approx: 1/3 of my own necessary Research on BTX ....

Result ?

So far, so good. Quite Good, in fact.

MD/CEO is well regarded and respected GEO...

Tin Reserves seem Good.

First glance tells me that BTX ... m could be a potentially

"intrinsically undervalued opportunity".... in my own view ....

However... BTX Does currently have a Market Cap of 75 millions.....

BTX's 52 week rolling High/Low share price is as follows: High of $1.06 and Low of $.32.5 cents respectively, with current price now at, .39 cents ......

--so if it goes back to its 52 week High, that is certainly an excellent outcome....for BTX shareholders buying in at Current prices.....

Issue is; what are the Tangible ahrd evidence based reasons, why that might really be likely to occur....

And ... why might it do that in the next seven (7) - nine (9) months approx..??...

The very Significant Increase in Trading Volumes and Directors buying BTX shares... IS a Goodish sign, I have to admit....

-But in my opinion, we NEED a bit more than just that... We need to sleep well at night, when and if.... a Wall of Worry and a slough of Despondancy and Clouds of Gloom were... irrationally whipped up for a short season, to inexplicably hover over BTX, and we are holding their Share scrip .... so we can calmly enjoy ouyr Crownies and sleep nice and soundly and deeply ..... and have the Hard Evidnece deeply implanted into out consciousness and Reasoning, so we CAN forget & Ignore completely.... down the track.... the doomsayers .... when and if they come out of the woodwork ..... between now and hopefully Big Big Profit Taking Time.....

Otherwise we may fall prey to thier protestations and worry wart fear mongering....

Ultimately therefore : we have, with BTX, to ascertain the following:

......(1) Just exactly when are BTX -- going to//likely to..... mine..??

Both on the "best case and worst case scenario....

(2) For how many Years production are the proveable High Quality commercial Tin reserves going to be mineable ?? ,

(3) how "proved up" is the TIN resource ?

(4) how close to production --- both at the conservative and optimistic end of the Spectrum ?

(5) at what Grades and Net Margin will the Tin be mined in soon/forseeable future ?

(6) what are the impediments ??, have they Got the right to mine ??? ie: Mine Licences yet? (at this Market Cap -- one would about hope so, in my view.....),

)7) what is the Tin Price today and tommorrow and maybe the next day ?, ...

By the way, all the above ..... said...

-- my own initial investigations are Positive to Very Positive for BTX ....

And am close to considering seriously to potentially invest in BTX....

Just need to check out a few more issues...

Kindest Regards,

Robbo :)

[kura]

Rob, I just had a quick look at them, back in May they had a large placement at 65 cents, then in July they made an apallingly worded announcemrnt, regards recovery rates & prices, that implied Renison would close, they made a clarification statement a few days later, but too late, the market had just wiped out 50% of their market capitolisation, and price never recovered.
My guess is market wants to see results, before price returns to pre crash levels, it could be worth a bit of a short term punt, but I don't know enough about the economics of tin, to be a comfortable long term holder.

[MoSteph]

It really is such a badly worded announcement. Still, if that, and the bad news contained within it, are the grounds for why the value halved, then a further correction will ensue. Somewhere between the hot-air from before the July and the cold-air currently lies the true value. I think those with an eye on BTX are indeed seeing it as an "intrinsically undervalued opportunity".

Davidrob this does put forward the question of what an "extrinsically undervalued opportunity" would be... Could it be that the on-market value is below what it should be? ;)

[ananda77]

June 9: price(up)/volume(down) divergence...smart money out - small holders in.

June 30: price action follows divergence

August 22: new low of 33.5 followed by substantial increase in volume accompanied by weak to moderate price action.

Apparently, directors confident they can turn the company around.

MoSteph:

It all depends on your TIMERFRAME. You analyse according to a 14-day system. My shortest timeframe is the 21-day and according to that the share looks 'interesting' in the short to medium term.

However, since the weighted close already crossed the 21-day MA (buy-signal according to my system)last Friday @0.38 and volume is fizzying out, I am already a bit late for the buying action...but it's never too late... and at this stage I just wait till the priceaction will confirm the 21-day MA in case an up-trend really eventuates.

!!EXIT STRATEGIES!! apply.

Kind Regards

[MoSteph]

Hi Ananda. I have read and enjoy a lot of your posts...
-What's you reasoning for 21 days? Don't you feel you miss the "bounce" in the wait for the trend-line break? I understand the confirmed trendline arguments, but having missed it already??? My experience is that often when the OBV build up like this there’s a small delay before the market reacts (AUZ last week and BKA a few weeks before are examples)

-Any chance of posting your version of the chart?

-Supposing you were in how would you apply "exit strategies"?

thanks
S.

[davidrob]

quote:Originally posted by MoSteph

It really is such a badly worded announcement. Still, if that, and the bad news contained within it, are the grounds for why the value halved, then a further correction will ensue. Somewhere between the hot-air from before the July and the cold-air currently lies the true value. I think those with an eye on BTX are indeed seeing it as an "intrinsically undervalued opportunity".

Davidrob this does put forward the question of what an "extrinsically undervalued opportunity" would be... Could it be that the on-market value is below what it should be? ;)

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Dear Mo Steph,

Would possibly assess an "extrinsic opportunity:" versus an "intrinsic value proposition" ... as being a Stock which is a prime Takeover Target, from an.... EX ternal & "extrinsic" left field predator, perhaps...? ;)

>> On a Slightly more serious note: to really do well with BTX, possibly one needs some quasi "Inside Information" -- as there are quite a few variables.... that are not entirely transparent or easy to discern, at present...

One perhaps .... recalls the Buffett aphorism; about the wisdom of Investing within one's true comfortable Circle of Competence .... ??

But that all said, am still erring, to being favourable to BTX .....

Kindest Regards,

Robbo:)

[ananda77]

MoSteph:
-What's you reasoning for 21 days? Don't you feel you miss the "bounce" in the wait for the trend-line break?

I do not want to be a short-term trader (although that can be a lot of fun...but in general do not like the required mindset -ex n'hop-) trading very short cycles of 14, 5, or even intra-day cycles.

Since I invest in highly volatile stocks, preferably in recovery mode, the 21-day system generated buy-signals together with a 'weighted close' served me well so far in selecting stocks with a good chance of moving into an up-trend.

I understand the confirmed trendline arguments, but having missed it already???

A misunderstanding.
The confirmation in case of BTX is still to come if the market decides to move BTX into a short/medium term up-trend. Chances are that this will happen once the resistance @0.42 is taken out.
'Missed' means that the buy signal generated by the 21-day system (weighted close crossing over the 21-day MA) is too close to the resistance @0.42 for a comfortable, profitable trade...I am better off to just wait if the resistance is taken out -with volume that is- and then make a move.

If the resistance @0.42 is not taken out with volume, the share might move back to the low or even making lower lows.

What makes this share really interesting is the OBV -as you said- and you are right. We just might see some priceaction in the near future...but the resistance needs to be taken out with VOLUME...otherwise just watch it.

<center>http://img.villagephotos.com/p/2004-12/905046/btx2.jpg</center>

[MoSteph]

Thanks for the chart…

I am reluctant to follow moving averages after large price movements as I think they skew clues to the actual demand and pay slightly more head to other indicators. I reckon you're on the button with the 43c entry. But, I chose to enter as soon as the OBV moved strongly; currently with no regrets. I am concerned there may be a few weeks of noise before the breakout.

[ananda77]

Good on you, MoSteph...ExitStrategy: @0.33-ish for you???

Kind Regards

[kura]

Hmm, the more I look, the less I'm inclined to have a speculative punt, initial IPO in 2004 was issued at 25 cents, (price of tin 9,000t, now 7,000t) They have had 2 share placements since IPO due to massive cost overruns in recommissioning Renison Bell mine. Sure, the badly worded announcement has knocked the "blue sky" out of share price, but if they can't sort out their problems, there is a lot more downside to come. What would it take to change my attitude ? Simple, just information, things like
- Est costs (Revised) of commissioning mine,
- Updated earnings projections, for sensitivity analysis type exercise.
And Oh yes, there are some outstanding mining/enviromental consent type issues also.

Think I have to agree with davidrob here, more info needed (preferably inside info) to make a reasonably informed decision.

Good luck to you Mosteph, this is high risk/reward type scenario, my guess is that you have 50/50 chance here, but myself, I would want the odds a bit more in my favour, before putting my balls on the line.

As an aside, it was quite interesting to read about all the historical stuff.

[MoSteph]

Well a few days on and frig all has happened beyond what appears to be a stabilisation of demand: buyer depth demand is growing (not that that says much really). I doubt this will make it down to 35c again.

[MoSteph]

Ananda - you enter then? :) Any chance of you posting that chart again?

Thanks

S.

[MoSteph]

Trading halt... the surprises never end.

Trading halts normally are bad news???... though this seems inconsistent with the OBV and directors’ on market buying spree a month ago.

Thoughts anyone???

[kura]

Price heading south before trading halt, implies bad news to me.

[Moonshine]

Cripes!!

Renison closing.

Sorry to all holders... hope you all got out relatively unscathed.

[winner69]

quote:Originally posted by MoSteph

Well a few days on and frig all has happened beyond what appears to be a stabilisation of demand: buyer depth demand is growing (not that that says much really). I doubt this will make it down to 35c again.

[winner69]

quote:Originally posted by winner69


quote:Originally posted by MoSteph

Well a few days on and frig all has happened beyond what appears to be a stabilisation of demand: buyer depth demand is growing (not that that says much really). I doubt this will make it down to 35c again.



Suppose u wish you never made this call .... or what you called this thread ... seems apprpriate in hindsight

[MoSteph]

Yep... live and learn...lucky my holding is squat

[kura]

Tin price fall closes Renison mine
By Jamie Freed
October 4, 2005

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In what is seen as a major blow to the economy of Tasmania's west coast, plunging tin prices have forced Bluestone Tin to halt production at its historic Renison mine and sack hundreds of workers.

Although commodities such as nickel, copper and iron ore have hit record highs this year, tin has dropped 33 per cent in Australian dollar terms, due to oversupply, since Bluestone issued its prospectus in August 2004.

London tin prices have fallen 27 per cent to $US6555 a tonne, or $US2.97 a pound, in the past 12 months.

Bluestone's shares tanked yesterday on the news, closing 10c lower at 13.5c. They are now trading at nearly half the issue price of 25c and well below the record high of $1.06 achieved last November. Shareholders who bought into two secondary placements at 62c and 65c a share earlier this year are even further out of the money.

The closure of the mine is also bad news for managing director Peter Cook and chairman Peter "Talky" Newton, who each own about 13 per cent of the company and who had sold their Hill 50 and Abelle companies to Harmony Gold in recent years. Both increased their Bluestone shareholdings in August.

Bluestone said it would reopen Renison pending higher tin prices and a revised strategy that would link its other assets in Tasmania's west coast with the mine - but in the meantime the closure will devastate nearby towns such as Zeehan.

A Latrobe University study has estimated the mine had generated 460 jobs and was responsible directly and indirectly for 29 per cent of the region's employment.

"This has been both a heartfelt and commercial decision and is a great setback to the west coast region of Tasmania," Mr Cook said.

Bluestone had spent more than $50 million in the last year reviving Renison, which it bought from administrators in March 2004. At that point, the underground mine was flooded.

The company said in July it was re-evaluating development and operational options for Renison after tin prices had fallen to a one-year low. Some observers took this to mean Bluestone would close the mine but four days later the company issued a clarification noting "there is no current plan to close the Renison mine".

While Renison is closed, Bluestone will focus on its other project, the Collingwood tin project near Cooktown in Queensland.

The Collingwood project remains economically viable despite low tin prices. In a May presentation, the company said operating costs at Renison were $US2.20 a pound, compared to $US1.75 a pound at Collingwood.

Bluestone said yesterday that it expected minor cost overruns of $800,000 on the $14.5 million Collingwood project due to higher labour and material costs facing the entire mining industry.

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