Crusader Resources (CAS)

Discussion in 'Stocks & Derivatives' started by SilverSanchez, Sep 7, 2012.

  1. MyNamesNotBen

    MyNamesNotBen New Member

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    I had one of the old "SilverSanchez stink bids" in at .335 and a little bit of it got filled today. haha wow. I don't know how i feel about this
     
  2. MyNamesNotBen

    MyNamesNotBen New Member

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    My order got filled so no more capital left to buy shares. CAS keeps dropping.. Stressful days. The good news is we have cash flow from posse that can keep the company going and we have the cash on hand to repay the $5m in debt. So the share price may go lower but the company will be fine. Drilling results from the new gold project due in a few weeks, could be good or bad. Still no word on posse stage 2 :'(
     
  3. finicky

    finicky Well-Known Member Silver Stacker

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    There's a charting pattern idea of a 'double top' that can be too readily or over applied. I think without researching it that a double top is meant to be reserved for substantial tops not short term situations. Nonetheless a share price that has failed near or at a previous high gets me skeptical.
    If this were mine I'd be selling on any bounce as my forced guess would be revisitation of old lows. This because of the rate of descent and no respect for the level of the inbetween trough
     
  4. MyNamesNotBen

    MyNamesNotBen New Member

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    Turtle :(.

    Finicky, the problem with TA on this stock is just the total lack of volume. Like there is only ~60k shares listed to be sold up to .35 so not that many people selling at these levels. So when one person with 100k+ shares REALLY wants out they have to sell to the buyers and the price goes down by a few cents.. Once that happens all the other buyers lower their order prices and the share price stays down. I wouldn't take the current low too seriously because of that lack of volume. If you desperately wanted to acquire 100k shares today you would have to drive the price up to .36. You know what I mean? It's like the low isn't even happening. The SP is .28 but there is a buyer at .29. Also IMO a revisitation of the old low (18c) seems unlikely as a lot has changed since then (for the better):

    Off the top of my head:

    Then: ~120 mil shares on issue. $5mil debt. Bugger all cash. Iron ore production capped at 300k tonnes P/A (or not producing at all; can't remember). Borborena gold project not even being mentioned as gold was at its low and no one wanted to know about it. I/O price was higher but was going down at the time.

    Now: ~140 mil shares on issue. IMF backing the company. Some other mob being paid with options to promote the company (80c strike price). ~7 mil cash in bank. ~4.5 mil debt. Full mining license granted for posse iron ore. Acquisition of Jureuena gold project (absolute bargain). BFS under way for borborema. Extensive drilling underway at juruena (let's find out what we actually bought lol). Drilling at Posse with initial results promising. Strengthened management. Selling I/O for over $70 a tonne. Overall, even with all the exploration, drilling and admin expenses etc the company is cashflow positive just from the small production at posse. Stockpile of fines at Posse, waiting on plant upgrade. Copulous has acquired 19.99% of the company; even buying some shares at the .40c mark.
     
  5. finicky

    finicky Well-Known Member Silver Stacker

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    blah blah blah not Ben, chart cuts through.
    Intellectually, ever your friend, finicky
     
  6. MyNamesNotBen

    MyNamesNotBen New Member

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  7. finicky

    finicky Well-Known Member Silver Stacker

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    No worries, was engaged in a tipple.
    [​IMG]

    However for mine i'm done trying to understand small resource companies. I was always using info and projectionsthat came from them or their bought analysts anyway.
    I'll try to make sense of fundamentals when there are past earning figures to use, otherwise its charts.
     
  8. MyNamesNotBen

    MyNamesNotBen New Member

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    I bought some today at .20 Its painful I'm down nearly $10k but im still confident over the long term. Last quarter we made a $1mil loss overall; however posse profited $2.5million. The lump is being produced for ~$12 a tonne. There are some minor plant upgrades being done to increase production of lump. Not sure how much production will increase by nor how long production will be affected (if at all). The dry refining process for the fines is not feasible with iron ore <$100 however other options are being looked into and we are awaiting results this quarter in regards to leasing a processing plant. Recent drilling is promising and it looks like we have a few years of production worth of lump product to keep us going. CAS may need to wind down with the drilling and exploration of the gold deposits $6mil cash on hand won't last long if we continue making losses. We will have to wait and see i guess :/ It would be nice if management let us know a bit more about what is going on...
     
  9. finicky

    finicky Well-Known Member Silver Stacker

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    lol, where have I heard that before? It's not in their weasely interest to let you know what's going on if it's going badly. They want you to hold your shares and buy more to keep the share price up so they can sell as insiders or mount another rights or SPP issue. Never forget these companies are really 'owned' by management - you're just a tool. That's why these things were constructed - to gather wealth for management while tranferring all risk to you. Usually that wealth is a pure conversion of your funds into managements' 6 figure fees and salaries.

    Do not average down in this sort of company

    By "this sort of company" I mean juniour/minnow resource companies not yet profitable, let alone consistently profitable, where you are relying mostly on what the company has told you for intelligence. Them or vested interest analysts or chat-room commentators. These companies by and large are garbage and non investable. You are investing because you are not cutting losses or buying dips and selling peaks. You're accumulating and compounding the error and pain if it turns out badly. Think of your psychology - you're trying to make yourself feel better by lowering your average cost.

    I'm not predicting yet, but this could halve again and go sub 10c.
     
  10. Stackman

    Stackman Member Silver Stacker

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    Ouch, finicky - that's harsh ! :p

    NotBen, where are you getting your info from ? I haven't seen any recent market releases from CAS.
     
  11. MyNamesNotBen

    MyNamesNotBen New Member

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    Quarterly cash-flow report and quarterly activities report. I just had another quick read of the reports and it looks like CAS will make a loss of around $600k this quarter.

    Finicky is right about these companies. Just look at what happened with CCU. MRP ACB and CTM are more like the type of companies finicky is warning about though. They have large deposits and use these to milk shareholders so management can pay themselves $100k+ salaries. The deposits will probably never be mined :(. I think CAS is different however because we have cash flow from posse now to keep us going. Management seem against capital raising. They only make institutional placements when they have to and not very large ones when they do. The IMF placement allowed them to buy Juruena and also having the IMF on board may help the company going forward; I'm not sure how though. Perhaps it will give them the upper hand when dealing with the Brazilian government in regards to developing their gold deposits (if that ever happens lol). CAS only has 140mil shares on issue for a reason. Now posse is producing it also shows that management CAN do it. $250,000 in total was paid to the directors/management last quarter. I think that is reasonable considering what is being achieved.

    http://www.aspectfinancial.com.au/d...Jyb3JwYWdlcy9wZGZkZWxheWVkLmpzcA==&popup=true
     
  12. SilverSanchez

    SilverSanchez Active Member

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    Posse was for the soul purpose of financing drilling and exploration of the gold deposits. im more worried about the dilution.
    They arnt an iron ore miner - they are a gold developer/explorer..... the iron ore just 'pays the bills'. Increasing production via the processing plant lease will help.

    posse costs $1 to make $1.80 - net profit 0.80c per dollar spent.
    but posse isn't isolated - out of that 80c profit must come wages, exploration, tenement lease costs etc. its not management - that's just a gross over simplification - they own 24% of the company

    Also the options cost to be transerred into ordinary shares (as im sure you know) - the purchase of land leases increased the companies total equity and therefore there was an increase in the total shares issued.... look back and find out how much the ifc payed for the shares, it was 29c and their options were issued at exercise price of 0.41c.... they must have thought that was a good deal.

    Now no exploring means A DEAD DUCK!!
    They need to explore, as long as posse makes positive cash flow, although the company makes a net loss overall - as long as they are drilling and exploring, and maybe expanding posse - im ok with it.
     
  13. SilverSanchez

    SilverSanchez Active Member

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    I should add that I expect a volatility of about 30-50% from here.

    We have two reasons an investor may be long Crusader
    1. Iron Ore production
    2. Gold exploration and development

    When it gets down very low - you may have some people investing some spec money expecting a buyer for the company to step in when Market Cap goes below EV by 10% or more - we're at parody now (this precludes a write-down of asset value).

    Currently the price is tracking more with Iron Ore than Gold, but in a gold capitulation those invested in gold developers will probably sell.
    What is the signs of a capitulation in gold?
    - Producers start hedging production (already a tick)
    - Investors give up and the liquidity dries up for the stocks
    - Management and Directors of gold companies quit (starting to occur)
    - Mines go on care and maintenance (starting to occur)
    - Explorers give in and finance at rock bottom prices (beginning)
    - Companies sell their gold tenaments and change focus to another area
    - Mergers and acquisitions - overall consolidation of companies focusing investor money into fewer companies (I think EVN will be a big beneficiary here but not the only ones)

    We are starting to see this but not on a scale that you would expect. There is too much hope in the sector, a lower gold price will fix that (lets say $900 USD). We have to come to terms with the fact that CAS could be bought out - and hopefully we all at least break even if that happens.

    Iron Ore capitulation is big issue for CAS as well (same as above) - so iron ore could go down to $60 - but I think that would be a floor and trade sideways to up from there. So posse will still be making money (all be it less profit) but the company will be able to pay SOME bills with that profit - but probably not all.

    So any potential buyer - know the risk! Im holding and will continue to hold.
     
  14. MyNamesNotBen

    MyNamesNotBen New Member

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    This too shall pass ..
     
  15. SilverSanchez

    SilverSanchez Active Member

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    Lol!! Time to take up drinkin'.... if I could afford it ;)
     
  16. finicky

    finicky Well-Known Member Silver Stacker

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    Quite Liking the chart on a dly and wkly basis; nothing to speak of yet monthly.
    No trend established yet obviously, and has not moved outside any reasonably drawn downtrend resistance 'rail'
    Another caveat is the unexceptional volume - not a scene of frenzied buying. Probably NotBen responsible for half the volume and ramping it here on this highly active and influential stocks sub forum. Have some decency mate.
     
  17. phrenzy

    phrenzy In Memoriam - July 2017 Silver Stacker

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    I grabbed a bit of cas but I split my investment over a few others too. I'm a little annoyed I missed out on DRM when commsec put out a recommendation on it it went up line 6% in one day. Their new gold is producing at line $775aud/oz. Wish I had gotten on that at the start of the day instead of after the mom and pop rush.
     
  18. MyNamesNotBen

    MyNamesNotBen New Member

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    Crusader is going to be the next BHP. I'm just letting people know so they don't miss out ;)
     
  19. SilverSanchez

    SilverSanchez Active Member

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    hehe, it would be nice but I don't think so. Less than 1% of companies become a BHPesk company and they usually don't do it but by going through various changes from the original company/ies. I want to see a far more consistency of the drill results. This company is far more likely to be bought out or merged into a new entity. There is some great upside potential and im glad I own some shares, but lets not get too far ahead of ourselves.
    They have one operating mine. The rest is just fluff at the moment, lets see if the fluff can be converted to mining assets operating at a profit.
     
  20. SilverSanchez

    SilverSanchez Active Member

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    This stock wont 'bottom' until gold and iron do, I usto think undervalued is always a buy - but then realised the trend of the material is the penultimate decider. This is why good materials companies become undervalued, because they are basically a leverage play on the underlying commodity. 15% down at the moment because the liquidity is thin. Good for trading (but difficult), heart wrenching for buy and hold.
     

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