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Our MissionTo Provide Uncompromising Investment Research
Important notice! JTVIR provides independent research reports to institutional clients for fixed and subscription fees. JTVIR's affiliate, JTVIO, provides advisory services to entities in connection with financing deals, mergers and acquisitions, mine services, valuations, fairness opinions, strategy, corporate services and capital raising. For its advisory services, JTVIO may be compensated up to a year after the termination of JTVIO's services or advisory agreement. It is JTVIR's policy not to provide research reports or updates to such reports for any entity that has engaged JTVIO's services.
Company ProfileJOHN TUMAZOS VERY INDEPENDENT RESEARCH, LLC (JTVIR LLC) is registered as an investment advisor in the State of NJ. We have 30-odd institutional clients in New York, CT, Massachusetts, California, Wisconsin, Minnesota, North Carolina, and Florida. We do fundamental research on commodities markets and common stocks in the metals and forest products sectors. For example, in the second-half of 2007 we traveled abroad five times to visit mines and smelters, and published 92 investment reports. We collected our first revenue on September 20, made our first email communications seeking revenue September 4 and 10, became registered August 27, filed for registration August 10, formed our LLC on July 6 and "changed course" on June 6, 2007 when the former Prudential Equities Group shut down. We sent reports "developmentally" to our former mailing list from July 8 to August 27, 2007 "not for compensation" while we completed registration and through mid-November in a "grace period" as our clients engaged us.We are regulated like a money manager, but we manage no client funds as our business is to advise active money managers. We are not a broker-dealer, but deliver the same basic research services that we had since 1981 as an employee at major brokerage firms. In our business model we sell our research direct payments and deliver it via email and our www.veryindependentresearch.com web site. Our clients pay us via direct checks, wire transfer, commission sharing agreements or soft dollar payments. Initially we have had no sales force, and our clients learn of us from our existing reputation, existing relationships and "word of mouth." Please click on the "Become a Subscriber Member" button to the left or simply phone or email us if you want to buy our research Special Events webcast link for March 24-25 conference
September 7, 2010
Dear Friend, The attached report with seven detailed demand-supply tables summarizes our copper outlook to 2016. We describe 13 key nations with mine output declines in 2010, 8 large consumer nations with 22% reported first half demand declines due to "under buying" in the face of good GDP growth and estimate up to 4 mmt cumulative supply shortfall to 2014. We expect mine output growth to be small over the balance of 2010, 2011 and 2012. The next 3 1/2 years look very, very good. We are raising our 2011 copper price forecast to $4.25 from $3.50, 2012 to $4.50 from $4.00 and staying at $5.00 in 2013-14 and raising to $4.00 from $3.50 for 2015 onwards. We caution that $7 to $10 copper prices are conceivable if mine mishaps, renewed Chinese buying or a U.S. recovery were to develop.
The most timely buys this week are Teck, Xstrata, Antofagasta PLC, FCX, Mercator Minerals, Duluth Metals, PolyMet Mining and outside of our regular coverage high grade copper deposits at Imperial Metals and Capstone Miningz with zones > 1% copper. We emphasize less strongly this week BHP Billiton, Rio Tinto, Vale and Anglo American owing to 10% to 13% roll backs in fourth-quarter iron ore prices, although their valuations are very discounted . We have Overweight or buy ratings on all the copper/diversified mines we cover (Table 4). We do not write on Ivanhoe Mines, owing to 51% ultimate state ownership in Mongolia, nor the Congo and Zambian companies owing to political risks. There are a couple dozen attractive emerging copper producers with low grade deposits in planning, and their successes depend on permitting, lean control of construction costs, lean control of operating costs, good recoveries and avoidance of dilutive financings.
We have not updated our earnings estimates or price targets for our higher 2011, 2012 and post-2015 copper price estimates. Our prior copper price estimates, price targets and were above the above the market consensus. We will update each of our earnings models individually as we gradually write research reports on each company. In this report we strive to articulate our copper industry position, and present updated detailed models.
Faithfully,
John C. Tumazos, CFA
Contact InformationPlease Contact us with any questions.
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Copyright © 2008 John Tumazos Very Independent Research,
LLC
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