BHP & SA are not looking good atm
- Thread starter BV
- Start date
This is what i call an 'operational headache', not a strategic one.
I cant pass an opinion/view on BHP because i dont know how to value it.
However i can tell you that my strategic valuation if i could do one would be heavily influenced by the fact that they control tier 1 assets (only one of a few globally in the resource sector).
If my intrinsic valuation of BHP was at a certain price and an operational negative such as the above came into play that pushed the price down, i would be a strong buyer.
Why? because operational issues get fixed quickly, strategic problems are much harder to rectify.
Hope this helps.
I cant pass an opinion/view on BHP because i dont know how to value it.
However i can tell you that my strategic valuation if i could do one would be heavily influenced by the fact that they control tier 1 assets (only one of a few globally in the resource sector).
If my intrinsic valuation of BHP was at a certain price and an operational negative such as the above came into play that pushed the price down, i would be a strong buyer.
Why? because operational issues get fixed quickly, strategic problems are much harder to rectify.
Hope this helps.
This operational headache is likely to keep the mine out of action for months.
I don't know what the daily cost is but it would probably be in the millions
Is BHP going to keep the mine?
Is the mines operational life effected by the shutdown?
Do some of the minerals in the mine disappear because of the shutdown?
Will shutting down the mine cause BHP to risk being a 'going concern'?
Will debt holders be in a position to liquidate BHP in the event that the mine shuts down?
Will the cost of repairing the mine have a material impact (ie greater than 5%) on future earnings?
yes to the first question
No to the others
I was hoping for the share price to come down as a result of this accident but I must be the only 1 who noticed...
BHP is up 4.3% in London.
Surely if there was billions involved in this breakdown the trading over there would reflect it..??
See ya's.
Surely if there was billions involved in this breakdown the trading over there would reflect it..??
See ya's.
It happened a week ago, market doesn't care much.
As I said, it won't have much impact on BHP - especially considering the global scale of all their other projects. Just a small blip for a couple months at one of their many mines. When we're talking figures of free cashflow of $18B in the last year, even a few $M a day won't have too much of an impact.
Now if this was Ozminerals and we were talking about their Prominent Hill project having this problem - then it would have a material impact and we may have had the chance to buy on a lapse in stock price.
Investors in Roxby could be hit, with the new land releases and few hundred new houses built in the last year there is now a housing surplus, rents have dropped about 20%. If the mine shuts down for 6 months, it will impact investors that can't find tenants and haven't got a good cash buffer.
Short term pain.
Long term things are still looking good.
Could be some good buying opportunity in the next 6 months.
Wait and see.
Cheers
Graeme
Short term pain.
Long term things are still looking good.
Could be some good buying opportunity in the next 6 months.
Wait and see.
Cheers
Graeme
No. I piled back into the market in early July when that short slump happened. Thinking of selling my banks again. I bought CBA and WBC. Amazing! They seem very expensive again to me. Happy to sit back and see what happens.
See ya's.
