FXR - Fox Resources

[danc]

day week month pointing up,lots of green candles,adx on rise in all,volume under its tail,coming out of a base low,fundies are sound,THE TREND IS UP,go go you good thing.

 

[YOUNG_TRADER]

I topped up today, lots of profit taking + Cu & Ni price drop on LME,

But it did give away alot of gains in 1 day

 

[YOUNG_TRADER]

Trend failure? signalling sideways or down trend?

Or


Consolidation? ? ? ?


I think its consolidation but a lack of buy depth says otherwise


Thoughts? ? ? ? ? ? ? ?

 

[Ann]

Hello Young Trader,

I am not seeing consolidation. I am seeing action but on this chart I am taking a dual view. I can see a bearish Elliot Wave but I can also see a potential Cup and Handle. If it is successful I have added my figures for a potential swing trade outcome.....

Ann

 

[YOUNG_TRADER]

Well from a fundamental point of view, in the next few weeks FXR should get a leg up for 3 reasons

1. New Upgraded mill capacity should be finished by end March allowing for increased Ni + Cu output for its DSO to China (Note the value of these shipments have been steadily increasing

2. West Whundo Cu + Zn mining should commence very shortly allowing the company to cash in on booming Zinc Prices


3. Another shipment of DSO Ni + Cu to China should happen in next 2-4weeks

 

[YOUNG_TRADER]

2 Directors buying, see todays ann

1 Director bought 500k @ 41cents

Other bought 300k @ 41.5cents


You know what they say about directors buying their own company stock(Well I hope you do, cause I don't know the answer )

 

[Ann]

Hi Young Trader,

This tends to indicate the faith of the directors in their company....that is the theory.

.....However sometimes the directors have to buy out a large holder and if the owners didn't buy, a large sell order on the open market could depress the price considerably.

In this instance I feel it could be for the first reason but I am just a mug punter taking a wild guess!!

 

[YOUNG_TRADER]

Hi Young Trader,


In this instance I feel it could be for the first reason but I am just a mug punter taking a wild guess!!

Aren't we all? :bananasmi

 

[YOUNG_TRADER]

Still not sure to make of Fox, in the past after a good rise, it would consolidate allowing its RSI to drop to 50 for a few days before taking off again, however its on the brink of a DT as well,


Ann what do you make of it today?

 

[Ann]

Hi Young Trader,

I am seeing a retrace in the price but not unexpected as it is still in the formation of the 'Handle' phase of the pattern. Whenever I have a coffee I like a decent handle to hang onto, don't you? Got to give it time to form...be patient!

 

[YOUNG_TRADER]

Hmm chart now looks ok don't you think ann?

This week will be interesting to see how chart pans out, could be set for higher level 46c maybe, or trend could still turn (although I doubt or at least hope not lol)

 

[poor]

chart more look like v shape then u shape and right edge is somewhat above the left edge. It could be double top instead of cup handle.

 

[YOUNG_TRADER]

Chart looking good, techies your thoughts?

Ann?

 

[YOUNG_TRADER]

As I'm not a techie/charter (although I do try) FXR's recent price/chart performance has left me a little confused, hence I looked at its fundamentals again,

Fundamentally speaking this company is cashing in on record high Copper Prices and some very high Nickel Prices, very soon it will start cashing in on even more Copper credits and Zinc as well,

Its upgrading its Mill Capacity and it will start mining from Whundo in the next few weeks, so while the next 2weeks is going to be quiet, Come April we should see renewed interest in this un-appreciated Nickel Copper and Zinc producer

 

[Ann]

Hi Young Trader,

There is a lot of selling pressure at these levels from people who caught a falling knife. I think a lot of them are just happy to sell for what they paid. Once it can get over that resistance line its battle may not be so hard but who knows. The resource sector seems to be a bit shaky at the moment and by the look of the longer term view, its fall must have been quite painful for some!

I can't get any clear indication from the chart as yet. The fall today is not out of the ordinary in the life of a handle formation...

 

[poor]

ann,

the fall on the end of april...if you have noticed its right after huge price gap upwords due to a positive new and then a long fall. if you search the groups and see the stories why this happen then u can understand why some ppl are happy to sell for what they paid.

 

[Ann]

Hi Poor,

Welcome to Aussiestocks.

I had a quick look at the notices but nothing really jumped out at me. You seem to know stuff about them how about a bit of info to fill in the gaps?

Thanks
Ann

 

[poor]

Ann, hope below article from my archive explains

The West Australian
June 07, 2005

Matich bales out as Fox dumps ore deal
JOHN PHACEAS

The iron ore ambitions of nickel miner Fox Resources are in tatters, following the shock resignation of founding chief executive Brett Matich and the dumping of Fox's controversial $18 million deal to buy the Cape Lambert iron ore project.

Mr Matich quit during a Fox board meeting on Friday at which millionaire nickel investor Terry Streeter was appointed as a non-executive director. Mr Streeter also agreed to pump $2.5 million into Fox after fellow nickel miner Western Areas, of which Mr Streeter is a major shareholder, pulled out of its earlier deal to buy a 17 per cent stake.

But Mr Streeter's support was conditional on Fox also quitting its foray into iron ore through the Cape Lambert acquisition, which Mr Matich had previously lauded as a "potential company maker".

"I decided that . . . if I was going to make any movement towards a board position at Fox Resources, then I wasn't interested in the iron ore project and was only interested in their nickel which has a lot of potential," Mr Streeter said yesterday.

Investors welcomed the changes, sending Fox shares 6 per cent higher to 35 ¢ and partially recovering the stock's losses since it peaked at 56 ¢ in April amid early enthusiasm for the Cape Lambert deal.

Announced with great fanfare on April 22, the Cape Lambert acquisition was heralded as giving Fox access to an "advanced world-class magnetite iron deposit" only 10km from Rio Tinto's iron ore port.

To acquire the former Robe River Iron asset, Fox agreed to pay $2 million in cash and issue 25 million ordinary shares plus 25 million 75 ¢ options to privately-held Mt Anketell Pty Ltd in a deal then worth over $18 million.

But evidence has since emerged which raises questions about the merits of the deal.

Department of Industry and Resources records show Fox successfully applied for two exploration licences (E47/1211 and E47/1212) over the same Cape Lambert ground in 2002 but withdrew its applications on November 11 last year.

The applications are depicted on a map in Fox's 2004 annual report as the Nickol River prospect, and almost directly overlap the map contained in the April announcement of the deal with Mt Anketell.

Mt Anketell applied for the Cape Lambert ground on October 28 last year - the same day the company was registered - and was subsequently awarded a new licence (EL47/1462) for the area in February.

Mr Streeter yesterday said he was unsure if Mt Anketell's Cape Lambert leases covered the same ground. His sole concern was that Fox should focus on its Radio Hill nickel mine and tene ments near Karratha.

"I'm not sure what tenements they are - all I'm interested in is the Radio Hill, Mount Sholl and Ruth Well (nickel) projects," he said. "There's quite a lot of work to be done there. (But) I think they've got a great future . . . these sorts of nickel systems are quite hard to find."

In a show of support for the company's renewed focus, Mr Streeter agreed to provide a 12 month loan for $1 million paying 8 per cent interest, convertible to 2.86 million shares at 35 ¢ each. He also pledged to pay another $1.5 million for 4.28 million shares at the same price by August.

To implement its strategy after the resignation of Mr Matich, Fox elevated Radio Hill chief Don Harper to the role of managing director. Mr Harper has spearheaded the Radio Hill mine since Fox acquired the project in 2002.

Mr Harper yesterday said the reshaped Fox board did not believe it was wise to pursue Cape Lambert at the current time, and that the iron ore strategy had "really been driven by Brett Matich".

"We as a board just don't feel that it's appropriate at this early stage to pursue that," he said. "We're in a fantastic position being nickel producers in a climbing nickel market.

"We've got the people, we've got the project and now we've got the backing so we have to get really focused on finding some more nickel."

 

[YOUNG_TRADER]

I think it was a good move, Nickel Copper Zinc and Iron ore is just too much,
Not to mention the Cap Ex that would have been required for the Cape Lambert Project,


Anyway it would seem that this battle between Bulls and Bears at the 37-42c price level will come to an end very soon,

I think the company will release an ann very soon updating about New Copper Zinc development + Mill Upgrade (Increased output) + New Shipment of ore to China + Half Year results showing a much improved result due mainly to unhedged sales on record high copper and good nickel prices,

They must be having good cash flows as they paid off their $3m debt and also wacked a few $m into upgrading their plant output mill.

 

[YOUNG_TRADER]

Well Half Year results did show improvement.

rev up 50% and loss down 30% but it was still a loss and although subsequent to balance date they have paid off all debt, cash flows do seem to be thin hence why they must seek finance options for West Whundo.

On the plus side West Whundo is getting go ahead, great Copper Zinc project and unbelievable timing as Both are at near record high levels, and further good zinc grades.

Am a bit confused on what to do with this one.

Ann and others what does chart show?