I really like the way CAP is looking at the moment. I couldn't help myself and even though I already have plenty, I bought a few more shares today. Some of my reasons for buying more:
* Volume and liquidity have been fairly good over the last few months. Stocks that have low volumes of trading can be a negative to some investors. CAP seems to have turned that corner - possibly helped by recent share issues and those that bought in happy to take a 30% plus profit. Whilst sellers keeping price down they are helping trading volumes.
* During the recent capital raising, the share price consistently traded at prices above the capital raising price (as opposed to immediately dropping to the capital raising price and not trading above that), confirming that there is good demand for the shares and demand from new shareholders as existing shareholder wanting more could purchase at lower capital raising price.
*The sell side has started to become thinner and I thought it may become harder to get shares at under 10 cents. At the time of writing, there is only one seller offering 200,000 shares for 10 cents.
* Recent lows in the iron ore price have been around the PFS base of US$63/t for 62%. However, demand and prices are increasing for higher grade ore.
* I get the impression that the iron ore price is starting to rise again (not confident on that, but if it does it will add support and confidence to PFS number).
In respect to prices for higher grade ore, the PFS used US$63/t for 62%, US75/t for 65% and US$88/t for Hawsons supergrade 69%. Important to note that the price difference between 62% and 65% in the PFS was only $12 ($75 minus $63).
Business Insider article today says $65.17/t for 62% and $83.40/t for 65% - the margin for that extra 3% now being $18/t.
Business Insider article from a couple of days ago said "the price performance was mixed with higher grades outperforming lower grades during the session" and rising port inventories are for lower grades.
Links to articles below.
https://www.*.com.au/iron-ore-price-china-steel-cuts-2017-11
https://www.*.com.au/iron-ore-price-2-month-high-2017-11
