Extract from annual report:
"Overall, the tungsten raw materials supply outlook could be expected to place downward pressure on concentrate prices, providing increased procurement opportunities for the ATC Ferrotungsten Project and a potential improvement to refining margins."
My highlighting.
This is in line with my earlier post where I thought one of the strengths HAZ has over peers that are pureplay Tungsten miners/concentrators is the fact that HAZ are still in essence only a smelter operation that makes their money on the margin between cost of feedstock and sale price. Therefore, even if Tungsten feed stock supply increases and puts pressure on the Tungsten spot price, the demand for Tungsten will presumably stay the same if not increase. Therefore HAZ sales can increase and their margins and consequently their revenue despite fluctuations in the Tungsten spot price.
At the same time they have the option of developing their Tungsten mines if and when the time is right.
Yes they mention a capital raising, but I see that more as a corporate governance requirement. HAZ has stated before that they want to develop their vertical integration preferably off balance sheet.
So hopefully all still on track to go into profit 4th quarter and first quarter of 2015!
HAZ Price at posting:
3.0¢ Sentiment: Buy Disclosure: Held
