I took my FOM call profit and bought more $1 Jan2024 and Feb2024 WWR calls today than was reasonable. It felt so right to do something so wrong.

Estimated Pre-tax NPV of $229 Million and Pre-tax IRR of 26.7%


Coosa is the Largest, Most Advanced Graphite Deposit in the Contiguous U.S.


CENTENNIAL, Colo.--(BUSINESS WIRE)--
Wes****er Resources, Inc. ("Wes****er" or the "Company") (NYSE American: WWR), an energy technology and battery-grade natural graphite development company, today announced the availability of an Initial Assessment, with an economic analysis ("IA"), for the Company's Coosa Graphite Deposit located in Coosa County, Alabama (the "Coosa Deposit").


Frank Bakker, President and Chief Executive Officer of Wes****er, stated "The Coosa Deposit is an important asset, not only to Wes****er, but we believe a critical asset to the future domestic graphite supply chain. We believe that our Coosa Deposit is the largest and most advanced natural graphite deposit in the lower 48 states. With estimated pre-tax NPV of $229 million, estimated pre-tax internal rate of return of 26.7%, and estimated free cash flow of $714 million, the Coosa Deposit continues to be an attractive asset for Wes****er and its stockholders."


"The IA was based on drilling results from less than 10% of the Coosa Deposit acreage and did not consider any potential benefit from vanadium previously discovered, resulting in an estimated pre-tax NPV that is 6x greater than the market cap of Wes****er as of December 12, 2023," concluded Mr. Bakker. "We believe there is the potential for additional value creation at the Coosa Deposit through expansion to supply Wes****er's graphite concentrate needs for many years as well as the broader North American graphite industry that is under development. Wes****er has begun a process to seek strategic investments to explore, develop, and unlock the potential additional value at the Coosa Deposit," stated Mr. Bakker.


The IA was completed as a Technical Report Summary ("TRS"), disclosing Mineral Resources, including an economic analysis, for the Coosa Deposit, in accordance with SK-1300. The TRS was completed on behalf of Wes****er by SLR International Corporation ("SLR") with an effective date of December 11, 2023, and filed by Wes****er on Form 8-K with the Securities and Exchange Commission ("SEC") on December 13, 2023. SLR qualifies as a Qualified Person as defined under Item 1302 of Regulation S-K.

reineraggie09 said:

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Excuse me for my ignorance, but I am here to learn.

How can the project have a NPV of 229M and FCF of 700+m? Is the FCF figure just an addition of all CF amounts without any discounting? I am just trying to understand.

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Yes, the FCF is likely a compounded collection of the cashflow.

If I take the $229M and put it over 11 years in a DCF calculation, you'd assume 10.30% rate of return to get to the $700M FCF.

So if I adjust my calc to 15 years and the discount rate at 8% you can get there, which seems alot more likely.

But it is also a heavy chance of inflated value to have these figures, but maybe we are missing some unknown (which is extremely likely)

Edit: Did not see the 26.7% IRR, which takes my above calculation to 5 years.....

Thanks Red Pear. I always learn from your posts!

So....is that good??

Wall Street has discovered what's really driving U.S. stocks higher in 2023. - MarketWatch

Quote:

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That while the Fed has been paring back the size of its balance sheet, beneath the surface, central banks have boosted support for markets by allowing bank reserves to expand, increasing the amount of capital available to be deployed into markets and the economy.

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Quote:

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The fact that the Fed has reduced its bondholdings to $7.8 trillion, from $9 trillion at its peak last year, isn't what investors should be focusing on.

Instead of the Fed's shrinking balance sheet, what really matters is how reserves in the U.S. banking system have increased by $500 billion since January, according to King.

The Fed isn't alone in this. Instead of withdrawing $1 trillion in liquidity after declaring war on inflation in 2022, the world's biggest central banks instead injected roughly an equivalent amount, King's research shows.

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Quote:

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"The first 10 days of December continued the recent trends of expanding U.S. liquidity, driven by draws from the RRP facility and the Treasury General Account," said a team of cross-asset analysts at Goldman Sachs in a recent report obtained by MarketWatch.

"Together with the lagged-behind effects from the U.S. policy impulse easing in the aftermath of the regional-bank funding pressures earlier in the year, the high liquidity should support risk-asset performance and tight credit spreads into year-end," the Goldman team added.

By Goldman's count, banking reserves expanded by roughly $50 billion on net during the first week of December alone.

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Quote:

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"There is a reason why QE is so powerful," King said. "QE creates new money in the form of reserves, but not only that, it withdraws bonds and bills from the market, so the private sector then has more money, and fewer places to invest that money."

"When reserves change, that alters the balance between how much money private investors have got, and the amount of securities available to invest in," he said.

"When you give investors less money, and more securities to invest in, then we see prices go down. Reserves were coming down in 2022 when everything was selling off. But this year, that has stopped."

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Funny how this didn't get mentioned at FOMC. This is a ticking timebomb. The entire rally from March until present is 100% QE driven. It's just not the QE on the surface. It's the ticking timebomb under the hood.

Heineken-Ashi said:

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Wall Street has discovered what's really driving U.S. stocks higher in 2023. - MarketWatch

Quote:

---

That while the Fed has been paring back the size of its balance sheet, beneath the surface, central banks have boosted support for markets by allowing bank reserves to expand, increasing the amount of capital available to be deployed into markets and the economy.

---

Quote:

---

The fact that the Fed has reduced its bondholdings to $7.8 trillion, from $9 trillion at its peak last year, isn't what investors should be focusing on.

Instead of the Fed's shrinking balance sheet, what really matters is how reserves in the U.S. banking system have increased by $500 billion since January, according to King.

The Fed isn't alone in this. Instead of withdrawing $1 trillion in liquidity after declaring war on inflation in 2022, the world's biggest central banks instead injected roughly an equivalent amount, King's research shows.

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Quote:

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"The first 10 days of December continued the recent trends of expanding U.S. liquidity, driven by draws from the RRP facility and the Treasury General Account," said a team of cross-asset analysts at Goldman Sachs in a recent report obtained by MarketWatch.

"Together with the lagged-behind effects from the U.S. policy impulse easing in the aftermath of the regional-bank funding pressures earlier in the year, the high liquidity should support risk-asset performance and tight credit spreads into year-end," the Goldman team added.

By Goldman's count, banking reserves expanded by roughly $50 billion on net during the first week of December alone.

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Quote:

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"There is a reason why QE is so powerful," King said. "QE creates new money in the form of reserves, but not only that, it withdraws bonds and bills from the market, so the private sector then has more money, and fewer places to invest that money."

"When reserves change, that alters the balance between how much money private investors have got, and the amount of securities available to invest in," he said.

"When you give investors less money, and more securities to invest in, then we see prices go down. Reserves were coming down in 2022 when everything was selling off. But this year, that has stopped."

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Funny how this didn't get mentioned at FOMC. This is a ticking timebomb. The entire rally from March until present is 100% QE driven. It's just not the QE on the surface. It's the ticking timebomb under the hood.

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This makes me wonder if it's related to the feds rate cut forecast? Do they know this as well and are prepared to add more QE to the system to try and shore up the gaps and limp this thing along until after the election?

VIX 30+ on or near 11/5/24

where is txaggieacct85 to tell us to unload?

The sad part is everyone that was paying attention knew this is what was happening. And why wouldn't they, when it is politically beneficial to show a strong economy just before an election, rather than the pile of dog excrement that it is?

So we get a pile of dog excrement covered in a thin layer of frosting. But it's that good buttery frosting that everyone loves so the media can focus on the wonderful frosting we all get to eat and feed to the next generations.

EnronAg said:

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VIX 30+ on or near 11/5/24

where is txaggieacct85 to tell us to unload?

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While I'm not txaggieacct85 to tell you to unload, I am definitely trimming some things back (covered calls that I'm not going to roll).

I'm getting up to a more sizeable cash position now and waiting for the rug to pull at some point to hop back in. Trying to exercise patience (4.9% on the fidelity cash account helps at least!)

aggiebrad94 said:

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Heineken-Ashi said:

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aggiebrad94 said:

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EngrAg14 said:

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Market should be expecting the 1/4 rate increase that should be announced tomorrow correct?
Haven't seen rumblings of a 1/2 %, and if they hold again then the market booms.

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Markets are predicting no more hikes at a 98% probability.

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Markets react to what's behind them. They do not predict anything. Markets have been predicting no more rate increases for a year now. Markets predicted rates going down starting end of this year. Markets predicted 2023 at new lows, not almost back to ATH. Though markets might try to forecast future growth, they will pivot on a dime, sometimes on no news and at unpredictable times.

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You are not correct.

https://www.forbes.com/sites/simonmoore/2023/12/05/markets-see-spring-2024-interest-rate-cuts-but-the-fed-isnt-there-yet/?sh=370b21cc20fc

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If the market was predictive rates would have dropped in 2023. Right one time and wrong a bunch others is nothing more than blind squirrel material. Markets are not omniscient.

And if the market was so predictive, why did equities wait until yesterday's Fed announcement to shoot up even higher? Seems awfully reactive to not have priced in the move.

What we have is a FED liquidity fueled bond market driving rates down, not genies.

On the flip side, the bond market does lead the FED. Not because it's predictive, but because the FED lets the bond market tell it what to do. J Powell admitted as such yesterday when he stated that the bond market might be doing their work for them. And remember "transitory"? Only until the FED fell so far behind that they had no choice but to start raising. But does it lead because they KNOW what the FED will do? No. The market is operating in real time. The FED follows.