Tuesday, January 5, 2010
Thompson Creek Joins The Eureka Grubstake for 2010
It is 6:32 AM, grab a cup and checkout what the Colonel has in the shop this morning. Last May the Report started the Eureka Miner's Grubstake Portfolio to track 10 stocks of companies that directly or indirectly benefit Eureka County plus a gold and silver Exchange Traded Fund (ETF). We invested one million dollars and the readers (yup, that's you) made $274,064.67 as the books closed for 2009. A 27.4% return on your money isn't bad in a year that saw the S&P 500 fall off a cliff in March. If the Grubstake is a local barometer for times to come, last year's performance should bode well for Eureka's future.
One of the sacred laws of repair is, "If it works don't mess with it." OK, so why the heck is the Colonel retooling the Grubstake for 2010? Now that we're in the shop, I think you'll see why. I've unbolted Nucor Corp. (NUE), a domestic steel maker, from the main frame and welded in a bright and shiny Thompson Creek Metals (TC) right next to the General Moly (GMO) transmission mount...oh, you're confused?
Let's look at this rig another way. The top six Grubstake performers for 2009 in terms of stock performance since May were (best, first):
ArcelorMittal ADS (MT) up 59.4%
Freeport-McMoran Copper & Gold Inc. (FCX) up 55.0%
POSCO ADS (PKX) up 47.3%
Caterpillar Inc. (CAT) up 43.8%
EOG Resources Inc. up 26.6%
iShares Silver Trust ETF (SLV) up 19.9%
And the bottom six (worst, first):
Nucor Corp. (NUE) up 7.0%
Newmont Mining Corp. (NEM) up 8.1%
ConoccoPhilips (COP) up 8.9%
General Moly (GMO) up 13.0%
Barrick Cold Corp. (ABX) up 15.7%
SPDR Gold Trust ETF (GLD) up 19.3%
OK, Nucor was the poorest performer and the two international steelmakers, ArcelorMittal and POSCO, were in the top three. The latter two are important because they invest in our General Moly (POSCO has a 20% share in the Eureka Moly Mt. Hope Project). Thompson Creek is a pure play moly producer that we've been looking at for sometime to unravel the mysteries of molybdenum prices (Good Golly Miss Moly, Molybdenum on CNBC News, POSCO & Miss Molly Go Dancing). It seems to me that the Grubstake will gain more from tracking Thompson Creek than Nucor even though domestic steel is important to the overall moly story. Make sense?
Let's take this baby for a spin buckaroos and make some money in 2010!
Enough tinkering with stuff that works, let's walk the walk:
4-WD is OFF - the VIX or "fear index" remains below 25; smoother road market conditions expected to continue (what's this?)
Yellow light is ON for our fuel gauge with oil above $80
Yellow light is ON for possible adverse regulation/legislation: Cortez Hills & mercury emissions
Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)
Oil is down $0.05 in early trading to $81.46 (February contract, most active); Gold is up $1.0 to $1119.3 (February contract, most active); Silver is up $0.082 to $17.545 (March contract); Copper is down $0.0135 to $3.3925 (March contract); Molybdenum is steady at $12.50.
The DOW is down 23.43 points to 10560.53; the S&P 500 is up 1.24 points to 1134.23. The miners are happy:
Barrick (ABX) $40.99 up 1.49%
Newmont (NEM) $48.98 up 1.09%
General Moly (Eureka Moly, LLC) (GMO) $2.42 up 5.46%
Thompson Creek (TC) $12.80 up 2.81%
Freeport McMoran (FCX) $84.40 up 1.13% (a bellwether mining stock spanning gold, copper & molybdenum)
The Steels are down a tad, (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $47.76 down 0.58% - global steel producer
POSCO (PKX) $135.53 down 0.14% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is up 1.2% to $1,335,720.75 (what is this?).
Headline Photograph by Mariana Titus