Far East Capital Newsletter
Industrial minerals generally, with two examples
24 Jun 2023

In This Issue

Industrial minerals generally, with two examples

There was no follow through of the bottom-fishing buying we saw in the previous week. Prices continued to fall last week with sellers having to come down to move even small volumes; a typical observation in June. There are many good buys in the market right now but, as usual after a sustained bear market, very few people have funds set aside to take advantage of these prices.

The question becomes which stocks will recover the best. Is it those that have failed to live up to the promotion, or is it those that have a good outlook but still haven't been able to withstand the sellers? The answer should be obvious. We should be acting to improve the quality of our portfolios, moving money from the stocks that are destined to be long term dogs and into those that still have real upside potential. Don't be afraid to take a loss if you find a company that gives you a better chance of recouping these losses.

This week we have general commentary on industrial minerals companies with a particular focus on kaolin. Suvo is a producing company while Andromeda is pre-development. The more advanced and lower risk Suvo is selling at a much lower price tag than the more speculative Andromeda. Once the speculation is removed, will Andromeda continue to sell at high prices? 

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