ILU - Iluka Resources

Boggo said:

I had a tight stop on this, breakeven + a bit until the weekly stop moved up to take over.
This mornings opening triggered the alert but it had jumped the stop and the sell price which means I am still in and will probably get stopped out tomorrow arvo on the weekly stop for a loss.

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Follow up. It dipped below my weekly stop ($9.19) this morning but then turned up and stayed above it to the close so although holding around $2k in the red I am still in there

Boggo said:

Follow up. It dipped below my weekly stop ($9.19) this morning but then turned up and stayed above it to the close so although holding around $2k in the red I am still in there

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Hi Boggo,

So is that a +1 then for weekly systems.

rnr said:

Hi Boggo,

So is that a +1 then for weekly systems.

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I'll tell you next week

Iluka will demerge its Mining Area C royalty business following a capital structure review.

The demerger will result in an ASX-listed Australian royalty company with a cornerstone asset of BHP-operated mining area X iron ore operation.

Iluka intends to retain a 15 per cent shareholding in the new company, which will be headquartered in Perth. It will be effected by a distribution of shares in the new company via an in-specie dividend and capital return by Iluka.

Separately, Iluka reported a full year net loss after tax of $300 million, swinging from a $304 million profit last year. The result was hit by a $414 million writedown from Sierra Rutile and the removal of a $162 million deferred tax asset.

Mineral sands revenue dipped 4.1 per cent to $1.19 billion. Loss per share reached 71¢, compared to earnings per share of 71.8¢ year ago. It declared a final dividend of 8¢ a share, down from 19¢ last year.

The mixed market conditions of 2019 are expected to continue into 2020, it said. It expects to produce 280,000 tonnes of zircon, 230,000 tonnes of rutile and 225,000 tonnes of synthetic rutile. Capital expenditure is expected to be $135 million in 2020.

I just flew home from MAC yesterday and I had no idea that ILU had a royalty at MAC..there you go..learn something every day

Sell-side analysts value the royalty at as much as $2 billion – and the shareholders think it could be worth even more given the quality of the counterparty (BHP) and movements in bond yields.

The royalty ensures Iluka 1.232 per cent of Australian denominated revenue from MAC and a one-off payment of $1 million per million tonne increase in annual capacity....

Just had a look at ILU which is not on my radar and Top is indicated for the 21st August so will look to short it at 9.97 if price pulls back to that point .

ILU : 21st August Top in place .

Student of Gann said:

ILU : View attachment 108104 21st August Top in place .

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I personally wouldn't be shorting this chart, Unless i have missed something you could point out ?
The trend line suggests over 80 candles a series of higher lows consolidating in to resistance /support line creating a possible leg up or a pause,
Me personally i'd prefer to see the current chart to go below either the last two points of resistance of $9.50 or $8.90 to show a change in trend,
The last to candles i have circled both forming hammer's, If the candles pointed as a shooting star then maybe a possible change in trend,
Also note a commodity chart in this current run would suggest otherwise,

yes Price exceeded the Cycle High Date . I didnt end up taking this trade which was lucky .

ILU over the last 12 months, now adjusted for the Deterra Royalties Ltd (DRR) demerger - announced Sept, in effect by Nov.



Probably a cleaner company now, and easier to price. With a PE of 46, it ain't cheap,.... gains already priced in for the new RE story (hat tip Mick) that ILU is looking to hitch on.

Recently, ILU said it was looking at "constructing a rare earth refinery at Eneabba in Western Australia", and any move downstream will allow Iluka to capture more of the value chain, and give a boost to its revenue and profit margins.

It has plans to increase sales of rare earths to 9,000 tonnes a year from the second half of 2021. This will be done via the ramp-up of the Eneabba Phase 2 project. The development of the Wimmera project could then take Iluka to 15,000 tonnes a year, or around 10% of the global market share, by 2025 or 2026.

“Notwithstanding the permitting and technical challenges, our analysis shows that if ILU were to expand into downstream refining of monazite into a rare earth oxides, this could increase the value of the Eneabba & Wimmera projects to c. A$1.2bn,” said Goldman Sachs.

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"That equates to a $2.70 a share uplift to the Iluka share price and the broker has upgraded its 2025 earnings per share (EPS) forecast on the stock by 45%. This in turn prompted Goldman to up its price target on the Iluka share price by 22% to $7.20 a share". Goldman also "believes Iluka’s zircon and TiO2 sales will bounce by 20% this year with improving global demand for ceramics and pigment, with a belief that there will be a supply deficit of zircon this year due to falling global supply."

Zircon is supposed to be tending towards short supply.
Mines in OZ - Gingko, Snapper, Gwindinup, Atlas Campape and Wonnerup were all subsumed into Beemax.
One of my old favourites, Bemax, has been subsumed into Cristal Mining, a wholly owned co owned by private interests in Saudi Arabia. Does Josh Freydenberg know about this?

Further to @Dona Ferentes post in January.
Iluka looking to build a rare earths processing plant in W.A, mid way between Geraldton and Perth, at last a bit of onshore value adding. Maybe.

From the article:
A proposal to build the country’s first full-scale rare earths refinery has secured the support of senior Morrison government ministers, as Australia works to position itself as a key supplier of raw ingredients in smartphones, electric cars and wind turbines.

The board of ASX-listed Iluka Resources, a $3.6 billion company, is assessing the feasibility of developing a refinery at Eneabba in Western Australia to process rare earths – a group of elements used in a range of high-tech products and military weapons systems.
If the project proceeds, it would position Iluka as just the second non-Chinese supplier of refined rare earths materials, along with its larger rival Lynas Corp.
Federal Resources Minister Keith Pitt and Trade Minister Dan Tehan, who met with Iluka’s board of directors in March, said the Eneabba project was aligned with the Morrison government’s objective to move Australia further along the rare earths value chain.

“Establishing a domestic rare earths oxide production capability would move Australia further along the rare earths value chain, create regional jobs, capture more economic benefit from Australia’s resources and build security in the global supply of critical minerals,” the two ministers wrote in a letter dated May 10.

25/11/21 8.00am

ILU Financials only rate as GOOD from a scale of VG, Good, Av, Bad, VB.

IV is closer to $6.50 so with SP @ $8.55 it is considered EXPENSIVE atm.

TA suggests it is just above a Support Line of $8.50, LR (pages 139 to 142) is still in a Downtrend, However CCI (pages 108 & 109), and MFI (p 95) both suggest a ST Uptrend.



These are my personal observations, they may be of interest to some punters.
NOTE:- I DO NOT hold ILU atm.
Remember to DYOR.

Cheers.

DrB

Not much discussion on ILU, but that might be about to change.
Up 4% today, probably partly due to this announcement.
From the Australian

The federal government will kick in almost 90 per cent of the direct costs of building Iluka Resources’ $1.2bn rare earths refinery through a low-cost loan, as the mineral sands major confirms its full-blown move into the rare earth market.
Iluka said on Monday its board ticked off on the construction of a $1.2bn refinery in WA, with the federal government to chip in a $1.05bn low-cost loan to help build the plant, which will produce about 17,500 tonnes of rare earth oxides each year.

The project will be Australia’s first domestic rare earth refinery, and Iluka said construction will begin late this year, with first production due in 2025.
The decision is the culmination of Iluka’s long term diversification strategy. Iluka began exporting a rare earth concentrate drawn from tailings at its old Eneabba mineral sands operations in WA in 2020, before expanding those operations to produce a higher grade concentrate in the second phase of the strategy.

The company said the loan from the federal government’s $2bn Critical Minerals Facility would be non-recourse to its own balance sheet, with Iluka planning to set up a separate special purpose subsidiary to build and manage the refinery.

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Finally the government has put money into something that might be useful.
Mick

time will tell

( i hold ILU )

i remember the logic used when LYC chose Malaysia for their plant

ILU has seen on a bit of an uptick since Dec 2021

mullokintyre said:

Finally the government has put money into something that might be useful.

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You're a hard man to please.
Thats an awful lot of money to try and gain a foothold in a market that is totally dominated by China. I realise that it was the only way ILU could make it happen, however, there is a reason Lynas had to go overseas to process their ores.
Lets hope that all permits and approvals pass without a problem and the feedstock used is monazite.

Craton said:

ILU has seen on a bit of an uptick since Dec 2021

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The move ended up stalling right at $12.50, but since the stock is trading at all-time-highs it isn’t profit-taking at a nice round number.

What was interesting was that buyers stepped in to support $ILU right around the previous highs at $11.85, and if it can continue to hold above this level it might be an indication that today’s news could help sustain the uptrend.

Of course, all trading carries risk, and a break below this level might open the possibility for a deeper pullback on further profit taking.

DrBourse said:

25/11/21 8.00am

ILU Financials only rate as GOOD from a scale of VG, Good, Av, Bad, VB.

IV is closer to $6.50 so with SP @ $8.55 it is considered EXPENSIVE atm.

TA suggests it is just above a Support Line of $8.50, LR (pages 139 to 142) is still in a Downtrend, However CCI (pages 108 & 109), and MFI (p 95) both suggest a ST Uptrend.

View attachment 133360

These are my personal observations, they may be of interest to some punters.
NOTE:- I DO NOT hold ILU atm.
Remember to DYOR.

Cheers.

DrB

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The next 3 Trading Days should give a clearer signal on ILU’s next move.

ILU is still trading within it’s IV Range of $8.87 to $13.69 (The grey area on the chart).

There are still Q’s abt the recent Finance Deal – punters may pause till the truth is known – and if they do pause for a while, they may look at the Technicals.

Most ST & LT Inds are rising, the CCI is approaching a SHH (pages 108 & 109), and the LR is approaching the Top of the Sell Zone (pages 139 to 142) The candles for 4/2/22 and 5/4/22 are a worry, as is the Gap Up that it created.

Personally I would require conifirmation TA Signals B4 I act.


Remember that I use FA to Select Securities, Then I Trade them based on TA - I do not trade securities on FA.

ILU’s Debt to Equity atm is Very Low – However - Might jus add a bit more to this post abt “DEBT”.

Basically, the Debt to Equity Ratio (D/E Ratio) is explained as “to express all company liabilities as a % of Shareholders Equity”…..

I should also mention that there are NUMEROUS different ways to calculate the D/E Ratio…

Here are a few of the options:- ….

1. Total Liabilities/Shareholder Equity multiplied by 100 = Ratio %....

2. Interest Bearing Debt/ Shareholder Equity multiplied by 100 = Ratio %....

3. Interest Bearing Debt minus Cash/ Shareholder Equity multiplied by 100 = Ratio %....

4. Shareholder Equity/Long Term Debt multiplied by 100 = Ratio %....

5. Long Term Debt plus Total Equity = Capitalisation THEN That capitalisation Total is used in the final calculation of:- Capitalisation/Long Term Debt multiplied by 100 = Ratio %....

6. Total Liabilities/Net Worth minus Intangible Assets…

7. Financial Debt/ Shareholder Funds minus Intangibles & Preference Capital…

And there are several more ways to calculate a D/E Ratio…

Some Analysts show their D/E Ratio as “Gearing or Leverage Ratios”…



Not sure yet where ILU’s Debt to Equity Ratio will end up.

So, Misinterpreting the D/E Ratio can be fatal to your profits – you may be missing out on a great trade because you used a D/E Ratio that was ridiculously high, when, with the correct calculation is was actually very low…

The bottom line as usual is DYOR…

Find out how your provider calculates their D/E Ratio, and then decide if that calculation is what you need to help in your analysis procedures….

Basically a High Debt/Equity Ratio needs to be investigated before anyone jumps to an incorrect assumption....

Debt can be a problem in some cases, But for some stocks the "Excessive Debt" is Providing Positive Returns to Shareholders....

Remember there is "Good, Productive Debt" But there is also "Bad and Unproductive Debt", the trick is identifying what is OK relative to individual companies....



Say that Debt is helping provide a 2.5% Div Yield,…..Zero Debt they would also probably have a Zero Div Yield - so theoretically a bit more Productive Debt could increase that return substantially - This is where astute directors etc come to the fore - Good Financial Management will make a company greater - Bad Financial Management will send a company broke....

Have you researched the Co Directors and the Financial Team, what is their past record like???....Do they know what they are doing with the current ??% Debt/Equity Ratio???......How much is Short Term Debt, How much is Long Term Debt, What are the Loan Contract Details...are there Roll Over Provisions in the Contracts....What are the Loan % Rates, and are the Rates Competitive, or are they exorbitant????….Look at their Balance Sheet/Financial Position, Do they have money invested that could be used to repay the debts at a minutes notice????…..

What are the Tax Implications with such a High Debt Load, Good or Bad????….

In the current interest rate environment, can higher Debt to Equity ratios be sustained.



Back in the Old Days punters like us only had those mythical % guidelines to help our decision making process - in todays environment we have endless research resources at our fingertips..



The Old Rules like the ones people refer to are just that, "Old Rules".



These are my personal observations, they may be of interest to some punters.
NOTE:- I hold ILU atm.
Remember to DYOR.

Cheers.

DrB