Labrador Iron Mines Holdings Ltd. (LIM-T)

Iron ore has been clobbered in the last year and juniors are almost just looking for M&A activity to bail them out. LIM-T is one of the bigger companies and he would look at it as a hold. It is a little late to bail out.

This is a company that is having all kinds of difficulty. The quality of the iron they are mining has gone down. Recently advised they needed to raise at least $30 million to keep on going. Wouldn’t surprise him if this went bankrupt.

This is an area to avoid. It is too expensive to mine Iron Ore. It doesn’t seem it is likely for them to solve their problems any time soon and they could shut down.

Would like to see a bit more of a basing pattern for the stock. Chart shows it did a V bottom and shot higher. In general, the chart looks quite positive. Broke above its 50 day moving average, which had been in a bit of resistance for the past year. Chart is incredibly optimistic. Materials are generally positive between now and May. The low dollar value does concern him, and you would have to be a risk taker on this.

Such a small mine that they can’t get the cost down to a reasonable amount so they aren’t making any money. Investors are selling.

Attractive one to own of the Iron Ore, but the sector is weak. They will all move at the same time. China’s growth is weak and this is an early mover. But he hopes China won’t have a hard landing.

They are in production now. Because iron ore prices have come off so far and so fast, they are not making money at these levels. There are probably better places to put your money if you want iron ore exposure.

With most of the development names, it is all about infrastructure, which takes a lot of money to get the iron ore out of the country. In this case, they would have to find a well-financed partner as well as the ability for the prices to stay at a level where it is economically viable. Feels that this company is fighting a very uphill battle.

(Market Call Minute.) This is a really long-term play. High cost producer and it needs above $105. If iron ore stays at $105-$110, it is good news for the long-term for this company as it will allow them to increase scale and reduce costs.

Falls low on the radar screen in terms of upside. The Iron ore market is not far from lows. LIM is a high cost producer. They have tight margins. They are periodic shippers. Not the best way in his opinion to play Iron Ore. Doesn’t think TCK.B-T will buy them either, as caller had asked. Prefers TCK.B-T when prices improve. You could look at LIM’s royalty company for the dividend.

One of the problems with iron ore is infrastructure. You have to get it out to market. That really adds to the cost. A railway has to be built to get the product out. That will require a lot of capital.

This is a tough space, because iron ore pricing has been like a yo-yo. You just don’t know what pricing is going to be, so any name in the sector right now is very, very speculative.

Speculative. He holds a very small piece. He is Short on some other names in the sector. The whole group has taken a big hit on the CNR’s announcement that they are not going to build the rail line that would transport some of the ore. If you are not able to short other names in this sector, he would stay away from this one.

Chart shows a long downward slope from early 2011 at $14 down to the current price of $1.47. Starting to show a bit of a rounding pattern at the bottom. Some of the lows are getting higher. It looks like a candidate that may have some upside if the fundamentals continue to be positive.

(Market Call Minute.) The project is expensive. They won’t be doing anything through the winter.