3SOF

ROY technical & fundamental analysis:




ROY attracts me especially because of three factors:

1) The chart is bullish
2) Revenue growth is very strong, because of two forces: rising global commodity prices and rise in "production"
3) Extremely fat and expanding net profit margin

The trading plan is:

Buy ROY, 6.66% of capital, as always.

Yahoo says earnings release today.  Should you wait?

International Royalty Corp. (ROY, $8.09, $0.34, 4.4%) posted a 1Q profit of 3 cents a share versus a loss of 3 cents a year earlier. Revenue rose to $10.2M from $413,000 on higher revenue from the Voisey's Bay royalty.


  (END) Dow Jones Newswires

  May 15, 2007 14:00 ET (18:00 GMT)

  Copyright (c) 2007 Dow Jones & Company, Inc.- - 02 00 PM EDT 05-15-07   Earnings yesterday it seems.

Quote from: buddjas1 on May 16, 2007, 08:44:39 AM
Yahoo says earnings release today.  Should you wait?

They were released yesterday before the market close buddjas1, look here:

http://www.sec.gov/Archives/edgar/data/1362734/000117625607000309/ircform6kq1mar07.htm

I'll buy around the open.

Traded ROY a dollar ago based on its technicals. Didn't really find its fundamentals all that attractive (and still don't).

What makes it even harder to guess is that there's no coverage whatsoever on the stock. That 3-cent per share number doesn't particularly turn me on. But one can definitely argue that materials will continue to be pricey and they will have good revenue growth.

Ram

*DJ Intl Royalty Raised To Outperf From Sector Perf: Haywood>IRC.T

.

  (END) Dow Jones Newswires

  May 16, 2007 10:04 ET (14:04 GMT)

  Copyright (c) 2007 Dow Jones & Company, Inc.- - 10 04 AM EDT 05-16-07                                         Doesn't seemed to be having the desired effect as of now.

"International Royalty announces acquisition of Limpopo PGM Royalties
9:53a ET May 15, 2007 (PR NewsWire)

International Royalty Corporation (AMEX: ROY, TSX: IRC) (the "Company"or "IRC") reports that it has entered into a letter of intent with a private entity to acquire two platinum-palladium royalties in South Africa, subject to satisfactory due diligence and regulatory approval. The total acquisition cost is US$13.0 million and the transaction is expected to close within the next several weeks.

Both royalties apply to Lonmin Plc's Limpopo PGM project located on the east limb of the Bushveld layered mafic intrusion complex, and comprising ores found in the Merensky and UG2 reefs. The first royalty, a 0.704% gross sales royalty applies to the currently producing Phase I project which is forecast to produce between 46,000 and 50,000 ounces of saleable platinum plus an estimated 50,000 ounces of other PGMs (palladium, rhodium, ruthenium and iridium) during 2007 with a planned ramp-up in 2008-2009 to approximately 72,000 ounces of saleable platinum plus additional associated PGMs per year. The second royalty, a 0.704% to 1.00% gross sales royalty applies to the Phase II expansion of the Limpopo operation for which Lonmin recently announced (in a release dated May 2, 2007) it has received a positive pre-feasibility report. Phase II is expected to add a further 113,000 platinum ounces plus associated PGMs when the mine operates at a steady state. Total capital costs for the expansion are currently estimated to be US$350 million. As a roylaty holder IRC will not have to contribute to this expenditure. A 2011 commissioning of the expansion is expected, with a mine life of at least 15 years. These royalties are expected to provide immediate revenues to IRC and will extend across the overall life of the Limpopo operation anticipated to be in excess of 20 years.

On the basis of a US$900 per ounce platinum price, the Phase I royalty is expected to pay approximately US$1.0 million per year and the Phase II royalty is expected to generate an additional US$1.5 million per year.

The Limpopo royalties are expected to complement IRC's existing PGM royalties on Barrick Gold Corporation's ("Barrick") advanced-stage Federova (Pana) open-pit platinum-palladium project in Russia which IRC acquired as part of the BHP Billiton ("BHP") royalty portfolio transaction in February 2005. Barrick has announced (Barrick Gold Coporation press release, February 22, 2007) that the project has "platinum measured and indicated mineral resources of 6.5 million ounces and inferred resource of 0.6 million ounces and palladium measured and indicated resource of 2.1 million ounces and inferred resource of 2.6 million ounces (100% basis)." "In 2007, Barrick plans to spend approximately $30 million for drilling and completion of a pre-feasibility study for this large near-surface deposit."

IRC holds two royalties on the Federova project. The first royalty is based on 0.75% of gold and silver and 1.0% of PGM, nickel and copper net returns. The second royalty is based on 0.50% of the net returns. IRC has an option to purchase athird royalty after commencement of commercial production. All royalties are payable on all commercial production after capital repayment."
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If I understand correctly, the 2 things I like are;
"As a roylaty holder IRC will not have to contribute to this expenditure."

and the second statement,
"These royalties are expected to provide immediate revenues to IRC"
does this mean 2007 or 2011?


I bought today. 
But I am overlooking this small technical breakdown.
Happy trading everyone.

I say we'll see 7.25 before we see 10.

Here's a chart from a few days ago.....looks like support from prev resist at 7.18 and support from uptrend line about 7.25.  I will buy at 7.25 and then wait and see.

I see the 20 DMA at 7.28 EOD on Wed., so I think 7.25 looks good for support

http://usera.imagecave.com/madtig/MyCharts/ROY5-10.gif

ROY has about 60 royalties:



I want to know them all over the upcoming updates.

$9,705,000 of the $10,178,000 Q1 revenue came from the Voisey's Bay mine royalty, specifically from Nickel, Copper and Cobalt mining:



The company's guidance for the full year 2007 is the following:



We can see that the revenue estimate is heavily dependent on the market prices of nickel, copper and cobalt. The company assumes $15 per pound of nickel, $2.5 per pound of copper and $15 per pound of cobalt.

I believe I can derive a simple model to know how the company's revenue estimate will be impacted by changes in the metal prices at any given day. For that I need a good source for the market prices of these three metals. I'll look for them for the next updates, but for example, the following charts show nickel at $24.58 (estimate is based on $15) and copper at $3.52 (estimate is based on $2.5):



At the current moment and for the full year of 2007 Nickel is the biggest contributor to ROY's revenues, and Q1 revenue was obtained with Nickel at $16.59 per pound. But Nickel is now trading at $24.58, that is, 48% more than in Q1 2007 and about 64% more than the company's estimate for the full year of 2007.

So, if everything stays basically the same until the end of the year with metal prices, no doubt ROY will have much higher revenues than their guidance.

Technically the stock may come down to retest the ascending trendline, today at $7.23, but it can also rebound and make a bullish breakout (fundamentals tell me that should be the outcome). I'll keep holding ROY.

Well ROY got down there very quickly. snagged some at $7.15. Lets hope it rebounds now.

Quote from: BigSully1 on May 17, 2007, 10:21:16 AM
Well ROY got down there very quickly. snagged some at $7.15. Lets hope it rebounds now.

The quicker the better, nice catch at a double support zone.

Nice catch BigSully. I'm in at 7.20 we shall see.

Quote from: BigSully1 on May 17, 2007, 10:21:16 AM
Well ROY got down there very quickly. snagged some at $7.15. Lets hope it rebounds now.

Wow, it sure did; I was not prepared.  I'm in @ 7.35.

Cheers,

Thanks guys, but my other purchases here weren't as prime.

Whew! I very nearly sold after failing to hold above $7.17 the second time. Those that had  the cajones might have might have picked up a great buy at $7.01 to $7.05... at least I hope so.