Whats your strategy for mining towns of WA?

Hi everyone

Is anyone investing in mining towns in WA?
Do you think it's hot the bottom of the market?
If buying how much (%) do you shave off on your offers to buy?

What if new mines have just been discovered with about an 8 year life span?

 

Wouldn't touch any of 'em with a barge pole. (It's worth noting however that I am highly risk averse.)

Why on earth would you buy where a new mine with a life span of only 8 years has been discovered? Unless there's opportunity for something else (eg. a great natural port, etc) then how much infrastructure do you think will be put in for the eight years? This is exactly the scenario that FIFO is designed for.

 

I do not have one, but if I did, buy when down & make sure not relying on the income to be able to hold.

 

ditto

 

ditto

 

All mining towns vary. You need to understand what they all do and what they are mining or what operations they are running. There may be a "mine" nearby but more of the population may be working on the rail or the ports shipping out product.

From what I've seen the boom is due to the capital works, ie building the mine operations and equipment rather than the digging ... eg 2000 people for construction, 300 for operations phase

Don't be scared off because others say they wouldn't touch it. Some people make a lot of money from mining towns but a lot lose money- be the one that makes a lot you need to know when to pull the pin before you buy

8 years seems like a short life?

 

The smart money got in and out of mining towns in 2001 it started booming, the boom is now over and that is why property values have dropped as much as 50%+.

A recovery wont happen any time soon, and currently there is an oversupply of stock which means even if you think you are buying a bargain today and create cash flow it would be very high risk because you may not be able to rent it out.

MTR

 

My strategy is to never buy there at any time.

 

I must ask what you know or understand about mining? Do you or have you worked in the industry?

In order to successfully make money in the industry you need to know how it operates. However you also need to know and understand the specific project that you are investing in.

Just because a mine has a life of 8 years doesnt mean it will drive the market for 8 years.

Tread carefully

Blacky

 

To make money in a mining town, the following rules apply for me;

1) it can't be a 'town'; and
2) it needed to be more than a 'town' before any mine took off; and
3) it needs to be a multigenerational place - kids need to have grandparents there, etc.

in WA, that's pretty much Broome, Kalgoorlie, Esperance, Port Hedland, Newman.

 

Bre-X was a blast.