George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Great news.. You'd hope they are throwing anything they can at this to get it producing even on a small scale asap.
#BRN is pleased to report that the first leach pad modules are now complete and will receive ore this week to stack the first module.
#mining #nickel #cobalt $BRN https://t.co/OmGnUO4PnL
@ Cacher - the way things look right now, I think they are highly likely to go for the increased BRN investment which'll make it really quite significant. Option possibly to sell down equity stake once it is fully ramped up. Assume finding other 'good' deal in current climate might be tricky, though on the flip side maybe there will be more choice if everyone is looking to get new projects going. And the beauty of it.. non of the increases in operating costs will be hurting apf. Perfect storm.
@ CT - yeah, still about 3 weeks to go, but I think a 3rd record quarter in a row is already baked into the cake. Met coal and cobalt have been in very nice places. Sorry to see you departed caml, but appriciate kounrad is a little uncomfortably close to Russia. However, I would argue to a degree that if we go from inflation > deflation(recession), caml's low costs make it safe(ish) in that respect. Time will tell.
@dusty: "Just to point out there is no direct exposure to thermal coal here. They completed the divestment of the Narrabri royalty at the end of last year(see rns on 31st dec)."
My mistake.
Top-3 remain Cobalt, Coking Coal and Copper and all of these are strong. It looks like Copper is at an all-time high, while Cobalt is continuing to rise and higher than Q4, so Q1 should be very strong and maybe another record.
Yes I'm looking forward to the company detailing Piaui's move towards small scale production. I think the market largely overlooks BRN (and the exposure APF has) as it's not a public entity and thus not required to report updates - but significant US government involvement, and Piaui's ability to supply the EV/battery markets will certainly garner interest going forward
Agree on those sentiments Dusty. The rise in the price of nickel has been amazing over the past few years and a very important commodity to have in one's portfolio. I will be happy for the Company to keep the current rate of dividend and plough back more into new projects when the opportunities arise.
This seems utterly bizarre - why would power plants not just burn the higher quality coal.. if it's cheaper. Assume met coal price will have to rise, unless I'm missing something.
Thermal coal swap Australia FOB US$443.5/t vs US$313.0/t
Coking coal swap Australia FOB US$420.0/t vs US$410.0/t
Agree with Dusty - better to grow the pipeline this year rather than an extra divi.
Just to point out there is no direct exposure to thermal coal here. They completed the divestment of the Narrabri royalty at the end of last year(see rns on 31st dec). But it will be intresting to see what bearing the movement in thermal coal price will have on met coal prices, which were already rediculous.
Thermal coal prices do have some impact on how much money apf get back from the Narrabri divestment, so are a boon in that respect.
But the big picture here for income in the short term (in order of importance) is:
- Coking coal!
- Cobalt
- The other stuff
And at some point this year nickel could start playing a meaningful role. With Brazilian Nickel(Piauí project) potentially starting to ramp up production in May(as Cacher referenced below) and apf having an option to invest a further $70m for a more meaningful income stream once the plant is fully developed. Believe they also have an equity stake in the company. Assuming this makes it to full production, the original investment here could be the most savvy in the company's history imo.
I personally don't want any rise in dividend/special dividend right now. Better they try and grow the future pipeline while they are doing so well off the high prices in key commodities. Dividend is decent anyway.
From what I see, thermal coal has now doubled in value since the start of 2022. It has risen by 33% today alone. This should have a very positive effect on Q1 profitability.
Thanks Cane,
Certainly well up now. The market (analysts) are clocking the non USSR and eventually non China commodities play.
Wonder if they are looking at the AAL - APF delta.
I sold TGA (150-700p what a ride!) to add a few here. TGA all coal. Has further to run imo but this one has more diversity and imo about to move.
Getting in under 150 still gives you around 6%. Although that could increase imo.
Usual caveats
Trek
From what I see, thermal coal is at all time high. Though we only have a 10% weight, it should provide a nice uplift in Q1.
And hopefully APF might find a nickel royalty with the JT stated firepower.
Looks like trouble brewing in DRC - will be interesting to see how prices in VB respond.....
@TrekMadone, well done on your entry price. You must already be nicely up on this after Friday.
I think the portfolio breakdown is currently:
==============
Cobalt: 45%
Coking coal: 12%
Copper: 11%
Thermal coal: 11%
Iron ore: 9%
Uranium: 7%
Vanadium: 4%
Gold: 1%
Other: 1%
==============
The top 4 account for ~80%.
Q4 was a record and so was the full year.
Cobalt has increased another 5% in Q1, while coking coal and copper are very strong and thermal coal is close to a record. So I expect Q1 to be a new record and if these prices continue, we may see another record year. Then there's the Russia situation.
At some point, the record profits here will become obvious and I expect (hope) they'll pay a special divi and do a buyback. And as JT has mentioned, they hope to have $150m of firepower to deploy into new royalties later this year.
If all of these happen, I see 50+% upside here over the next 12m.
Interesting article in FT on AAL’s results. Mentions impact of Russian Ukraine war on commodity and that AAL is a prime beneficiary.
https://www.ft.com/content/84376eb2-3191-4541-9575-9d77e97eb0e2
If you compare AAL sp with APF for 5 years on google finance. See how they follow each other and then a huge delta opens up!
Not saying APF will close it entirely as there is a different commodity mix but given that we sell a lot of the same especially Nickel that delta imo is overstated and I see it reducing.
Usual caveats
Trek
Hi Cane,
If you read my posts over there, I cover the debt. Note their intention to use cash from Brazil sale to return to shareholders or for acquisition. If debt was an issue they would use the funds to pay it down. It’s not an issue. Most is fixed rate; $2bn of $4.5bn is either Libor, Euribor, TJLP or US-LIBOR tied + a fixed %. So small variable rate. All well covered by predictable income. Divi is 1.9x covered. Don’t use Morningstar or HL, their metrics are wrong!
On APF, how long will it take for the market to wake up to the need to source metals outside of Russia. For sure it won’t happen over night and I very much doubt they, Russia, will be cut off from SWIFT, but there will be a push back against this horrendous bully!
Obviously APF can’t fill the void but it’s well placed. The subsequent increase in commodity prices will more than compensate for any FX headwinds.
I managed to buy on the recent market drop at sub 140 but fully intend to add as I can. I also like the divi’s that come out closely together around Christmas. Fills an income gap for me.
Usual caveats
Trek
@TrekMadone: Well done on choosing a good entry time for APF.
I looked at GLO. I'm assuming you mean Contourglobal? From what I see, they have a huge amount of debt (net gearing is 2000%), while the PE ratio is 26. What makes it a good investment?
Good luck.
Bought in today. Been on my watchlist for ages.
Fx concerns kept me away but I think the horrific situation with Russia could push up commodities prices and constrain Russian supply.
APF’s geographical footprint is favourable.
More importantly though is it’s inflation beating divi, quarterly and improving ops pipeline.
Anyone seeking out a similar whopping yield covered 1.9x by earnings, 7% quarterly with chance of a special, 10% yoy divi growth and ESG rated check out GLO. Energy provider across 20 countries mostly Europe but non UK.
Usual caveats
Trek
Tweet from BRN:
"Substantial progress was made with the construction of the #PNP1000 site by the end of January, at almost 84% complete. The awarding of an Operating License for #BRN in the Q4 21 was also great news, which keeps the Company on track for planned first #nickel production"
https://t.co/0PGT4xsTKy
No idea but agree would be good know. Bit of an overhang
Dividend's normally paid on a Thursday so the 17th is probably the correct one anyway.
Is this 700,000 share sale the last of JT's disposals for the moment ? Would be good for existing shareholders to know as it causes uncertainty. Not complaining about the Company or my investment .
haha it is in my Interactive Investor account also - i have asked about this in the past and ii pre fund the dividends so they are there first thing. Pretty good actually!
Mine is showing up in my Interactive Investor SIPP account already today? Weird