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He’s not digging it by hand - what does his age matter?
7% drop in metcoal prices is not helping
Amin0406 you called it right. A good opportunity for new investors to take a position or current investors to top up. The only difference of this week to last is that we are set back by 1 or 2 months waiting for the 3rd HWM to arrive, get assembled and extract the extra 80KT ROM=40KT washed metcoal. Not sure why we didn't just lease the 2nd HWM instead of buying a cheap one a few months ago (well I say cheap, but $2.4m instead of $8m new). Permit is due in next week or 2 so once that leased rig arrives it can be put to work. The purchased rig will still be repaired. Both leased rigs will be operated on the same terms agreed with Mega back in October 2021 so margins should hopefully stay around $150 or more, depending on metcoal prices. Steel demand and thus metcoal is due to increase so whilst these 60p+ prices look worrying on the surface, as an invested holder I just see it as a month to skip over and look forward to the new rig coming onsite and 7/8 trains and any other new acquisition plans along with the profit forecast once all rigs are confirmed operational and coal being shipped out in larger quantities. Great if you have spare cash today. At least we have a washplant onsite and are selling our coal from the US.
amin - based on profit projections by the CEO in earlier days when met coal price was significantly lower than current. You're right, met coal price may change - it may go up again for all we know - some think it will due to demand and supply issues. My assessment is based on current prices.
how can you even predict what profits might be when you are not even part of the business and have no idea what the expenses are? How can you predict what the met coal price will be in sep.
Lets see but I personally think there is a few expenses to be reported in the accounts which people are not accounting for. Nothing wrong with the stock in my opinion, but I think we have all been spoilt by the run upwards. This share was 90p a few weeks ago. A lot of good news since then and the price is now 70p. we will see 60p before we see £1.
Just my opinion
Amin - depends if AW waits to be able to pay 10p / share 1st div - which will need cash of about £35m. If production is up to 80k tons pm from sep at current prices that's probably generating at least £9m profit per month. So could have the nec funds by Xmas to pay early in new year. Or he may choose to pay a smaller div (5p?) sooner. Nice problem to have. Can't think of many other AIM Co's in this position.
dividends will be next year at best
Tenantry - thanks. Anyone buying at current price and holding for dividends is likely to get a very nice return, year-on-year, for many years. PLUS I would expect substantial capital gains as the market wakes up to this. GLA investors.
Drop D, Apologies, I wouldn't have a clue as to how to cost the company. I say that at the risk of some more savvy investors stating why are you investing of you don't know what its worth.
I'm here in the anticipation of regular dividends, so would hope for no sale but I cant help getting drawn back to the possibility.
I believe the 3rd machine will run, how the hell do you produce coal with kit which isn't maintained or is the plan to only maintain when broken!!!! I would suggest that would be bad maintenance on a production line..
Companies who understand the value of an asset by what it produces when its working and what its costing you when it doesnt will have asset management strategies that take account of its capital cost.
I will leave Bens Creeks asset management strategy to the team, rather than suggest that they are wasting money on plant that is busted and of no use to them.
Do we have any evidence of the team wasting money so far.??
Wasn't the HWM funded via a CLN? Are we in danger of being diluted to pay for a machine that isn't, and maybe never will be, working?
What a mess and waste of money that HWM purchase was
Exactly Wolfbag, and there are far better ways to insulate yourself against the risk of failing to make contracted production anyway.
$2.5 million sitting idle doesn't make sense to me unless failing to meet contractual obligations out-weigh the cost - then again- I don't have $2.5 million sitting idle . . . . . .
I’ll leave that for the experts DropD :)
Tenantry + Erik - thanks for these thoughts, I'm interested in this line of thinking. How do you think a selling price might be calculated?
I agree, he’s no spring chicken either..
I'm also conscious that in a Bens creek video I watched, AW was very keen to emphasise how much it would cost to get an operation like this up and running and all the associated plant.
I did think it was a strange emphasis he placed upon the cost of the equipment and the operation being up and running, It left me wondering if he had an eye on a sale.
What could be better than building in all the assets for a long life mine with no immediate major capital outlay required going forward. Just a thought.
I'm reading between the lines the other way.
We need to ensure we can deliver our product, having only 2 machines available means any downtime costs 50% of our production.
If we have production figures to meet to supply X customer at so much per week / month etc, then we need redundancy in our plant or we never commit to more than 1 machines output contractually, stockpiling could be a solution, but possibly demand is going to outstrtrip 1 machine + stockpile capability, therefore having a standby machine available, to assist in stockpiling and also meet contractual obligations may have necessitated a quick solution, eg taking the option of the second lease machine while it is available and we ready our purchased HWM for use.
I think AW is playing down the third HWM, at some point this will be going into production but Wilson wants to keep a lid on expecatations IMO
Another high wall miner to double extraction capacity that now can’t go to a competitors site… ?
Yeah - that is bad business sense lol
Leasing and running it to commence next month… really stupid, the price of coal is too high. We better wait.
/end sarcasm.
We gotta fix ours up first, there aren’t many of these and getting the parts isn’t a drop by B&Q job.
Next month double production on a new permit as it says. Which means we can fill twice the train carts.
This is great news - once ours is fixed… we can run 3 if we want.
Agreed bob, we spend a few million and use it for spares and get contractors in to use their own HWM , thus creating smaller margins…
Am I reading between the lines too much when the RNS makes me think the purchased machine is FUBAR and unlikely to ever work? Bit of a waste of capital to have it sat there as a "spare". Maybe the bargain HWM that they nought has turned out not to be such a bargain?
Leasing another before getting the own you own into operation doesn't make sense from a financial POV and I can conclude only that this wasn't the plan.
BEN have exercised their right to first refusal on leasing a second HighWallMiner from Mega. Hence why the one that Mega had for sale on their website is no longer there. Permit is due in next couple of weeks to mine with a 2nd HWM but as this leased 2nd HWM is not due on site until next month we should probably presume that it will be late August by the time it is fully assembled and put to work on single shift with double shift ramping up the following month. The purchased 2nd HWM is still waiting on parts and renovation work but will be used as a back-up during any downtime of either leased HWM. The lease contract with Mega leaves Mega responsible for staffing and repairs of their 2 leased rigs so no union issues for BEN, unlike what was seen at Warrior Met. So another pushback of timelines which is why I have always used August/September as a realistic timeframe for the 2nd HWM to come online and to use the next trading year starting October 2022 as the month we have 2x HWM on double shifts plus a deep mine rig and 7/8 trains taking away 77KT+ washed coal to sell to Integrity. Invest for the future as 2022-23 will be epic! As always, only IMO and DYOR. GLA