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The scary feature is that cash from operations only amounted to to $168m in H1!
Then from the capex budget only $220m was used in investing activities on the cashflow statement! That leaves a massive capex surplus in h2 . Cash only stood at $362m on the last account ... and that down from $689m. Capex and production downgrades are going to send cash much lower here. And Silver has retreated notably of late...
Rastuss - I’m sure you will agree that name of the game is to anticipate the next financial read. For all the reasons cited I don’t see a good one coming and it’s going to erode confidence again. Holders need to consider how low are they prepared for cash to go ...
Rastuss - just picking up on your response now. My short here from 800p is not just based on cashflow but also the overall valuation. Capex absorbs the cash pile which come the next update is going to spark not just real fears but once again highlight how absurd the price tag is. The situ hasn't been helped by the challenges posted on the latest presentation and the revelations around future gold production tumbling. Unless gold and silver really shift from here the cashflow issues will persist and to that end i only see lower prices coming.
Agree with subwave and tiger. To make money you have to spend money. Obviously it will take a while to be back in the £10 area. But I can wait.
Poker....Yes the H1 was bad and they have/had problems. But the share price already reflects a lot. And its absolut normal for a mining comp, when you bring a massive new project online, to have year(s) where capex is higher than what you earn. Its quiet normal to take debt for that. Tiger is imo fully right with his opinion. And lets see who bought in again with these discount prices the last weeks. For me this is/was a coordinated short attack with the help of the downgrade of Goldman. This is the biggest silver producer and the biggest gold producer of Mexico...lets see where we are... when silver gets a run. As a geologist who worked in South America I am fully invested now and bought my last batch today. Cheers !
Yes, a lot of money is going into capex - that is, building a new mine and improving other operations. And that hurts right now.
But this, in due course, will lead to increases in production and mine life - and, as long as the silver price doesn't slump, increases in free cash flow and the share price.
In a year's time Fresnillo should look like a very different investment proposition. That's why I'm here.
For me, the only real question here is judging the absolute bottom of the current share price slump in order to maximise returns. Tricky, that. But the day will come when the current share price will seem utterly ridiculous, and an absolute steal.
Subwave,
The h1 report was sh*te ..and you dont need to be a troll to see that... and you dont need to know much about mining to know that either .....
Capex for H2 is expected to be $337m so they will need to dig into the cash on hand
Blackrock know a thing or two about mining and they have been reducing their shareholding in Fres
Capex might be investment in equipment etc but right now the balance sheet is taking a real squeeze and the SP has responded accordingly
Nickel,you really have no clue about mining business...for me you are a misleading troll or short/basher...nothing more. Must be satisfying to play such a false role on a message board.
Rastuss - when you cash from ops don't even cover your annualised capex budget you have a problem !
A share usually falls a lot before any FTSE drop , and usually recovers some after any demotion actually occurs.... as such the "damage" of any FTSE demotion may well have already taken place....
H1 cashflow $316.1m
H1 capex $248.4 m
and it looks like any future dividends will now attract the 10% witholding tax
H1 was pretty dire .... certainly going to take some time to turn the balance sheet around, especially with operating costs on the continued rise
Sold out yesterday 5.81. Was thinking of buying in again but weighed up the risks ie cashflow, location, demotion from ftse 100 looming. May go sub 5.00 before xmas
I've provided the cashflow statement analysis many times.
Hope most have ignored the ramping on here