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New gold rush is on as investors and central banks hoover
https://www.telegraph.co.uk/business/2020/07/06/new-gold-rush-investors-central-banks-hoover-bullion/
Sorry posted the wrong link.
JPMorgan analysts predict gold prices will surpass $2,000 per ounce by the end of this year and Bank of America analysts expect the gold price to reach $3,000 per ounce in 2021.
https://www.juniorminingnetwork.com/newswire/79725-why-gold-why-now-why-precious-metal-gold-producers-should-be-looked-at-closely-in-the-next-gold-bull-market.html
Pushing up again to get solidly over $1800/oz - usually gets a boost when the US trading session kicks in fully, I'm not sure where their sentiment is after the 4th July break (off Friday), hopefully positive after Trumps abysmal unity (lol) speech .
The fight for control and "good governance" of POG will not help other Russian focused Gold miners share prices.
I echo the sentiments of others on here, HGM is a better proposition IMO, god knows what will happen to POG but I really get back to my comment on risk in a previous post. POG could soar, stick or tank I wouldn't like to guess. but I recall a time when Russian assets where up for grabs and share prices halved or doubled overnight as would be oligarchs battled it out and bullets sometimes settled the arguments. POG shareholders should be prepared for a rollercoaster ride, hopefully it turns out well.
Some of our main shareholders where allegedly amongst the winners in the asset grabs - having strong "connected" shareholders in Russia is great, even essential, when there is infighting with each other as with POG , anything goes as long as you don't step on the wrong toes in a country where strength in respected above all.
Th SP of HGM and other gold miners are not reacting to the consistently strong underlying gold price, it is due to a number of reasons according to commentators. Covid, trump antics, money printing expectations, strong stock market etc.
But putting all that background noise to the side, the fact is HGM will be very profit at the current gold price and now half way through the year the revenues will now be banked - IMO a good 2020 is all but guaranteed WRT the gold price - even a $100/oz fall will not spoil it. The persistence is the key, spikes or dips in gold price mean very little, except they appear to have a dramatic effect on SP.
I don't know if there is an answer to the problem for investors (great for speculators), suffice to say I haven't a clue where the SP is going and take comfort from the strong underlying business case and we will recover strongly sooner or later.
HGM are undervalued IMO but so are many other gold producers and the commodity sector in general. Looking forward to next weeks action as Trump continues to dig himself a deep hole.
HGM is in the middle of an expansion programme that will remove pricier ounces from its output and keep production moving beyond the 300,000 ounce (oz) milestone hit last year. The average gold price achieved this year to date is approx. $400/oz higher and dividends should be covered.
Bridgewater's Ray Dalio says capital markets no longer 'free'
Dalio also said that investors should favour stocks and gold over bonds and cash because the latter offer a negative rate of return and central banks will print more money.
https://www.bloomberg.com/news/articles/2020-07-02/capital-markets-no-longer-free-markets-ray-dalio-says
Translation
Highland Gold: volume growth, dividends, low cost
Highland is most suitable for long-term investors looking for high dividends (7–9%) and less dependence on gold prices. The main growth project - Kekura - will start in 2023 and will add about 172 thousand oz. to production and $ 200 million to EBITDA, but not yet fully taken into account by the market and may increase capitalization by 30%, even without taking into account the increase in gold prices. Highland offers low cost ($ 556 / oz. TCC) and debt (1.2x BH / EBITDA). ?? ???? ???????? "???????". ?????: https://finance.rambler.ru/markets/44242181/?utm_content=finance_media&utm_medium=read_more&utm_source=copylink
https://www.brokers-rating.ru/reviews/?id=17253
HGM is probably the best value gold miner, trading at almost equal to it's book value. DYOR
Well this company is not that small either. it's valued over a billion in the US dollars or £860m and produces around 300,000 ounces of gold annually. It's one of the top gold producers listed at the London Stock Exchange.
Polymetal is a large cap miner and less susceptible to these actions occurring, i agree that POG has always had problems and HGM has better management. I am not trying to downgrade HGM as i am a shareholder, just thought this was food for thought with mid and low cap miners operating in Russia.
Kind regards Biggles.
Highland is likely to make excellent profit with gold at current prices. They're a very low cost producer according to my research. GLA
Bobbling around near to $1800/oz - should break soon.
HGM has increased profit from $47m to $177m over the last three years. With the current expansion work being done at the mines and the gold price at around $1800, this share should be much higher IMO. DYOR
We have a much better management here at HGM than POG in my view.
Not all Russian companies are same. look at Polymetal in FTSE100 , they operate in Russia too. POG always had prolems , nothing new there.
What is it about gold mining in Russia that attracts mysterious cliques of individuals who are keen on skullduggery, do you think? More than half of Petropavlovsk’s board, including the CEO, CFO and chairman designate, have been ejected at AGM by the votes of four shareholder groups. POG has responded by bring in a new temporary board of old lags under Peter Hambro, POG’s founder and yo-yo chairman, and is asking the Takeover Panel to investigate possible collusion. All of this follows Konstantin Strukov’s Uzhuralzoloto Group of Companies buying into POG in February. Here’s house broker Peel Hunt:
The volte face by the UGC board members (from supporting the existing board in late May) and then delivery of a proxy vote against has the feel of a boardroom coup aimed at giving UGC control over POG’s assets, with only a 20% shareholding and without compensating shareholders, let alone offering a premium for control. In our minds, it highlights the strategic value of the POX hub in opening-up otherwise unprocessable Russian refractory deposits.?.?.?.?
Given the operational track record following the commissioning of the POX hub, the increased focus on improving its (already solid) ESG scorecard, and the strong share price response to both over the past six-to-nine months, we suspect the majority of POG shareholders would be happy with the board as was, and happy with Pavel Maslovskiy at the helm of the group. As such, these shareholders deserve the ability to vote at an AGM in possession of the full facts and with a strong light shone on recent events. Indeed, by number the proxy votes received ahead of the AGM reinforce this view.
In reality, we feel this is a coup aimed at securing control of the one refractory ore processing hub in Russia that has spare capacity, a highly strategic asset given the large number of refractory ore deposits in country. The route taken, without offering payment, let alone a control premium, smacks of a coup and will tarnish the reputation of all companies operating in Russia in investors’ eyes, in our view.
This share should be testing its highs again
Gold spot price creeping towards $1800/oz.
And the gold price is very close to $1,800
Gold
1,782.25
+1.05+0.06%
Q2 closes today. From yesterday's RNS we know production and sales have not been impacted. By my reckoning average sale price will be around $1,710 to $1,720 in the quarter. Update mid July should be excellent.
"I hold shares in bot POG and HGM, but this is far better managed and much more transparent than POG imo."
I also hold both of these shares and fully agree. The beauty of HGM is that the company is stable, they are not constantly trying to do deals, mergers, or take overs, and there have been no nasty board room battles either. That, and as you say they pay a handsome dividend.
Year Ending Revenue
($m) Pre-tax
($m) EPS P/E PEG EPS Growth Div Yield
2015-12-31 276.18 13.89 $-0.03 -26.2 0.0 n/a $0.05 7.9%
2016-12-31 305.90 66.23 $0.15 11.9 0.0 n/a $0.10 7.4%
2017-12-31 316.68 100.32 $0.20 11.5 0.3 39% $0.14 8.2%
2018-12-31 311.15 108.25 $0.15 11.7 -0.5 -23% $0.17 12.1%
2019-12-31 395.39 158.73 $0.49 5.3 0.0 216% $0.18 9.1%
Despite the Russian connection HGM seems very well managed and tranparent company , paying a healthy dividend for at least as far back as I can check.
Dividend per Share $0.17(2019) $0.17(2016) $0.13(2015) $0.13 (2014) $0.06 (2013)