Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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This is being massacred today!
Sold out - bad election news coming out of Chile.
That is definitely true!
This is mining mate and big PM mining at that, they don 't come any more bent, it is what it is.
Bonker why would someone take the other side of the hedge at the then current silver price and throw in a quid pro. We have enough capital for the rare earths so how could it be a quid quo pro for that. I am a believer in Occam’s Razor and the simplest explanation, so I believe our board, who say the did it to protect Pallancata viability in case silver dropped, as happened with our also expensive to mine Arcata mine that had to close. This is from the last quarterly
report “ On 8 February 2021, the Group signed agreements to hedge the sale of 4,000,000 ounces of silver at $27.10 per ounce for 2021 and a further 4,000,000 ounces of silver at US$26.86 per ounce for 2022. This is to protect cashflows from the Pallancata mine in the next two years with the existing resource base.” Shame they did next year too, unless silver tumbled. But nice to see share price up a bit as opinion polls show election narrowing. I still bet the farmer will win, and that he will manage to get some tax rise through Congress; as metals rise we are going to see more windfall taxes around the world, see Chile where we have the rare earths, and Argentina San Jose. Despite the hedge, hopefully rising metal prices will pay the extra tax and maintain our share price.
For the umpteenth time - I highly doubt whether the hedge is based on their outlook for the Silver price - IMO, it's a reacharound for big players who need to secure physical supply going forwards - likely with a quid pro quo, perhaps pertaining to the Rare Earths play in Chile and/or Peru suddenly playing nicely ...
Bonker let’s hope this is what we have been waiting for and break through $30, shame a third of our silver is hedged but can we persuade them to ripen Arcata. The shame is that unlike us they have little faith in the silver price rising, hence the hedge, so will not be brace enough tho Arcata would be very profitable at this silver price. Why not hedge its sales for next year and reopen if they are that afraid.
$1870 / $28.5 at the moment - we've never closed a week above $28.25 on Silver so who knows what happens next - either a "tamp down" back to $26 again by the usual suspects or maybe we're at $35 by Friday ...
Gap-up.
Profits post exceptional in last two pre covid years were approx a rather miserable £25m and £50m. Let’s hope increased metal prices faster than rising costs obviate the increased tax in which case will remain at PE between 20 and 40, which is still quite steep? Shame a third of our silver is hedged and already at $1.5 below current price and reducing our exposure to further rises. Maybe the board could reopen Arcata to take advantage of these
While mining companies in Peru won’t be cheering additional taxes, that prospect would be preferable to the government expropriating assets, which was the initial fear when Castillo defied polls to win the first round vote. In addition, he’s likely to face stiff opposition from a divided legislature.
The tax proposals are “rather less radical than his first-round rhetoric,” said Eileen Gavin, global markets and Americas principal analyst at Verisk Maplecroft. “Our view is that the local private sector in Peru, including the mining industry, should not panic. But should he be elected, big mining should be prepared to come to the table.”
https://www.bloomberg.com/news/articles/2021-05-17/a-push-to-tax-the-copper-boom-is-spreading-from-chile-to-peru
Although well known and understood by commentators up to now, Reuters are reporting Castillo has confirmed his intentions to tax miners, particularly copper as mentioned in a document released on Sunday.
“Let us note that the Chilean Chamber of Deputies has already approved a new royalty whose rate reaches 75% if it exceeds US$4 a pound, as is the case today,” Castillo’s Free Peru party said in the document.
Peru's socialist presidential candidate Pedro Castillo said on Sunday night he would raise taxes and royalties on Peru's key mining sector and renegotiate the tax contracts of large companies if elected next month.
Castillo warned two weeks ago that if elected he would review contracts with foreign miners, whom he accused of "plundering" the country, to ensure 70% of their profits remained in Peru.
The lead Castillo had up until recently in the polls has closed with voter simulation at it's closest in months.
https://www.theedgemarkets.com/article/push-tax-copper-boom-spreading-chile-peru