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Correction
Should have read
Candid quotes 3 million a year interest
But according to Rns only 1.15 million a year
( 23.6x4.85%interest =1.15 million) not 3 million why the big difference
Candid
How did you get these figures
You say 10% interest
rns says4.85%
You say share it back costs 30 Million
Rns says cost 23.6 million
You say buyback cost because of board action
3 million a year
1.15million a year.Less than half you quoting
How did you come up with your figures ami missing something
This new $200m RCF at 10% interest just shows how crass the $30 million shares buy backs at £4.00 ISH when share price is now less than £3 and falling further ..
Had they not done the share buy back they would have been saving $3 million per year in interest payments at a time when they needed that $30 million funds they used up , to grow the business
Gross stupidity from a naive ( kind description )CFO who appears out of touch with optimal funding arrangements for a growth company
Anyone expecting an announcement from Fidelity today - down to some 6.5% s my guess if anything.
Was there an expectation of how much they were intending to reduce by?
How recent is this podcast ...haven't had time to listen to it but title info on web page suggests 2021 ?
And at the current price it yields over 10%
IMO from the limited detail this is an excellent agreement.
Operations continue profitably and a RCF allows the company to plan and manage the move, without unreasonable costs for unutilised funds.it is a good solution and as I’ve been hard on the BOD I have to give credit to them on this one.
The
Agreed but will have to wait for any positive reaction from the market. Always seems to take time for a positive sp to develop.
Here's hoping
Positive news on a debt facility today. My view was that this should be a key focus of the management team and it clearly was. LEnders will (almost certainly) have been provided with detailed technical reports as part of this process. ALthough there are conditions precedent to be satisfied before the facility becomes legally available, I suspect these are not hugely challenging. This is a major positive step forward in my view. DYOR
Https://www.ey.com/en_ie/podcasts/2021/09/cfo-outlook-exploring-the-rise-of-kenmare-resources-with-tony-mccluskey
may be of interest to the newer members
I think that is a very generous approach. I'd adopt it with my kids but maybe not with management teams.
Small investors are at a considerable disadvantage on this point. They don't get to share the room with management teams and really get to know them and see if they get it or not. Even then it is an art not a science in my experience.
I wasn't impressed with the video I watched of the management team here but then again, it may be that they were just "toning down" the content for a retail audience. Hard to tell.
Best of luck with it!
Yeah, the market seems to agree with my concerns (or perhaps others) but you keep backing your own opinion. I am not arrogant enough to think I am ever smarter than the market but rather try and understand a big divergence like this.
To be clear, I am neither long or short Kenmare so I genuinely hope you are right. I am simply trying to provide a rational explanation for the huge disconnect between the "asset in the ground" and the share price. My suspicion is that management credibility in relation to the cost & funding of capex is at the heart of this. I could of course be wrong.
FWIW I think if they can put together a credible funding structure, you will do well here. I think they will get there but I never, ever invest if I have concerns in relation to a management team and that is unfortunately the case here.
How to value an ETF?
I have a degree in finance, an MBA and 25 years of experience in investment banking so I am sceptical enough about most "financial innovations" but an ETF is not particularly complex. Anyone that can't understand an ETF should most certainly not be picking individual stocks.
There is plenty of simply drafted information on what an ETF is and why it might make sense for you all over the internet, so maybe take a look at that?
Making a call on the credibility / performance on individual management teams is much more difficult than getting a basic handle on ETFs in my opinion.
GeneK - Your "research" is 8 years out of date and wholly irrelevant in my opinion. Good luck with your investment.
GeneK - "ETF" I used to invest in these also. Then it dawned on me - how do you determine value of such complex financial instruments?! Each to their own as they say. Good luck with your investment as well.
The group will also fly over the Congolone ore zone to the north of Moma, which represents a potential future growth opportunity for Kenmare.
- haven't seen any estimates of net present value for this project..
I have always liked the Kenmare story. "Showing courage in the face of adversity" is what I am reminded of when I read this article. There were a number of bumps in the road in the early days and some almost terminal. But it sounds like management have learnt from their experiences.
"We want to just focus on making the thing sing, and let the people who put money into this investment feel that it was the right thing to do, that they've got a good return on it and it's working really well. And then we'll move on from there."
Thats good enough for me
You asked for background to my comment and I provided it. The article sets out the near collapse of Kenmare, a distressed restructuring involving a write-off and a debt for equity swap. It isn't the first or last time this management team got "unlucky".
I don't post much because I am typically a ETF investor. I remember this company and I am intrigued by the valuation.
I set out my concern re the management team and I stand over it. I hope I am wrong though and ideally that financing plans are announced in the not too distant future.
Good luck with your investment. It's not for me, for now at least.
You asked for background to my comment and I provided it. The article sets out the near collapse of Kenmare, a distressed restructuring involving a write-off and a debt for equity swap. It isn't the first or last time this management team got "unlucky".
I don't post much because I am typically a ETF investor. I remember this company and I am intrigued by the valuation.
I set out my concern re the management team and I stand over it. I hope I am wrong though and ideally that financing plans are announced in the not too distant future.
Good luck with your investment. It's not for me, for now at least.
Genek - To quote an interview with MC from 8 years ago is equally irrelevant to today's situation. At the same time, the interview demonstrates that the BoD managed the situation with which presented itself and have established and maintained excellent relationships with their bankers. As Contango enquires, where is the poor track record and chequered history with their lenders? I notice you have but a few posts and therefore will be gentle with you. Please ensure that your comments are relevant and based upon the latest data or you are going to be heavily criticised.
So where is the chequered history…
Banks were fully supportive of company strategy and rejection of opportunistic offer from Iluka.
SGRF put up the cash and all parties received full payment of all loans.
Https://www.independent.ie/business/irish/kenmare-climbing-back-from-the-edge/34944268.html
Some useful historical context here:
https://www.independent.ie/business/irish/kenmare-climbing-back-from-the-edge/34944268.html
JWB - I do not see any numbers in response to Contango's post. I assume that you do not have any to support your statement. I might be able to help. Profit after tax for H1 was $67.8M , an increase of 8% over 2022. I have not seen a Profits Warning issued since so it may be safe to assume that profit levels will be maintained if not increased. Capex for 2023 to 2025 on WCP A move to Nataka is estimated at $247M, including a $37M contingency. At 30.06.2023 net cash stood at $42.3M. So where are the figures to which you allude? At a P/E of 1.75 currently, does the sp looks expensive? What level of sp and P/E would be cheap?
Damofari - what are you talking about? "Excellent post" indeed! GeneK needs to support his statement that "KMR has a poor track record on major capex projects and a chequered(sic) history with lenders." Further details are required. I have only been a shareholder for approximately 8 years. I remember the refinancing and capital restructuring. Nothing to do with capex or failures to observe covenants with lenders which were not approved. So what is GeneK talking about, please?