The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Please explain checkered history with lenders and the capex history (dates amounts and projects)you are referring to
GeneK; excellent post
JWB, I’d love you to put numbers against that.
I don’t see it at all.
Can you explain what you class as "expensive" JW? What is your argument based on?
Look at profits expected this and next year and then compare to the Past and the market cap
That’s why holders are exiting
Contango..this has more to do with the increasing rapid demise of the UK stock market .. pension funds are simply moving their investments overseas ..under such an environment it is so difficult to attract new investment , hence the decline in the share price , not just of Kenmare , but healthy companies too
I suggest you follow the herd , and move your money overseas too
The FTSE is now full of rip off investment trusts , getting their fees by investing in other providers investment trusts , none of them making any positive returns for their investors .. give me the names of any who have made surpluses for the past 5 years , very few .
Within five years the FTSE will be an irrelevant index
Get out while you can !
Aegis Financial Corporation 4.01%. Deep value small cap fund based in Mclean VA. Impressive long term record. Significant manager money in the funds. Bad timing to build a stake unfortunately.
More needed though..
I wouldn't read too much into Fidelity selling. A lot of II's are probably under instructions to hold more cash because of the current global events. Fidelity are probably pre-empting a potential withdrawal of client funds in a worst case scenario.
I think it is still a buying opportunity at these levels and generally still positive for a great outcome. Remember they delivered the previous relocation of WCP successfully to financial plans. After completing the move it guarantees at least another 20 years of mining with higher grade quality.
Even if a unacceptable bid did come in it would only rally the share price to more appreciative levels.
More selling from FIL.
I think I’m going to go back through and look for the last time our BOD secured a new shareholder of note….
It’s been a while, if the current team cannot get new investors to buy into the story they need to go.
$250-300m EBITDA, 12% dividend, 65-75% discount to Net Asset value blah blah it’s a decent story and when explained that there is a market supply issue, new developments will need materially higher prices to secure developmemt finance blah blah
What the hell are they doing…. The funds are clearly not coming to Dublin for lunches so perhaps the BOD need to put more effort into the Share Price and gaining institutional support.
This is becoming a joke and the Company is a sitting duck for an Offer, I cannot see the Shareholders protecting the BOD but they would still do well…..
Maybe they don’t care, but I do and I’m really annoyed but the lack of effort/results over the past 6 months
I am tempted to invest here as there is a clear disconnect between the notional value "in the ground" and the share price.
I have just watched the Investor Webinar from August and I was very disappointed in the management team, especially the CFO.
There was a real lack of urgency or energy in relation to bottoming out the future financing need or explaining why it makes sense to pay a high dividend at present before the cost and funding of the move are set in stone.
That might be OK for a proven management team, with multiple major capex projects under their belt but Kenmare has a poor track record on this and a chequered history with lenders.
You just cant ignore the possibility that the project costs more and arrives when prices are under pressure. The key solution to this is a well structured (flexibility) fully committed debt facility designed for such an eventuality. That should have been management's absolute focus. Instead, it seems to be an afterthought. We should be hearing about advisory team appointments (banking, technical, geo, etc.) , outline terms, discussions with Export Credit Agencies etc.).
My fear is that Lenders are not convinced by these guys who seem just too comfortable when they shouldn't be.
Sorry to put a downer on this. I still think its a great opportunity, it just needs a reality check at the senior management level. Needless to say the board will be sleepwalking through this but making all the right noises about sustainability etc. (P.s. why is the board so pale for an African company?)
Based on a recent Oaktree Capital Insights podcast… further thoughts on Sea Change
I would love to have some senior secured Corporate loan at 15%, can you give an example or two?
Interesting aside at the capital mkts day last April.. an analyst asked MC the replacement cost of the Moma mine … c. $2 bn was the reply…
Tep, that is exactly the question. Many people and funds have supported the Company, and its board, to deliver the value of the true value of the asset, which I firmly believe to be $1.2-1.4bn.
The question I am posing is, do you believe this board are capable of delivering in excess of $800m in 3 years time?
If not, and many people believe in the asst but not the board, then what would happen if an opportunistic Buyer made an Offer of $600m now?
Since the Tender Offer, we have seen consistent II selling. Therefore, if an Offer was received would the board get support to carry on (under delivering in many people’s eyes) and defend the true value of the asset. Or would, given the higher rates environment, the II’s accept the Offer, realise a reasonable return and deploy their capital into lower risk investments delivering a similar return.
In my view, the II investment world has been through a sea change, capital that is high risk and under delivering is at an acute risk of being sold off at a discount and redeployed into lower risk investments.
The II’s could realise a return on KMR and reinvest it into a senior secured Corporate loan at 15% so why leave it in KMR?
The reality is the board is paying a dividend (less IWT) and the capital appreciation is currently extremely poor.
If the II’s were given a chance to realise a good return (say $600-800m) would they really feel leaving the capital in KMR for 3 more years look attractive versus lower risk similar return investment opportunities.
In my view, the board may serious struggle to defend a reasonable Offer of 2x the current share price which for me and many others would be hugely disappointing.
The board appears to be asleep at the wheel again. They are not driving the investment story. II’s are not buying in to replace exiting II’s and that is why the share price is on its knees. The global macro story explains why the share price should only be around £5 not £3.20.
Top quartile miners are not trading at 1.2x EV/EBITDA and I feel the company is a SITTING DUCK
Remember the board rejected the offer of $800M since it did not recognise Moma’s value as a long-life, low-cost asset. Lets not forget where KMR are. " WCP A will complete mining at Namalope in late 2025 and commence its transition to the Nataka ore zone. Nataka is the largest of Moma’s ore zones, representing 75% of Kenmare’s Mineral Resources. WCP A is expected to mine Nataka for the remainder of its economic life, which exceeds 20 years."
An offer $800M today would equate to approximately 700p/share. With all due respect what parameters have changed that would allow an offer to be acceptable below that figure? It my mind this still sounds like a great long term hold and continue to reinvest the dividend for now to take advantage of such a cheap share price. Or could I be missing something ?
Fair comment, I think £5 per share would be a miserly sum but indeed, right now (Friday evening, long week, need a 🥃) I would take the £5 per share and run.
Monday I may be a little brighter but let’s see….. obviously there is no Offer……. Yet!
Getting a bit desperate chums. You're making out that if an offer did indeed eventuate you would accept any miserly sum!
All I would like to add is I would take the offer as well although I would probably plough it back in to who bought us. This is a great asset which with the right management and outlook would be an outstanding investment.
Thanks Saga, always value your comments.
You know I’ve been a big supporter but I feel like the board have fallen asleep at the wheel, much like they did before the Iluka Opportunistic Offer.
For me, with much regret, I’m in the same boat. Bring on the offer and time to move on.
Con, I was indeed around during the Iluka Offer. I certainly held shares back in 2015, if not earlier. Ithink the company is a "Sitting Duck" for an approach and this time I shall sell. The Board are too interested in playing "Miners", or should that be "Minors", than they are at building the company for the benefit of the shareholders. Some of the BoD should take their overstuffed pensions and go now, I am sorry to say.
Looking at the announced information (not available for H2 2023 yet):
H2 2022 EBITDA = $298m - $106m = $192m
H1 2023 EBITDA = $110m
Last 12 Months (LTM) EBITDA = $302m
Market Cap. Today = $368m
EV/EBITDA Ratio = 1.22x
Even if H2 2023 generates $140m EBITDA that means the current EV/EBITDA is 1.47x
Forgive me, and I hate to say this, but the Board has got to be feeling very vulnerable. I cannot see the Institutional Investors sitting back and saying its ok we will look through 2024, 2025 and 2026 with reduced dividends before we get a capital return of Net Asset Value.
If we assume a 3 year window to return $800m as an Acceptable Return and 15% as a Discount Factor, or Return achievable on cash over same period.
Then Selling today at $526m (or £4.64 per share) would allow the Selling Institutional Investors to exit. This represents 1.74x on LTM EBITDA and 1.77x on 2022 EBITDA.
In my opinion, the Company is a "Sitting Duck" for a Global Competitor to Buy KMR on the cheap and arbitrage several turns on the multiple.
Of course, I can turn this into a Buy the Dip argument and I do feel with the right approach KMR could realise $1.2-1.4bn on a sale. But if the current approach was right the Share Price would not be £3.25.
Hardly big buys compared to the number of nil share options acquired over the years.
MC bought £46,413 @ £4.32
TH bought £30,520 @ £4.36
MD bought £10,606 @ £4.24
These were purchases not options
Former derivatives trader, now M&A Advisory and deal with Wealth Management firms across UK & IRE
325 looks to be the bottom to me. Lets see what happens tomorrow. But your 331 trade in my opinion is a good buy. I wish had more cash to spend.