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Good answer Cap. LTH. In a strange way there is the possibility that problems in RSA can have a beneficial impact on KMR also. Nonetheless its worth watching.
Also this is a really safe mine above ground, don't most disputes occur relating to the more dangerous underground operations?
Yes you can consider RBM problems, yes sub-saharan Africa can have these types of problems but the comparisons only go so far and tarring all with one brush is simplistic.
The Moz government is military based (as are many Africa countries) just more obviously so. After the civil war, the propensity for unrest is perhaps less and certainly controlled, unless considering inter party problems or the issues in the far North.
Also KMR contribues 5% of Moz exports. This automatically implies government support - as shown in the labour dispute a few years back. It is as good as it gets at present. If you have concerns on these issues at this stage you are in the wrong investment.
Hello Skid,
What you say in true, and Africa is not without it risks, what attracted me here was that they are paying down their debt, this is a large Capex year and and once done I am not expecting anything major other than to update plant and routine maintenance type projects to keep the mine in tip top shape, if however some mad plan emerges for expansion elsewhere or they decide to buy another mine I won't be here.
I do think this year is high risk almost all or nothing, and hopefully Steven McTiernan who bought £100k worth of shares last year will be tempted again along with his mates and instill some confidence going forward.
consider
Rax, don't fall into the jam tomorrow trap with KMR. Its been going on for at least 6 years.
One other consideration that investors should continue is the unrest at the RBM mine down the road. After a 4 week shutdown in Dec, it reopened last week, just to have shootings again yesterday. If this unrest spreads up the road, it is something to think about. KMR do a lot in the community but this is still Southern Africa and just like in North Africa unrest can spread quickly.
I would of thought its obvious to all that this year is pivotal to KMR if the moving of kit is successful then KMR are out of the woods and all is rosy for the future, cash generation guaranteed, but if there is some mishap this would be a major setback and put KMR back years in my view, so while there is uncertainty the sp is going to be held back while the market watches and waits for the outcome of this major engineering endeavor regardless of what figures they present in the near future.
I think if all goes well there will be a serious re rating of the sp as investors jump on board risk free to reap the rewards that will be coming KMR way.
This major Capex has been known for a while. It costs a years worth of EBITDA, and even if it goes smoothly, seriously dents cash available for shareholders. I suspect folks are thinking that their money is better invested elsewhere for the next year, and then come to KMR once the capex is out of the way and there is a few years run with anticipated dividends.
ObsKen, thought by now you would be grateful to anyone who spend time replying to one of your posts.. (lol).. although many share frustrations of jam tomorrow etc.
BigEarl, I am on a different page to most here who mull over shareholders, EIB etc etc. Think the issue is simpler. They are spending USD 106M moving one of the main bits of kit 20km down a made up road in one of the least developed parts of the world. What is the risk of something going rwong? What are the direct costs of something going wrong? Most importantly what are the indirect / disruptive effects on production/revenue profile of something a delay and the ability to repay debt? These concerns seem much more important to me. I would hope the SP will rise as progress is made with the move / attention focuses on 2021.
Moving beyond the pessimism what are peoples views on what's holding the share price back...? Based on every conventional valuation approach this is (and has been for a long time) seriously undervalued.
I assume this is due to the current shareholder base rather than performance and the fact big players are unlikely to invest here for a 5% dividend when you could get circa 10% with a much safer RBS.
I guess the question is really... What do we think it will take to actually bring the share price closer to the company's inherent value...?