The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Diamond Trade Is Roaring Back Thanks to Stuck-at-Home Shoppers
https://www.bloomberg.com/news/articles/2021-01-24/diamond-trade-is-roaring-back-thanks-to-stuck-at-home-shoppers
Bluerock will ramp up to 45000 carats run-rate from Q2.
45000 carats with average sales price above 300$ , cost per carat will drop to ~200$
45000 carats with 100$ profit -> 4.5m$ profit from operations
Mcap 5.5m£
Great sale of stone, but not enough to gain a picture of current production, profitability and proceeds from other diamonds. The cash is being invested to transform the mine, but in the past they have been economic with the truth. I have a neutral view on BRD but hoping for a real turnaround.
If my maths is correct this should produce a profit between $3.4m low case $5.98m best case. Assuming my maths is correct this looks like a steal trading on an mcap of 5m. Worth a little punt on Monday unless I'm missing something?
Through David interview, it looks like BRD will be participating in the SA tender happening next week. I wonder how many carats of diamonds does company may have for that upcoming tender as the recent Q4 reports says that company made sells in December. I am guessing, they must have grossed little over $1m for it.
https://www.proactiveinvestors.co.uk/companies/news/938351/bluerock-diamonds-boost-production-and-get-set-for-new-plant-opening-in-q1-938351.html
If it is not sold on last Dec, they will also sell two recently found big diamond (14.8 and 8.7 carats) in that tender and can expect to get more revenue than selling it privately. The previous found 12.8 carats was sold for $76,000. Wish BRD will release the sales figures monthly from now onwards. It will greatly bring liquidity in the market that shareholders prefers for.
Does BRD has any rare high value diamonds such as red, pink, blue or green in any of the KV pipes? It would be awesome!!! Can that resource upgrade not show information on those rare diamonds if there is any?
It feels good to see the news stating diamond dealers are back and business are back too leading to normality bringing confidence in the market. The videos in the articles have presented great analysis on the recovery of diamond market and its direction it is heading towards.
https://www.news18.com/videos/ivideos/antwerp-to-surat-diamond-trade-beats-covid-blues-as-imports-rise-for-first-time-since-february-2020-3265565.html
I believe South Africa cannot afford to go into full lockdown again. The government there are well aware about the impact of it on the country economy and income of the citizen. So in compliance with the Covid-19 rules, I am sure BRD will continue operating its business with minimal or no disruption and they are well placed to take the benefit of recovery in diamond market.
Along with the recovery in diamond market, it will not take long for BRD share price to head north as the news of well over due update on mining upgrade will land any day from today onwards. Taking into consideration of provisional resources update, this is an expectation of additional 175,000 carats of diamond and the company will further undertake work at KV2 and KV3 to find the true size of resources.
After that, 2020 production update with massive improvement anticipated in Q4 2020 production report and the guidance for 2021. With another crushing circuit installed where BRD will have more ore processing capability, we may hear about finding of big diamond.
Around 60% of shares must be with institution, private companies and long-term individual holders. When you take into account with other small holders who has taken position with the intention to hold the shares until it reached to their designated price, it will show less than 30% of total shares must be on the hand of general public. Hence, it will not take long for BRD share price to reach 150p to 200p per share when the herd of buyers comes here.
I have a firm believe BRD days are coming after many years of suffering. Mr. Conitzer, a long-time holder has not been inputting post for a while although there is not much to talk about at the moment.
Indeed... turnover of $15m per annum by second half of this year
BlueRock Diamonds
@_BlueRock
·
56m
Guidance for Q1 2021 is to process 130,000 tonnes, 75% up on Q1 2020 of 74,000 tonnes...
...Production guidance of between 850,000 and 1,000,000 tonnes for 2021 remains unchanged
The only problem is Covid Is back and even worse. Another South African lockdown is possible.
The SP is an absolute steal right now, but we're weeks away from a big rise. The price was depressed all last year due to difficult covid conditions in SA but we've already seen some impressive advances on the mining plan during the last quarter, and if the further advances in production turn out as planned in H1 we should see a 4-bag from this point within months.
Out of all my holdings this looks like the one most ready to bag in the shortest time period - first news is due in the next few weeks with Q4 results, news on the crushing circuit and construction of the new plant. This stock has a very small float so the SP has a tendency to drift for a long while and then surge massively on news...the market is just waiting for confirmation that the planned increases in production are being met.
If you look at the Mcap vs NAV here, the value is astonishing. The company is looking to make a profit (conservatively) of ~$50 million over the next 10 years, on output of $150m+, and the current Mcap is just $7m.
Costs are under control because production is farmed out to Teichmann and all the while the resource estimate keeps on increasing, so there's even more upside on the potential profits to come.
Company is undergoing through transformation improving the fundamentals despite diamond overall market will take time to recover.
Expecting overdue news of mining upgrade possibly starting in middle of the January.
News of crushing circuit commissioning complete
Q4 sales and FY 2020 production update to be expected after mining upgrade.
Expecting BRD to have around $2m cash in hand to overcome any storms that may come throughout 2021 in the diamond market and company itself.
Not to forget the potential of finding high value diamond again and again as Chairman states "We are hopeful that the discovery of three high value stones within a month marks the start of a return to mining higher value diamonds". And he expects prices to recover in 2021.
If all of the above goes well, high probability of rerate will be happening in BRD early 2021. Atleast, expecting share price to be around 140p-160p after the news of mining upgrade, crushing circuit and Q4 and FY 2020 production report.
Even, with BRD share price reaching 160p will value the company little less than £15m. If I am not wrong, the expected resource upgrade of 52% of increase carats alone is worth around $50m and the Company expects to undertake further work in 2021 to prove the continuation at depth of the KV2 section of the Main Pit and to establish the true size of KV3 both of which are expected to increase the resources and the life of mine further.
And when BRD announce few more finding of big diamonds, we can see share price hitting 200p range and above.
Happy to sit tight and see the share the price fluctuates in the meantime.
What a year!! With the brutal global sell off for Equities earlier this year mining stocks got particularly slaughtered as fears for economies throughout the land were under the spotlight. This saw some of the largest UK and international Mining companies lose anywhere from 40%-50% in a matter of weeks.
With that said, most of these losses have since been recovered and now certain commodities are having their biggest moves up for over a decade. What this means for you as an investor is that there are potentially some really good companies still out there if you do your homework, look at their balance sheets and work out the size and scale of their operations, now and potentially in the future.
Precious metals such as gold, silver, platinum, and palladium are all very newsworthy. Industrial metals like iron ore, copper, aluminium, nickel, lithium, cobalt, and zinc are always required as are construction materials such as sand, crushed stone, and limestone, and don’t forget the “Girls best friend” in diamonds.
Investors need to choose mining stocks very carefully. There are potentially some really good companies still out there if you do your homework and maybe these 14 Companies can reward you well over the coming months and should look to be considered individually or as part of a basket of a balanced portfolio.
As our New Year gets under way, there’s still plenty of uncertainty about what the next 12 months may hold for investors, but here at @TMsreach we look at 14 Companies that should be worth following over the next 12 months.
https://total-market-solutions.com/2020/12/14-mining-companies-to-follow-in-2021-part-i/
Ladies - Why not cut out the middle Orangutan?
Just remember - Diamonds are a girl's best friend.
So you know what to do!
Four post's in one day!
I need a lie down.
Just you wait folk's, our time will come!
As a new investor, I appreciate your posts Burton......keep them coming.
Merry Christmas :)
Glad you enjoyed it Alamo55. There will 1000s of @TMSreach posts next year that i will be sharing for guys on here as maybe they are not on Twitter? Ever thought of that?
Merry Christmas....
BurtonD may I remind you that people on bb's mostly input their own opinions not just shotgun repeat what is in the public domain all the time. You are forever putting out TMS reach info, nothing new from you, try to input your opinion for a change.
“…The three investor updates in December represent a game changer for BlueRock Diamonds…”
There’s been a flurry of end-of-year investor updates from BlueRock Diamonds. It owns and operates the Kareevlei Diamond Mine in the Kimberley region, South Africa’s diamond capital and birthplace of De Beers.
Three consecutive investor updates provided festive cheer with news about the discovery of another two gem quality exceptional stones, plus an increased provisional resource estimate has been thrown into the festive mix for the company that is pursuing production, carats produced and grade.
While Kimberley has been home to diamond mines since the 19th century, the ground is far from exhausted and BlueRock’s Executive Chairman Mike Houston sees the return to mining higher value diamonds.
He is impressed not only with the desirability of what is being found on the sorting tray, but the boldness of the board for sticking to its strategy of getting the economies of scale right concurrent with an expansion in operations from 400,000 to one million tonnes per year.
Listen to Mike tell Sarah Lowther about how BlueRock is at a game changing inflexion point, how the business has been derisked and how it intends to progress mine to market initiatives and deliver on Kareevlei’s value.
https://total-market-solutions.com/2020/12/blue-rock-diamonds_december-2020/
BlueRock Diamonds
@_BlueRock
·
20h
The grade of the diamonds mined and processed in August 2020 has recovered materially to 5.1 cpht compared to H1 2020 which averaged grades of 3.0 cpht...
...The grade now stands well above our current internal target of 4.0 cpht.
The mine connected to the national grid and substantially reduce use of the expensive diesel generators...
...The introduction of a re-crushing circuit will result in an expected increase in recovery from 70% to c.90 (additional 1 to 1.5 cpht recovered)
BRD will still continue to get over 300$ per carat. We are close to increasing production by 50%. With cost reduction in H1-21, costs will fall to ~200$. 45000 carats *100$ margin is 4.5m$ cash from operations. Not bad for a 5.5m$ Mcap with no debt. Think it should be possible to reach 350$ carat as well with the Antwerp channel and larger diamonds. Bluerock could easily do a net profit of the current size of the Mcap for the next 10-15year. Looks very promising to me.
News to look forward in December and starting 2021:
- mining upgrade
- guessing diamond to start selling in Antwerp
- commissioning of new crushing machine
- possible big diamond again considering comment from Chairman on today's rns
- Q4 production report where it is expected to be profitable in half 2020
- connection to the national grid for electricity
- and others as we go along.
Big problem is the general diamond market. Not the business to be in atm