Firering Strategic Minerals: From explorer to producer. Watch the video here.
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Started: rivaldo, 19 Jun 2024 07:35
Last post: rivaldo, 19 Jun 2024 07:35
Rockwood Strategic PLC announced their full year results this morning. In it they disclose that CAPD was one of the new additions to their portfolio, and they summarise:
"Capital Limited 3.2% NAV, Market capitalisation £174m
The company's two key founders remain heavily involved and invested in the business they have successfully created over the last 15 years. The company started out providing drilling services to small African based mining companies and, having developed a reputation of best in class health and safety, service levels and efficiency, has gradually built a diversified client base including a number of world's major mining companies. The rig fleet is now deployed across several continents and is complimented by other services, the most important for our thesis being the 'laboratory services' division which is providing leading edge, environmentally friendly assays and sample testing to its clients.
Capital's strong margins, and attractive returns on capital will be enhanced by the strong growth of this division, competitors are valued very highly. Whilst Capital has activities across a number of metals, it still retains a bias to Gold.
We expect further growth in its key projects, realisations from its strategic equity stakes in early-stage clients and an eventual realisation of value in the laboratories business.
The valuation looks anomalous given the ROCE and growth record, its asset base and prospects."
Started: rivaldo, 12 Jun 2024 09:11
Last post: rivaldo, 12 Jun 2024 09:11
PDI announced "encouraging" drilling results last night from Bankan (where CAPD are the drilling contractors), with lots more drilling to come:
Https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02816330-6A1211173
"Encouraging results have also been received from several new areas such as Sanifolon North and Sanikourou. Drilling at Argo will continue to follow-up the best results at depth and along strike, and expand early-stage
drilling to untested areas with good potential.”
“The exploration program at Argo is advancing to the next phase, and we are excited to have commenced transitioning the Fouwagbe and Sounsoun targets into resource definition drilling programs with the resource development team. We believe this will ultimately deliver the first Mineral Resource estimates outside the NEB and BC area, highlighting the multi-deposit potential of the Bankan Gold Project.”
“PDI’s regional exploration strategy is to maintain a steady flow of targets moving through the exploration pipeline and, in line with this strategy, the regional exploration team is extending its efforts beyond the Argo permit. Drilling is underway on the Bokoro permit, initially targeting prospective geochemistry anomalies and artisanal workings. We look forward to receiving the first results from these new areas."
Started: rivaldo, 10 Jun 2024 08:08
Last post: rivaldo, 10 Jun 2024 08:08
Encouraging to see a 107,458 share buy at the full 103p offer right on the bell on a Monday morning. And the bid price is now up to 102.5p.
Started: rivaldo, 30 May 2024 07:39
Last post: rivaldo, 30 May 2024 13:19
Encouraging to see buyers paying the full 103p offer and sellers getting a premium at 101.4p.
Gut feeling only, but it feels like CAPD are on the verge of a breakout upwards. Hopefully it can achieve a big re-rating like TIG's recent run after a similarly long consolidation.
Or perhaps my gut just requires some lunch.
by mark watson-williams:
"capital limited (lon:capd) – mining for better valuation
this is another company that is holding its agm shortly, in the city on wednesday 5th june.
the group is a leading mining services operation providing a complete range of drilling, mining, maintenance and geochemical laboratory solutions to customers within the global minerals industry.
its services include exploration, delineation and production drilling; load and haul services; maintenance; and geochemical analysis.
although the group’s corporate headquarters are in the uk, it has established operations in côte d’ivoire, canada, democratic republic of congo, egypt, gabon, ghana, guinea, kenya, mali, mauritania, nigeria, ****stan, saudi arabia, tanzania and the usa.
analysts david butler and charlie bendon at tamesis partners have a 160p price objective out on the group’s shares, noting that:
“we remain positive on the outlook for a strong operational performance through 2024.
key growth projects in the capital business are ramping well, projects continue to be won with high quality clients and rigs are being mobilised to higher quality contracts.
msalabs is developing momentum, both at their ngm labs contract and their partnership with barrick.
the mining services business has the potential for another big contract.”
the group’s shares have at long last topped the 100p level, closing at 102.88p, and looking very capable of moving significantly higher."
Started: rivaldo, 24 May 2024 08:27
Last post: Genghis15, 28 May 2024 09:21
Thanks, Rivaldo. i only know Rockwood from ST articles in the IC, but they seem a smart outfit, v encouraging to see them pick up on CAPD.
I was at Mello yesterday, where Rockwood Strategic were presenting via the excellent Richard Stavely.
Reviewing their portfolio, he unveiled a new holding...CAPD....
CAPD now represent 3.2% of their portfolio.
They believe the market has missed the fact that Chrysos could be generating £10m+ profit on its own.
He also noted that CAPD were nicely cash-generating and that its kit/rigs backs up most of the m/cap on its own (there's $209m of PPE on the balance sheet).
Rockwood featured CAPD in their most recent monthly factsheet for the first time, but good to see CAPD highlighted at such a public forum.
Started: rivaldo, 28 May 2024 09:10
Last post: rivaldo, 28 May 2024 09:10
More work for CAPD for WIA Gold, who've announced a new drilling programme at Bouafle, where CAPD were appointed as exploration drilling contractors in Q1'22:
Https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02810780-6A1209099
"An initial 6,000m of drilling is planned, followed by an optional second-phase of 4,000m dependent on results from the different targets tested.
Wia Executive Chairman, Josef El-Raghy, commented:
“We are delighted to launch this RC program at Bouaflé as a logical and systematic follow-up on the exploration work previously completed there. Bouaflé is an exciting exploration project in Côte d’Ivoire, which has already demonstrated a strong mineralised gold footprint at significant scale."
Started: rivaldo, 20 May 2024 10:49
Last post: rivaldo, 20 May 2024 10:49
Tthe gold price is up to a record $2,445 as I type. Which has to be good for CAPD's client base and resultant spending and growth plans.
Started: rivaldo, 17 May 2024 10:40
Last post: rivaldo, 17 May 2024 10:40
In the Q1 trading update in April CAPD said re the big Nevada Gold Mines project:
"Material NGM drilling contract set for ramp up through Q2 2024: The commencement of operations at our high-quality contract at Nevada Gold Mines is scheduled for the second quarter with activity increasing progressively through the remainder of the year"
Barrick have now confirmed that it's "officially on track to produce 130,000 ounces (oz) of gold this year":
Https://www.e-mj.com/breaking-news/nevada-gold-mines-celebrates-official-opening-of-goldrush-mine/
Extract:
"Barrick, which owns 61.5% of the project through the NGM joint venture with Newmont (38.5%), is developing and will operate the mine, scheduled to reach commercial production by 2026 and growing to approximately 400,000 oz by 2028 (100% basis). The 24-year underground mine is expected to provide 500 jobs during its construction and employment for 570 people once operational.
More than $300 million of a $1 billion capital budget has been spent on the project which is expected to produce $326 million in net proceeds tax and a further $142 million in gold and silver excise tax for education in Nevada under the new mine tax framework."
Started: rivaldo, 13 May 2024 09:14
Last post: rivaldo, 13 May 2024 09:14
WIA Gold were up another 9% overnight to new highs of A$0.12.
CAPD's holding in WIA alone is now worth £11.6m.
Started: rivaldo, 2 May 2024 07:32
Last post: rivaldo, 2 May 2024 07:32
PDI have announced a successful A$50m fundraising at the excellent price of A$0.19.
CAPD may or may not have invested further, and the PDI share price understandably reverted back overnight to A$0.195.
The good news is that CAPD are the drilling contractor at PDI's core project at Bankan - and this will fund "and accelerate the multiple drilling programs" there:
Https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02802611-6A1205866
Last post: BPat890, 25 Apr 2024 13:12
Wondering if this is attributable to the latest results? Seems to have begun rising before the 15th and gathered momentum after results published. I’m speculating the bullish sentiment in the update leaked sending the price up in the week ahead of results day. Time will tell if recent buyers are in it for the long haul but it’s good to see us above £1 again
Started: rivaldo, 25 Apr 2024 10:51
Last post: rivaldo, 25 Apr 2024 10:51
capd has "further to go" (subscription-only):
https://*************.com/views/74154/capital-limited-q1-update-an-already-winning-share-tip-with-further-to-go
Started: Lesville, 24 Apr 2024 16:59
Last post: Lesville, 24 Apr 2024 16:59
Wonder what tomorrow will bring. Would really like to see some volume here to justify the move upwards.
Started: Lesville, 24 Apr 2024 15:15
Last post: Lesville, 24 Apr 2024 15:15
According to the FT Wia Gold is up 238.16% over the last year. It would be nice to be able to say the same for Capital Drilling. Quoted 98.2 to sell so heading in the right direction.
Started: rivaldo, 22 Apr 2024 07:29
Last post: rivaldo, 24 Apr 2024 11:53
WIA Gold were up another 10.5% last night to A$0.105 - this holding is now worth almost exactly £10m.
CAPD's holding in WIA Gold has risen another 12% overnight (after a successful fundraising) to new highs at $AD0.098 - it's now worth £9.3m:
Https://www.asx.com.au/markets/company/wia
Started: Lesville, 23 Apr 2024 12:52
Last post: rivaldo, 23 Apr 2024 15:30
Yep, great to see buying coming in now at 98.82p.
Hopefully Rockwood are continuing to buy....
Should have said, hope that the bid follows.
Started: Lesville, 23 Apr 2024 12:39
Last post: Lesville, 23 Apr 2024 12:39
Good find Rivaldo. Interesting that the date of publication was the 31st March so probably does not account for the increasing share price of late. Would love to know what is encouraging buyers at these prices. Just noticed the ask has surged to 99p, hope that the ask follows.
Started: rivaldo, 23 Apr 2024 07:36
Last post: rivaldo, 23 Apr 2024 07:36
CAPD have a new institutional investor - Rockwood Strategic disclosed as follows in their recent monthly factsheet for last month:
Https://d1bcjbyi5yiron.cloudfront.net/app/uploads/2024/04/Factsheet-Q1-2024.pdf
"We purchased two new holdings this quarter.....Secondly we bought Capital Limited. This business has grown consistently, building a world leading position in the provision of drilling services to Mining companies. Asset rich, it has, over time, diversified by geography and client, breaking into the majors, such as Barrick. It has an unparalleled safety record, and been developing a Laboratory services business which is totally ignored in the valuation of the shares on a ‘24 PE of 6.2x and EV/Ebitda 4x. Equity owning, proven management should address this in time. We believe its ‘hue’ of resources has created a blind spot for generalist investors."
Started: Lesville, 18 Apr 2024 14:49
Last post: rivaldo, 18 Apr 2024 23:52
Indeed Lesville, a very encouraging performance today given both the usual trend on results day and especially going ex-div too.
Interesting little 8,776 buy at 95.4p reported late as well.
Thanks Rivaldo for posting Tamesis investment case guidance and how you see the appreciating gold price benefiting Capital Drilling. Let’s hope that the gold price remains strong for sometime yet.
Somewhat surprised at the strong share price today especially as the stock is now ex dividend, perhaps some are now beginning to realise the hidden value here.
Started: rivaldo, 18 Apr 2024 11:44
Last post: rivaldo, 18 Apr 2024 11:44
Tamesis Partners reiterate their 160p target price and forecast 18.7c EPS this year, or exactly 15p EPS.
They summarise:
"Investments.
Total value of investments (listed and unlisted) was $51.7m as at 31 March 2024 up from ($47.2m) at as 31 December 2023). Strong growth in the investments over the quarter, driven by the gold rally as a majority of the investments are gold companies (namely Allied Gold, Predictive Discovery and WIA Gold). Predictive released their long awaited PFS this week, and WIA announced an updated MRE with a 63% increase in contained gold at their Kokoseb asset in Namibia
• Outlook.
Revenue guidance has been re-iterated at $355-375m. We expect strong improved performance across Drilling and MSALABs, while Mining is ticking along as expected. The Sukari kit has the ability to be redeployed and deliver step changes to the P&L, while the elevated commodity prices sets the scene for further potential drilling contracts. We maintain our current revenue estimate of $358m.
Investment Case
We remain positive on the outlook for a strong operational performance through 2024. Key growth projects in the Capital business are ramping well, projects continue to be won with high quality clients and rigs are being mobilised to higher quality contracts.
MSALABS is developing momentum, both at their NGM labs contract and their partnership with Barrick. The mining services business has the potential for another big contract. The company is trading on EV/EBITDA and PE multiples for FY24 of 2.4x and 6.2x, and for FY25 2.2x and 5.4x, while delivering a dividend yield of 3.4%. We remain comfortable with our 160p PT."
Started: Lesville, 18 Apr 2024 08:47
Last post: rivaldo, 18 Apr 2024 09:20
Agreed Lesville. Today's update shows a steady as she goes Q1, ready for the big contracts commencing this Q2 at Belinga, Reqo Diq and Nevada.
Good to see guidance for the year being reiterated, and ARPOR increased markedly to an impressive $202,000. Excellent year on year growth at MSALabs/Chrysos and at Mining offset a little Q1 weakness in Drilling.
The picture for this quarter onwards remains excellent, with Q1 generally being a weaker quarter, whilst traders who bought recently will no doubt consider this quarter's results weren't exciting enough for them.
Stifel state "1Q24 Sets Foundation for Strong 2024".
But subscription-only so no further detail:
Https://twitter.com/research_tree/status/1780851311400858091
In relation to the rising gold price, CAPD will benefit from not only the substantial additional revenues accruing to mining companies, which will benefit mining production expansion programmes and encourage drilling for new resources, but also the increased certainty as regards exploring in new geographies and regions.
Not too bad with reiterated yearly revenue. Also ex dividend today so market reaction not at present repeating the usual drop.
Started: Lesville, 17 Apr 2024 15:47
Last post: Lesville, 17 Apr 2024 15:47
Hi Rivaldo,
I am just as keen as you to see the increase in share price but fail to see how it can be linked to an unrealised asset. The price of gold could possibly fall just as easily as it has increased.
There have of late been some sizeable sales/purchases quite often above the bid/ask price which does beg the question why. Hopefully we will continue to see some increase in the share price.
Started: rivaldo, 17 Apr 2024 14:28
Last post: rivaldo, 17 Apr 2024 14:28
Hello - 50,000 shares just bought at 95.34p, well above the 94p offer. Very keen.
Hardly surprising with the gold price now at $2,387.
Started: Lesville, 9 Apr 2024 10:58
Last post: Jlite, 10 Apr 2024 16:44
Hi Shareminator
If you go back to 2019 then yes there is growth. But what about the last three years...
2021 revenue $227m Net profit $37m EPS 15p
2022 revenue $290m Net profit $42m EPS 17p
2023 revenue $318m Net profit $36m EPS 14p
Now I get that some of this will be investment, ie Capex. But personally I am disappointed with the drop in profits and EPS in 2023. 50% increase in revenue with zero increase in net profit or EPS. So we are larger but no more profitable. And the dividend is also flat in 2023 after small increase in 2022. None of this is a good trend IMO.
I stick to my summary, they need to show better bottom line growth, to sustain an increasing dividend, or I am going to start selling.
JL
Fair point, you're right. What's your view on the persistent undervaluation and lack of institutional interest? I'm holder, and not bearish on the stock, but do appreicate open discussion. I don't think they can "spin-out" MSALabs as, as far as I know, they do not own the IP and are only acting as distributor/operator. Chrysos is also very overvalued to consider acquiring it. They pay a small dividend and have high ongoing capital requirements through maintenance and reinvestment.
One possible thought on what could be causing the undervaluation is the cyclical nature of mining. Although recent utilisation rates have been increasing and are high (I think), compare them to 2015/2016 when they were a lot lower. Perhaps insitutions worry about this playing out in future, with CAPD being left with lots of surplus underutilised costly equipment therefore reducing returns. Difficult to see if one subscribes to the "commodity supercycle" or "age of scarcity" theses, as well as the general need for increased macro capex at a global level.
Who are these jokers below trying to fool?
2019 FY results: Revenue $115m, EBITDA, $27m, Net Profit $10.4m
2023 FY results: Revenue $320m, EBITDA, $92m, Net Profit $38m
An almost three-fold increase in revenue, a three and half times increase in EBITDA and an almost four-fold increase in net profits does not indicate a "lack of growth in profits".
Great points. A lack of insitutional interest (assuming that them simply being unaware is not the sole reason) suggests unaddressed or unavoidable permanent weaknesses in CAPD's underlying business model or irresolvable risks. I think your second may speak to these underlying weaknesses; mining services must be highly commoditised resulting in the worsening margins, high amounts of capital will always be required for re-investment and maintenance (poor cash flows for investors for ever) and a high cost of capital now and in the future (although CAPD is using internally generated cash).
CAPDs high cost of maintenance in its fleet requires it to be a "price-taker" in a well supplied market otherwise it would face significant capital costs, and the larger this fleet - and competition's fleets - the more pressure to race-to-the-bottom on price. On the other hand, CAPD has high (I think although not sure of any benchmark) utilisation rates, suggesting there should be wrong for price increases and enhanced margins. The only reason that they can't do this, must be competition?
The contract tendering process, similar to all, also has similar flaws for companies that "win" contracts ( in this case being given contracts due to giving lower prices that cause problems further down the lines).
Hi Lesville
I agree with this. Something just doesn't sit right.
I am minded by two things: firstly, when this was pitched by a PI to institutional investors a couple of years back they were unimpressed, despite the healthy growth and blue chip clients. So clearly there is little appetite for the share with institutions as you say.
Secondly, the relative lack of growth in profits over the last few years despite revenue rising strongly. It shows their lack of pricing power and thin net margins. The issue appears to be in the large sustaining Capex required to keep their fleet up to date. I remember a comment below that basically said - impressive growth, but not a lot of cash left for shareholders to benefit from (I paraphrase). This, to me is their biggest challenge, and the reason they are still under £1.
Growing revenue is one thing, growing profits at a similar rate is what we need.
Having said that I am still holding on, with MSALabs potentially the jewel in the crown, there is still good upside from here.
JL
Started: rivaldo, 9 Apr 2024 07:38
Last post: rivaldo, 9 Apr 2024 09:13
CAPD's investment portfolio is now worth $60m, up from $47.2m at the start of 2024, according to darlocst as posted elsewhere.
This backs up 27% of the current m/cap - even with the core drilling and labs businesses booming and on a P/E of just 6, an EV/EBITDA of a ridiculous 2.5 and a 3.4% dividend yield.
With the gold price now up to almost $2,350, three of CAPD's larger investees rose nicely yesterday.
PDI were up around 6.5% to new recent highs, Allied Gold up another 4% and WIA Gold up 6%.
A very rough calculation puts CAPD's overnight gain from these movements (allowing guesswork for the Allied Gold holding) at say £2m.