Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I hope so because these quarterly results read as mildly disappointing, esp the cash position. Nonetheless, I continue to see this as a well-managed company doing all the right things and with the medium-term potential of the Bilboes mine. Diamond hands here.
Considering what they've achieved in the past six months - closing the Bilboes deal, acquiring Motapa...plus the increase in POG, I'm surprised the SP has not performed better.
Still, I'm planning to hold, and increase my holdings in the dips. This will surely re-rate as Bilboes goes online and their total annual production ramps up from 80,000 to >200,000 oz. A fair while to wait maybe, I don't think a timeline has been put on Bilboes yet but I'm sure it will be announced fairly soon as I think they're due to complete the feasibility study anytime now?
Share price consistently declining these last few days - I reckon one of the larger shareholders are selling.
Performance of CMCL in 2023 well below a typical gold miners ETF. Disappointed.
Been a while since I was invested here way back when they were drilling the central shaft, lost my nerve when the currency had it's issues, however the company still managed to perform through all the trials and tribulations of Zim.
So with the expansion into other areas took advantage of the sp decline.
Peleliu, I agree with JMUK26. CMCL has a fantastic track record of achieving and often exceeding guidance and they've stated that they have resolved the issues and the overall guidance for the year still stands. I've no reason to doubt them.
If you've ever owned HUM you'll know what loss of confidence in a miner's ability to forecast is about!
In what way Peleliu? CMCL management have set realistic yet challenging forecasts since I've been a holder and in that time they have done nothing but meet or exceed those targets. This was the first miss and the reasons for it were explained (fairly easy fixes), no excuses were made. Providing they have resolved those issues as stated, we should be back on track next quarter. The drop here is in anticipation that subsequent quarters will be affected by the same issues, but I trust the management that say they are resolved and think all will be good. The fall is overdone IMO.
I am beginning to lose my confidence in Mark's and the team's ability to forecast
12-Apr-2023 09:04:50
** Brokerage Liberum sees acquisition potential for smaller gold producers in 2023, as consolidation in sector intensifies with Newmont Corp's NEM.N $19.5 bln offer for Australia's Newcrest Mining NCM.AX being the latest
** Says producers such as Caledonia Mining CALq.L, CMCL.N and Shanta Gold SHAN.L will likely attract "attention" from Chinese or Moroccan buyers such as Managem MNG.CS
** Expects CMCL and SHAN, up 38% and 29% YTD, to continue to outperform in 2023
** Believes Centamin CEY.L could look to merge with a tier II/III peer like IAMGOLD IMG.TO and Perseus Mining PRU.AX
** Liberum, however, believes UK-based Endeavour Mining EDV.L, EDV.TO is unlikely to make a second bid for Centamin as it sees little value in the acquisition
** Up to last close, EDV up ~23% YTD
(Reporting by Roshan Abraham)
Good to hear that the placing is going well and there is no shortage of investment to fund Bilboes.
"St Helier, March 31, 2023 - Caledonia Mining Corporation Plc ("Caledonia" or the "Company") announces that, further to its announcements on March 24, 2023 regarding the Fundraise (as defined in the announcements), it has decided to extend the closing of the Zimbabwe Placing (as also defined in the announcements) from 12.00 p.m. on March 31, 2023 by up to a week due to a higher than anticipated level of demand from existing and new Zimbabwean institutional shareholders who wish to participate but require extra time to attend to their own administrative requirements. It is expected that, due to strong demand from existing Zimbabwean institutional shareholders, the Zimbabwe Placing will raise in excess of US$3milllion. A further announcement will be made next week regarding the closing of the Zimbabwe Placing, the funds raised and the shares and Zimbabwe depositary interests to be issued pursuant to the Placing."
I don't think anyone here has a problem with the raise for growth, it just seemed a little painful at the time because the raise was only for about 6% of mcap, but SP (temporarily) reduced mcap by significantly more than the value of the raise!
No matter, I took advantage and topped up my holding by a little more than the dilution at a good price, just as I did when the Bilboes deal was first announced. The SP has already recovered so I'm pleased.
I look forward to the next significant news
Don't see what the problem is raising money for growth. What they have achieved out of self generated resources is commendable and it is good that they pay a dividend.
Thanks Fr Jack
Yes the raise was not completely out of the blue. Mark has suggested that a phased approach to developing Bilboes would minimise shareholder dilution in that much of it could be funded organically from the revenue from Blanket and from processing oxide at Bilboes. However he also indicated that even with a phased approach some additional source of funding may still be appropriate.
Re-watching the first two videos (which I did watch when first released) has reminded me that end of Q1 23 (ie now) is when he expected the Bilboes feasibility study to be completed, so I think the timing of the raise is no coincidence!
I'm also very encouraged that they acquired Motapa,
Mr Bismarck,
The company did indicate it would be looking at further funding strategies a few months ago as indicated in the following (so not out of the blue):
https://www.youtube.com/watch?v=OE1Fjkb2ahA -- check out from 3.30 minutes onwards
https://www.youtube.com/watch?v=ZxTx3hB0W-g -- check out from 5.30 minutes onwards
- presumably - as you indicate - to allow future dividends to be maintained : suggest the company cannot continue to invest using future cash flows alone whilst paying dividend (as they have done so during Blanket expansion) - it is now multiple assets requiring feasibility studies and hopefully future infrastructure investment when new assets pass BFS/DFS - requiring considerable more external funding than future cash-flows allow.
The company/CEO appears to provide openly enough information to indicate exactly where the company is heading (and how it is expected to fund its way) and historically over the last few years have set statements on production targets which were achieved. So when the CEO say they expect to be mid-tier miner 250-500koz/year (stated in link below) in maybe 5 years, and based on the historic production target statements, then there's probably little reason to doubt this goal either.
https://www.caledoniamining.com/media/ -- check out 06/01/2023 - 2.30 minutes and 7 minutes.
Also - as Bilboes is open pit - expect AISC for the company overall to be lower.
So where would the company be with (say) a production of 350koz/year - MCAP of say £600M+ ?? . . .what the share dilution would be by then can be debated - but I would suggest it would be small compared to future presumed revenues of $700M and possible EBITA $250M for a 350Koz annually.
Taking a Del-boy analysis of CMCL: currently, a nice little earner : this time next (5) year(s) we'll be millionaires !!
Something to hold onto - may look nice in a dusty old SIPP.
Trek, divi cover is >4. The company is highly profitable with a foreword P/E of 5.4 If the divi was to be reduced or suspended it would be to fund growth. However I think the raise announced today shows that the company has chosen a different route to funding. The SP suffers either way in the short term...but will soon recover IMO
Topped up at £11.50 today, average still <£10
I'm always slightly annoyed when raises happen and destroy SP short term. Such is life, just use the opportunity to top up and wait for the recovery.
This does seem to be an extremely competent junior miner. What they say they'll achieve, they achieve, or they do better, year after year.....
Makes me very suspicious of the dramatic price movement earlier in the week: send it up 15% so they can knock it down 12%...gives you a discounted capital raise.
I've been in since £5.50 so will continue to hold. This is BY FAR my best performing miner: practically everything else I hold is down.
Got placing away at good price making most of recent run.
I have been on sidelines here for ages wondering how sustainable the divi is. Looks like it’s held but could be a future short term play off against growth. If your in at 900p it’s a good price to hold for future but not sure I will pay 1100p.
Usual caveats
Trek
This share will go down to 500p.
Indeed, including a £48K buy at £13.25
Other juniors up too on the rising POG but I've seen no others rise by 16%
But something is clearly happening.
Thanks TM, it would seem so.
They were mentioned on the money page of the Daily Mail website about shares to take advantage of the strong gold price. Don't know if that has generated some interest.