Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Morning rugs, I believe your 3p average should hold you in good stead, especially if the 50 million cap mentioned yesterday is forthcoming in the next 6-12 months, followed by the 75-100 million cap down the line seems plausible based on the market not having taken in to account the cashew facility.
I missed the boat averaging down here, but still very happy to hold at these levels.
Re the capacity of the mill element. On the whole we have, I believe, a very good BOD. There have been some noteworthy mistakes but they have rectified them in a timely manner and hopefully lessons were learned from that.
The market has a very long memory though and you rightly mention the low current SP. That is almost certainly a legacy of past mistakes. The phrase once bitten twice shy comes to mind.
We remember with fondness the likes of troublingtimes and fundraiser222 (along with their many puppet accounts). For all their nonsense, they were right to bail out at twice the current SP several years ago. To get those sort of investors back on board, not that we necessarily want them but beggars can't be choosers, to get them back on board means a rebuilding of trust.
It is difficult to build trust when we are being told something that we know not to be true. Even more so when that wrong is questioned and doubled down on.
All of the old rns’s have the 70k figure, it’s still on the website as 70k, but on new correspondence we have this arbitrary lower number.
Would be interesting to hear your thoughts on this and hopefully from other long term holders.
jk400. Many thanks for all your work. Both you and FK1 have always had this bee in your bonnet about the production capacity......I will only start worrying when they get anywhere near 50,000 tpa cpo or 200,000 tpa ffb.
The share sale in mid June was for 7.8 m so perhaps a little bigger than what we both have. What surprised me at the time is that whoever sold got it away without disturbing the market price so I thought it was a broker repositioning but LM never came back on this.
My last purchase on 21 Sept at just under 5p was my 68th ! but I have sold all the shares I bought from Feb 2014 thru to mid 2018 , taking considerable losses, and bought back later to average down to under 3p at present. The current price just seems so wrong to me but as DKL is by far my biggest holding already I am reluctant to buy more just in case the company does go tits up ! rgds
rugs re the sell off, no news sorry. I assume just the usual boredom or maybe someone who bought in at the right time when we were at 1.7p or similar?
I myself bought another chunk earlier in the year against my better judgement and self-imposed buy in point of 17p. The conference call was quite upbeat I thought. Lincoln was talking about market cap doubling within next half year or so and then onwards to 75-100 million from current level of 25 million.
The answer to the 60k versus 70k annual production capacity I thought was somewhat bizarre. I will need to go back and listen again to the recording when it appears as I was somewhat taken aback whilst listening live. We may only ever reach 55k-60k per year, but why has there been no explanation for this anomaly?
Do we forward sell products?
No, we don't. Prices we sell at are essentially fixed at the start of each month. We haven't used hedging tools.
Broad question on cashew tonnage.
Already answered in the slides.
Can you comment on how cost of cashews is recovering from the fall last year?
Risen about 25% in last 3 months, so we've only been purchasing raw materials so there's a potential in our favour. (Sounds fairly small fry until next year when we get going).
Timing of third commodity?
They are leading to one in particular. In terms of timing, so much focus at the moment of high palm oil pricing and cashews at the moment. Conserving funds, so no investment in 3rd comm. for a while.
What is the plan moving forwards re dividends?
First priority is to bring debt levels down before any dividends. They would like to do, but growth and diversification first.
(60k tonnes versus 70k tonnes mill size question is next...)
Q - "Lincoln, there appears to be some confusion over the size of the palm oil mill, is it 60k tonnes per annum or 70k tonnes? The RNS's now state 60k, but used to say 70k."
A - "I would consider it as 60k tonnes." "We should stabalise in time at 55k-60k tonnes."
(That raises more questions than it answers)
Share price?
We've been slightly overlooked over the last 6 months. Seeing more and more news on the food side.
Interviews with Crux upcoming fairly soon, more commonly known to us on these boards as puff pieces.
More questions coming through, but they've run out of time. They will reply as necessary outside the conference call.
Closing comments.
Record half year.
CPO price materially higher, 4 months away from high season starting again.
Cashew business larger than palm oil, step up in profitability.
Next 6-12 months where DKL can break through a business that moves up to 40-45 million market cap.
Concludes.
Thanks JK400 for posting. Did we ever get to determine who was behind the selling of millions a few weeks back ?
Equity raise ?
Thanks again your news.
Conference call highlights for those unable to listen live or if you missed it. Usual caveats and DYOR.
Recording of presentation will be available.
New style of conference call this time.
More of a Zoom style of meeting, live video of Lincoln.
Shai Kol won't be attending, he's on a flight to Cote d'ivoire so has been excused.
They are allowing live questions this time, unlike in the past.
Introductions for those new to the company, nothing we don't already know.
Progressing through usual slides.
H1 results, more detail later.
(Liking this new style of conference call, much more professional.)
They are doing some maintenence work on the empty fruit press action at the moment, in order to move extraction back to traditional levels.
Talking about equity raise and bond facility now.
"Probably the strongest position we have been".
Now discussing global prices, logistics challenges. Before Covid there were already low stock levels of palm. $1285 per tonne as of this morning.
"Potential, super high season coming up early next year".
Major producing countries, Indonesia/Malaysia supply continue being constrained over years to come".
Potential for even better H1 2022 than 2021!
Re cashews. It's been a slog recently, challenges sourcing raw materials and logistics for builing. First production within 50 days. Key milestone announcements over next 1-2 months. Scale up to full production in new year (February?). 3 or 4 critical months ahead of us re commissioning.
2 week old photos of cashew facility. Equipment in place, lot of room in warehouse because of starting out at 10k tpa with capacity to increase to 30k facility.
Processing 10,000 tpa of RCNs has the potential to generate 13 million euros in sales of whole / broken kernels.
30,000 tpa has potential to generate > 40 million euros in total sales based on current prices. See page 14 of presentation.
Social and Environment slide. Relationships with smallholders. School/Hospital renovation, water supplies. Very good.
RSPO certification now working through audit points. Call in next 1-2 weeks to see where we are in terms of readiness. We believe we are ready for them to visit and are trying to book the certifier to visit. "Very close to the finishing line".
Next 6-12 months.
High season starting in Mid January this year!!!
Possible improvement in extraction rate and empty fruit press.
Cashew key milestones of the company it will drive material step almost immediately from next year. 2-3 years time, stronger contributor than the palm oil operation.
Still looking in to other ventures to grow and diversify.
Concludes comments and now moving on to questions. Will follow...