Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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So a little digging around... sales tied to the real. So, what used to be $50 per tonne is now more like $40. At the same time, costs (at 50ktpa) were $18 per tonne now with a higher production will be closer o $10. Profitability was at 40,000t and will be maybe 42,000. So... assuming they meet a target of 80,000t, that’s approx 38,000t pure profit $30 per tonne. So we should, after all expenses, wages opex see the first solid $1M usd hit the bank balance. No need to fundraise ever. If they get to 100kt this year that c$2M. Huge re-rate coming
Yet in a RNS only 365 days ago they stated this:
'Assuming business as usual on a go forward basis, and continued investment into the business, this position is sufficient to sustain Harvest for over two years.'
And in the same RNS they referred to a cash position of 'of approximately AUD$9,732,000'.
It hasn't gone well has it?
Only 366 to go!
In the last Q&A the board said that no fundraising required for at least the next two years (Sep 2022). By then, the company will be making a significant profit with no need for further expansion or investment . So... no dilution moving forwards. “ Is the Company still satisfied that there are sufficient funds for the next two years?
Yes, we believe we have a healthy cash position; as per the trading update released on 30 September 2020, as at 30 September 2020 the unaudited cash balance was AUD$3,723,397 with a positive working capital position of approximately AUD$4,861,723”.
Cheers Swingy
Still no answer to the Real vs dollar pricing question. I’m hoping to hear back soon. Will keep you posted.
That’s the game we play. We have a product. We can sell it at a significant profit. The share price doesn’t reflect this fact. Get in now or wait for a fundraising which may never happen.
It's just a shame that Harvest didn't report cash figures in January.
At a guess, i'd assume cash figure has been reduced to maybe $2m AUD, with $1m+ AUD receivables.
Q1 and Q2 are cash burn months too. If Harvest exceeds sales and ends 2021 with $4-5m AUD cash, that'll be an extremely good result.
I for one, am not too optimistic for Q1 results.
My thoughts are whichever leads to the most profit. I don’t think that halting the price would double the orders. KPFertil is already considerably cheaper than the alternative fertilisers.
Really? Youd rather wait a few years to get to 300kt rather than do it this year? The broker had it right originally, expect to sell for lower to get the market penetration, then walk up the price. ****ing about at 80kt just turns off investors.
I am personally grateful that they didn’t sell at a lower price. The fact is that it’s not the economics that have hindered sales, it’s the farmers needing to see with their own eyes that Kpfertil really can give the claimed results. Financially it’s a no brainer once you’ve taken into account leaching, composting, soil quality and long term effects.
Now the evidence is out there. We have advocate farmers and as a result sales are gaining traction, with 100% of customers returning. The result is compound... it will “snow ball”.
In 10 years time, 100 years mine life and a regular dividend will make buying shares now seem like the best investment ever.
Where did that classtwat come from? Quisad of course!
just where did you come from smalleyus and why don t you go back where you came from .. another quisad is not what this board needs, someone desperate for the share to fall when it s looking more secure than ever
There is over 500kVA of 3 phase electrical power required to operate the plant.
Work it out, 500kVA per phase, per unit rate at 40t/hr, long start-up period, intermittent operation, running empty etc.. what a carp installation they bought. I doubt $7/t would cover that alone.
Upwards of 30 local staff, work that out based on minimum wage only, yes there is one!
Sales staff consultancy.
Bring back the one mill and one conveyer then you might get close.
But really we are talking about Opex, just Opex.
$7 per tonne by 40,000 t wouldn't even cover the Chairman's fee.
Your in deep, you lost and your still dreaming.
Yep which is why I've said before I dont get why we dont sell for less and make the profit and cash now. Dont care about a 100 year mine life.
If I re do my calculations based on $30 profit per tonne that comes out at 19p per share instead of 25p. I’ll settle for that in the short term. ;)
$7 opex wont be too far out. Admittedly that’s for higher throughput but then again with a weak Brazilian Real, opex will be less.
So no profit at 7$ opex per tonne? Good research
Taking your time?
A recent cost comparison provided by HMI showed 7 tonnes cost R$1.470,00 meaning R$210 per tonne, circa USD$37 p/t.
After Opex costs there wont be much left for a profit, still at least the asset could be profitable.
So my valuation for HMI is 0.
That’s a great point. I believe that the minimum was $50. The price was tied to the US Dollar rather than the real. I will get clarification and post on here.
Swingy I don't think your too far off the mark. My only gripe would be that Harvest have always stated that they sell the product for 200 real a ton which equates to $36. Back in 2017/18 they stated $60 but since then the real has depriciated a fair bit and have been using the 200 real price. For sure operating costs will be cheaper too, the depriciation helps that. Then obviously we have to convert to pounds for any PE. I have sent some emails asking the company to try and state if the 200 real price is flexible and as foreign imports become more expensive if they have moved this up. No reply as of yet, may be worth sending them an email too, to try and find out. IMO opinion though we are very much on the right track and if we manage to grow our sales like predicted, I believe we will be rewarded. Current risk/reward seems very attractive to me IMO
£1 a share = £186M market cap.
400,000T full capacity = $18M profit per annum with over 100years of resource. More profit than that when you add inflation to the equation. You only have to look at the fertiliser price graph to see the potential here. £1 might be a pipe dream but it is possible.
Thats a reasonable price for just one project on a de-risked company.
Going buy those calculations when the existing plant is running flat out the shares will be worth about 75p to a quid each
Think you'll have to up the breakeven this year because of additional sales staff, should get an indication by Wednesday of any pre orders for this year. I still think 80kt is conservative, should be aiming for 150 this year. And be interesting to see if the 25kg bags have been selling yet. Can guestimate a valuation next week! Cant see the investors letting this go for less than they bought in at which was 20ish?
I’d appreciate anyone posting their thoughts on the valuation of the company. I used to be very bullish but I believe it’s purely sentiment that has held this back thus far.
Breakeven at 40kt. That means if we hit the 80kt target we have 40kt of profit. Let’s say we make $40 profit per tonne. That’s $1.6M profit. P:E of 7 = 11M market cap which equates to 6p. I’d like to say more but this still isn’t bad for 12 months. The rise to 6p will bring back positive sentiment... and I will use a p:e of 12 for a target in 2022 of 150kt. = 25p.
I’d appreciate thoughts on this. Let’s face it, if they hit 80kt and give a new target of 150kt, you’d expect new highs. 25p doesn’t seem like much but that could literally be getting priced in after q1 results next year.