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Chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.mcmining.co.za/all-categories?task=download.send&id=1773:tennyson-equity-research-reportl-mc-mining&catid=107
Extracts from the report:
'We initiate coverage with a BUY, backed by a risk-weighted, DCF-based Target Price of 21p/shr – offering 2.8x upside to the current price. This TP uses our base-case long-term coal-price assumptions: at current spot coal prices and FX, our equivalent risk-weighted valuation would rise to 112p/shr.
COMPANY VALUATION Our 12-month Target Price (TP) for MCM of 21p/shr is based on a sum-of-parts valuation, including discounted cash flow valuations of its three principal assets (risk-weighted where appropriate). Corporate overheads are included as a negative, on a discounted cash flow basis, and we also allow for net cash/debt at 30 June 2023 (adjusted for the existing IDC loan – see table footnotes below), in line with the start of the discounted cash flow analyses. Our 12-month TP includes a risk-weighting that limits the Makhado project to 70% of its full value, to take into account its undeveloped status (both in terms of execution risk and the potential dilutive effects of its remaining funding requirements (details p7). We expect to reduce this risk weighting as the project advances, and as additional funding is secured. Our valuation is strongly related to prices: at prices prevailing for large parts of CY2022 (US$400/t for premium HCC and US$300/t for API4), our TP on the same risk-weighted basis would rise to 256p/shr. These were abnormal prices, but significantly elevated prices in the structurally volatile coal market are always possible when events dictate (sensitivity analyses on following page). '
Https://www.mcmining.co.za/all-categories?task=download.send&id=1773:tennyson-equity-research-reportl-mc-mining&catid=107
21p price target…
A interesting read on MCM main web site.
Thanks Bozmo, I truly hope you are right. After 10 years of suffering I would finally like some payback.
Thank you for the update Bozmo much appreciated
Would you say that their unwillingness to communicate before this most recent update could be cause to speculate? Over the years they’ve been very transparent with you and I assume as a long term shareholder (and a very proactive one at that) that you’d be known the them. I recall you would always get some kind of useful insight when you’ve reached out them before.
I contacted the company recently, but they couldn’t speak with me before the quarterly update is released. If history is anything to go by then this should be released on 31st October. They told me to go and read the last quarterly report again and previous update on Makhado.
From last Quarterly report:
“The managed tender processes to select the outsourced mining, plant and
laboratory operators also commenced during the quarter. We are excited to have strong contenders
to be our partners and these processes are expected to be completed during Q3 CY2023.”
This led onto “Commencement of construction in H2 CY2023” with the first coal expected 18 months from commencement of construction.
I also note that this quarter Vele should be up to full capacity, producing 60,000/t per month.
Hopefully now we begin to see some significant news flow and action. I have a call with the company after they publish the quarterly results, then we have the AGM. Coal prices are higher with the market still short. The Israel-Hamas situation as well as cold weather should keep energy prices firm in Europe. I still believe we are a behemoth, ready to explode.
Interesting Comparable...
India stock market: Coal India share price (CIL) has gained more than 36% since end August and has scaled fresh 52-week high on Tuesday. The company remains in the spotlight on rising production and supplies while higher international coal prices also mean that the company’s realisations open market supplies to non-power sector will also improve. High dividend yield remains another key factor for higher investor interest in Coal India.
https://www.livemint.com/market/stock-market-news/coal-india-share-price-scales-52-week-high-on-improved-volumes-and-blended-realization-outlook-11697519648542.html
We should start re rating soon. Coal is flying and I expect it to keep moving north for a while yet.
'European coal prices tracked the gas market and were supported by restocking at generation sites. This has now begun in earnest and drove port stockpiles to five-week lows.
"The recent surge in spot coal prices is in conjunction with global commodity markets as they react to the dual threats to global oil and LNG markets on the upheaval in the Middle East and the renewed threat of strike action at Australian LNG suppliers," S&P Global Commodity Insights' analysts said Oct. 11.'
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/electric-power/101323-european-gas-prices-jump-as-geopolitical-risks-trump-fundamentals
Https://www.reuters.com/markets/commodities/indian-steel-firms-plan-price-rises-coking-coal-costs-surge-2023-10-06/
NEW DELHI, Oct 6 (Reuters) - Indian steel companies plan to raise prices of various grades of the alloy due to rising import costs of coking coal, especially from major producer Australia, officials at four domestic mills said.
Steel mills are likely to raise rates by $25 to $50 a metric ton by December, said the officials, who did not wish to be named as they are not authorised to speak to media.
Prices for Australian coking coal have jumped 50% to over $350 a metric ton due to factors such as maintenance outages, lower than usual supplies from Queensland, and a slower train network, Banmeet Khurmi, a metallurgical coal analyst at London-based CRU, a commodity-focused research group, said.
When you look at the amount of volume Cgo and Ben’s creek have had over the last 18 months and then you see how little volume we have here it seems silly.
The assets Mcm have with 2 producing assets with makhado shovel ready and with only a 30 odd million market cap compared to the ones mentioned above don’t compare.
There is going to be a stratospheric rise here when funding is announced.
Https://www.news24.com/fin24/companies/coal-miner-mc-mining-cuts-loss-as-marketing-deal-gives-it-access-to-lucrative-global-market-20230921
Encouraging comments...
The GSP mining licenses were granted in 2018, 2019 & 2021, however it means nothing if you are unable to mine due to lack of finances, besides that there are many other obstacles to climb before GSP ever becomes a viable concept.
Https://www.miningweekly.com/article/mc-mining-revenue-nearly-doubles-2023-09-22
Within the year end report there is confirmation that the 3 Greater Soutpansberg Projects have been granted mining licences. Is this not a new milestone for the company. 7 billion tonnes of coal reserves now with mining licences granted.
Have I missed a previous RNS that announced this?
There has also been a significant reduction in the losses by 79% and multi million investment on infrastructure to develop the current projects.
In my opinion the company has made significant positive moves.
Yet another dismal performance, year after year the same indifferent reports no matter who is running the show. If Makhado does not get off the ground soon (this year) we are sunk.
As far as I understand there is no minimum price per tonne on Vele production sales figures and the income was set per tonne produced.
Therefore the income should be a fixed rate to the company purely based on the tonnage produced from the mine by the third party operator/contractor.
Hoping to see more blue tomorrow.
As mentioned vele should be up to 8 off million a year now. There was no mention of $120 dollars as far as I’m aware either. That being said coal prices are moving north now also.
This could be a very good run we go on now
Were looking at mining 60,000 tons p/m, but prices were stronger then, 7.2 million dollars per year.
4. LCC will earn R200/t (excluding VAT) ($11/t) for each tonne of saleable coal produced.
LCC=MCM, don't remember any £120 price payment plan, but may be wrong.
Hi . i believe we only get money from vele sales if cc price is over $120!
so ......
Will open up today. Remember we have 22 million in the bank probably much more as Vele should be at full production making a further 8 million a year profit.
Sleeping giant
I have heard through the grapevine they are busy tweaking the feasibility study due to the latest findings (increased coal reserves). So I would expect the next news release will be related to that (and hopefully funding).