Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Can anyone shed any light on what the sales price into China would be? In the past few weeks/months I've seen a few posts/tweets mentioning import duties etc. with some suggesting this to be in the region of 10-15%.
If this is true then surely the change from majority of sales going into the U.S. historically but now into China wouldn't have happened as US/EU only lags China by a couple of %age points!?
Are there any duties into US/EU/ROW?
Anyone care to confirm or correct my back of fag packet calculations please.
I've based numbers on lower end production & higher end costs guidance so these should hopefully be minimum levels. Have assumed add'l (admin/wages etc.) cost at $5.0 (believe BBN calculated these at 5.50 a few backs but XR has moved a bit since so reduced to 5.0. Obviously production may not reflect sales, Q1 numbers were quite a bit different. I've used an av selling price of 42.5.
Vametco
Prod - 2,300 (Q1 395, balance 1,905)
Revenue Q1 @ $31.0 - $12.2m, Q2-4 @ 42.5 - $80.9m = $93.1m
Costs - $29.2 (24.2+5) = $67.1m
Profit - $26m @ 74% = $19.2m
Vanchem
Prod - 1,100 (Q1 293, balance 807)
Revenue - Q1 @ $31.0 - $9.1m, Q2-4 @ 42.5 - $34.3m = $43.4m
Costs - $36.1 (31.1+5) = $39.7m
Profit - $3.7m
Total - $22.9m @ 1.37 = £16.7
Fairly happy with the update overall.
Disappointed that the 30/6 date will not be met but the extension should settle the nerves of those that were concerned.
It's certainly time for MH to start hitting the targets he sets and the big positive for me is production of 13.8k for the first 5 months. Providing grades continue to improve we should see production hit upper end of guidance.
With further newsflow on drilling and Coringa there's plenty to look forward to. Just a bit of patience required for the SP to improve.
Haven't kept up to date with my holdings the last few months, whilst catching up came across this
https://www.miningglobal.com/automation-and-ai/newcrest-executes-latest-share-grab-ecuador-miner-solgold
It's the only article I've found on it and the Dec presentation on Solg website has them at 13.5ish (similar to BHP). Is it correct? Wouldn't a TR1 have to have been issued ... maybe not for 1.5pct increase?!
Thanks
Indeed Ophidian, my original estimation of 'all in' costs of $28 was clearly wrong (I'm not entirely sure about it being scare tactic headlines though) and I certainly should have delved deeper into the numbers before posting ... my apologies.
However, the point of my post was not only to correct RK's statement of $15/kg production costs which is somewhat out of sync with 2020 company guidance but to highlight that there are additional costs that should be taken into account and the production costs stated should not be taken in isolation.
Anyway, that's it from me today, it's almost beer o'clock. I may well ask a few question in relation to cash & non-cash costs etc. next week.
Good weekend all.
When 'new' posters
The only breakdown I can see for any of the Admin & Sales etc. costs is in the FY18 numbers for Admin which includes 8.3m Share payments as NickD indicated plus there's Depreciation of 0.2m. Can anyone enlighten me as to 'Other' of 5.5m, assume this is a cash cost? There's no further breakdown that I can see.
SPA 2020 EBITDA estimate is $76.6m so $7.3m depreciation. Strip this $15m out and you've still got (what appears to me) to be circa $30m which equates to $7.30 / kg in addition to the $17.2-$17.7 production cost?
Well maybe someone can explain to me what makes up the difference between a Gross Profit figure of $113m (4,114mtV x $45-$17.4) and the Operating Profit estimate of $69.3m. If it's not Admin, Selling/Distribution etc. then what is it?
@faramog - The $28/kg 'all in' costs arrives at the operating profit level, i.e. before taxes. As per my response to Ophidian below, all my numbers have been pulled directly from the company accounts although I'm more than happy to be corrected if I've made any errors which I often do in my old age unfortunately.
@Ophidian - The numbers are pulled directly from the company accounts so let's hope they're not fantasy ...
H2 2018
Admin - $16.2m
Selling - $5.5m
Mine - $1.4m
Idle Plant - $2.1m
H1 2019
Admin - $7.7m
Selling - $8.5m
Mine - $1.6m
Idle Plant - $0.3m
Total - $43.3m
The above is also backed up by the SP Angel numbers for 2020 with Operating Profit at $69.3m
4,114mtV sales at $45/kg less costs of $17.4/kg = $113.5m leaving a difference of $44.2m ... incredibly close to my number above.
RK - I'd like to pick you up one of the statements within your summary that you state are facts.
"Our cost is around US$15 per kilo" - Whilst costs for Q4 2019 came in at $15.2 /kg company guidance for 2020 costs is $17.2 - $17.7 /kg, being around 15% more than your stated figure. Obviously it is possible the company could beat this guidance as they have done in the past.
In addition, I think it is important that any potential new investors (and indeed existing ones) are aware that production costs do not include Admin, Selling, Distribution and 'other' mine costs which, for the 12 month period ending 31/6/19 came in at US$ 43.3m. Taking this into consideration our 'breakeven' price is around US$ 28.00 per kg in order to calculate profit at an operating level.
@Alfa - The H1 numbers are obviously for a 6 month period. My figures are based on the companies estimates for FY 2020 (4,100 & 17.4).
Wrt Selling & Dist, H1 sales were 1,115kt at cost of $8.5m for 6 months. My numbers based on $20m for 4.1kt represents a circa 17.5% increase not 235%! In addition, I don't see how much in the way of selling/distribution can be one off in nature, maybe I've missed something in the accounts?
Ultimately, with my Operating Profit number being extremely close to that of the SP Angel estimate my overall estimate of costs of $41.8m can't be far out from theirs albeit the breakdown may differ somewhat.
You can see the 'other' costs detailed in the financial statements of the H1 Report. This had Admin at 7.7m, Selling 8.5m, Mine 1.6m & Idle Plant at 0.3m.
The SP Angel forecast for 2020 is EPS of 2.4p (3.11c) so our current PE is around 10.
I got 'round to crunching some numbers to estimate 2020 profits & EPS at various average V price levels ...
@ $30/kg
Op Profit - $9.9m (100%)
EPS - 0.5c / 0.4p (80%)
@ $35/kg
Op Profit - $30.3m (100%)
EPS - 1.5c / 1.2p (80%)
@ $40/kg
Op Profit - $50.9m (100%)
EPS - 2.5c / 2.0p (80%)
@ 45/kg
Op Profit - $71.4m (100%)
EPS - 3.6c / 2.7p (80%)
At the $45/kg level my Op Profit forecast is pretty close to SP Angel estimate of $69.3m so the assumptions I've made in terms of costs appear to be fairly accurate.
Assumptions:
Production/Sales - 4,100mtV (Vametco 3.1k & Vanchem 1k)
Production cost / kgV - $17.4
Selling/Distribution costs - $20.0m
Admin costs - $18.0m
Other Mine costs - $3.2m
Idle Plant costs - $0.6m
Total costs excluded from $17.4 production cost - $41.8m
80% EPS to BMN based on 74% Vametco & 100% Vanchem
EPS based on 1.15bn shares in issue and RoE $1.3 to £1.0
If production costs were to be similar to what was achieved in Q4 2019 say $15.5/kgV I get the below.
@ $30/kg - $17.7m / 0.9c / 0.7p
@ $35/kg - $38.2m / 1.9c / 1.5p
@ $40/kg - $58.7m / 2.9c / 2.2p
@ $45/kg - $79.2m / 3.9c / 3.0p