Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
for today's AGM. https://www.kenmareresources.com/application/files/6215/8935/4675/2020-05-13_KMR_2020_AGM_Presentation.pdf
Quite so. See bigger long term issue being stability of Euroland and future debt ratios in string of club med countries. Presumably EIB would be on the hook for a string of related projects. Would imagine OPEC will come to some sort of production cut in excess of the 10M they cut previously to raise it off the rocks. If/how they manage to deal with a 29M fall in daily consumption is something else. Unwinding lockdown may come in time to restore the balance too. Not too concerned either way as another player will simply pick up the KMR slack based on long term value investing.
Disposal of 4M shares (5.98% to 2.28%). Makes you wonder why they didn't do it much earlier (months/years ago) when SP was considerably higher (current SP is more than 20% below OO price of 235). At least it will be one less old chestnut to be brought up when discussing level of SP ....!
SandyShore, think the answer to your container question is that the missing number is 4, giving CMAU7048654, which is presently being shipped empty from China to Honduras. Indicates this was the container delivered to VAST's supplier before supplier onward shipped to VAST, so forget trying to trace this one. All other suffix numbers result in invalid container numbers. Also, please note that the four letters are irrelevant in determining which shipping line is being used. Containers are freely brought and sold all the time so a 'CMAU' container may have started off as a CMA CGM owned container but no more than that. The owner can choose to ship with any company. If you check the posts, you will see I was the initial poster that explained how to track the containers. I gave the eta for the first and last shipments. There is little benefit from trying to struggle with this issue for the shipments in between. Also time for clearance, onward transportation and set-up on site is unknown but the basic point is that is will be during June. GL.
There is a load of waffle being posted here. Containers are not unloaded in port with some used at sea and others on land. That simply does not happen. The container is shipped all the way to final destination. There are customs checks etc etc and all that it implies. The containers are either shipper owned or rented from the shipping company but all are unloaded after final customs checks and after discharge from the Port. Rented containers are unloaded at destination and returned empty to the shipping company. Containers are not renumbered either on a whim. Containers are inspected periodically, are registered and have a period of validity for use before the next inspection, otherwise the shipping companies cannot be sure of their structural integrity and will not accept them. Simply go on the shipping company tracking websites and track the container numbers. If you cannot find it, you are either on the wrong company website or have an incorrect container number.
BF, sure you are correct. If I follow my WCP B concerns through to their logical result, then there could be bumpier times and better opportunities ahead. Yet, as KMR goes ex-div on 16 April and 5.52c is approx 4.5p, thought I would buy now regardless - at least it covers costs/spread etc and then sit tight as KMR was approx 290p prior to market collapse.
Overall point well understood, Nosir but the fall from net cash to net debt of circa 25M in the past 3 months is nothing untoward, certainly not in the way you are thinking. At time of Q4 projected 2020 capex rose from 80M to 120M. It became clear to me that 25M of 2019 capex had been kicked over into 2020 due to delays with WCP C. I wrote to IR requesting clarification on this, they responded very promptly and I posted their reply on here. As part of the renegotiation they decided to fund an upgrade of the MSP at a cost of 15M with a rapid IRR. That one looks like an easy win, justifying the extra debt taken on. With hindsight, the renegotiation of debt looks like a smart decision - the risk of C19 affecting WCP B's move, this year's maiden dividend being paid, which was something you were previously sure would not come to pass!!
Yes we put forward different views. Mine has changed a bit given the grade / production output continues to fall and the need to move WCP B becomes ever more apparent in the figures.
I actually think it is a sticky moment for KMR at present. In Europe, things can be opened / shut to calibrate keeping a series of C19 peaks below the healthcare threshold and in parallel increasing the health capacity, to buy time for testing, a vaccine etc. In Africa it is different. The healthcare is so low it is difficult to tolerate any outbreak so it is harder to allow any re-opening of borders until….. KMR have a contingency of 6 months additional mining but the WCP B move is needed so this is a large risk at present. The only silver cloud is that a delay allows additional cash generation prior to the capex being spent.
When considering whether the new finance was needed or not (and it is surely a good thing it was arranged when it was, prior to C19 issues), it is worth remembering under the original facilities of repaying to Feb 22, gross debt at present would have been 53.4M + interest vs KMR’s current net debt of 9M. The capex for 2020 was planned to be 80M, with stronger cash generation in 2021, so I continue to think it would have been manageable but touch and go when factoring the recent grade drop-off. Refinancing was needed for additional headroom and to ensure this month’s dividend would be paid !!
At the Q4 update, capex for 2020 was increased from 80M to 120M. Approx 25M was carried over from 2019 due to the WCP C delay in commissioning (now apparent in the cash figures - net cash 13.7M at year end and net debt 9M now). There was also 15M for an additional capex project – MSP upgrade - which was not included as part of our past discussions but reflected KMR’s confidence in their finances.
Finally, I do not see any meaningful share buybacks this year. This looks like a typical KMR smokescreen to distract from current falling grades/production. It does not make any sense to do it prior to WCP B’s move and is it beneficial to do it with borrowed money during this higher risk period? For me, 2021 onwards.
All said, I’m still accumulating all the time and added another 4,800 shares this week at 184.6.
Correct. To add - Shipment will be unloaded from MSC Zoe on 1 May at Port Said, Egypt, (prov) loaded on to Maersk Kiel on 8 May and arrive Constanta on 21 May, this being the final shipment. The first of the three shipments left Shanghai 18 Mar, eta Istanbul 15 April, eta Constanta on 23 April. 2nd shipment sometime in between. All dates subject to change.
If you do the same exercise for what were described as the first two containers BMOU3158521 and SEGU2839261 and use Yang Ming (https://www.yangming.com/e-service/Track_Trace/mul_ctnr.aspx?str=SEGU2839261,BMOU3158521,&rdolType=CT) instead of Maersk, you will see both containers are travelling Shanghai to Constanta Romania and are presently eta in Instanbul on 15 April where they may or may not be shipped onto another vessel but will get to Romani also during May 2020.
For those interested in the arrival date of the shipments from Chia, instead of guessing vessel speeds, suggest you take one of the container numbers MSKU9783999 (as shown in VAST's twitter account), insert it into Maersk website (https://www.maersk.com/tracking/#tracking/msku9783999) and you will see an eta in the Port of 21 May 2020. Then keep a track regularly as shipments often get transhipped between vessels on route and delays can occur. The allow a bit more for customs clearance and transport to site..... Hopefully the wagons shown in this particular site will get to site by June 2020. Keep a look out for other containers in other tweets in case not all is included in the same shipment. Best wishes all during this C19 outbreak.
Well, I remain convinced so have accumulated a few more. Didn't expect to be at 226.75 again after it broke thu 250 a couple of weeks back. Short term may be bumpy but with a dividend of approx 3.5% this year, rising next, confident it will be a good long term investment.
They have done well in recent years - Sierra Rutile, Metalysis and Hamilton MSP impairments, Vale tie up, KMR T/O... if any of their geniuses have any more bright ideas, maybe they should stick them in a cold shower until the thought passes..
My comment was intended more towards the variance that will occur along the path - this will affect output over time more than operational snags. The starting point is in an optimal point with grades of 5.67% expected in year one vs grades of 4.69% over the first five years. The higher initial grade will mask over any time lost with start-up issues so we PIs will never know.
Commissioning planned by end Feb. Simply a situation of getting going and then tweaking, overcoming any snags, initial services and oil changes, optimising settings etc etc. After first weeks, dredging conditions / grades will be more important to production figures.
Z was 1,200 ave FOB in Y2018 but latest presentation states ave Y2019 prices were slightly weaker.
I was 165 FOB in H1/19. Latest presentation states H2/19 was >10% higher (ie approx 180 FOB) and strengthened further in 2020.
So in right ball park but slightly weighted to the optimistic side.
Bit of additional information on:
cash / debt levels at year end;
Ilmenite prices being 10% higher in H2 than H1 and higher still in 2020, zircon being weaker - overall +ive for 2020 (vs 2019)
WCP C producing by end of Feb.
WCP B upgrade costed USD 10M - previously listed as being 25% less than USD 16M budget. Water under bridge now.
My message crossed over with updating the website. Updated presentation now available.
https://www.kenmareresources.com/investors/reports-and-presentations