Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Keep it on the bedside and somehow missed this one, so good find.
All just in time for today/tomorrow's annual analyst site visit - probably a deadline they wanted to meet.
Should be an updated presentation coming out in the next day or so too.
A year ago they were at 410p, in Oct at 450p and now 425p, so an immaterial change.
Makes you wonder what the point on them are when none of the prices targets in the past 3 years made by anyone have been reached!! Still, at least they are all on the postive side by a good 50%.
Certainly agree with the sentiment and hope that it will at some stage provide a boost but as the FTSE 250 starts with M/Cs of approx GBP 500M we have a long way to go yet.
There are a few stragglers - Aggreko, Galliford Try (146M), Rest. Group (270M) and even Sirius (383M) who may drop out next time round but KMR will be someway down the list to replace them. After that it is 888 (508M), SIG (550M) and onwards.
Wonder what today's catalyst was. I presume people absorbing Q4 results and positioning a few weeks prior to YE results. Most likely. Maybe a bit of news on WCP C, maybe a small move with a bit of momentum. Who knows.
I am not a chartist, so with no TA involved and only conjecture on my part, in my mind circa 250 was a tough level to break - formed resistance countless times on the way down and then once broken, formed a resistance several times since. Now behind us. So for this baseless reason alone, I shall have a wee drink to 250 and to seeing blue against KMR after all these years.
Couple of updates from Base - confirming in Q4 Zircon moderated and Ilmenite and Rutile increased (with demand outstripping their ability to supply).
https://www.baseresources.com.au/wp-content/files/200123_BSE_ASX_Dec_2019_Quarterly_Update_final.pdf
https://www.baseresources.com.au/wp-content/files/200121_BSE_ASX_Toliara_drill_assays_FINAL.pdf
Nosir, you are making a serious point that many would agree with, in a tongue in cheek way. That said, don't see the problem. As per past posts, I'm expecting net debt to by crica USD 70M by Y20 end vs gross debt of circa USD 40M under the previous debt facility. Difference being additional USD 15M capex in upgrading MSP, zircon going South instead of North in 2019 (difference in revenue circa USD 20M) and grades falling over so production at low end of guidance (and falling further in 2020 until after the move). The plan has not really changed and being able to undertake the MSP capex is a positive sign. Just a big project execution risk to get past. Shareholders are set to receive their dividend in March (something you have continously been unsure of). All in all, is it not time to think the glass is half full for a change?
Yes you can consider RBM problems, yes sub-saharan Africa can have these types of problems but the comparisons only go so far and tarring all with one brush is simplistic.
The Moz government is military based (as are many Africa countries) just more obviously so. After the civil war, the propensity for unrest is perhaps less and certainly controlled, unless considering inter party problems or the issues in the far North.
Also KMR contribues 5% of Moz exports. This automatically implies government support - as shown in the labour dispute a few years back. It is as good as it gets at present. If you have concerns on these issues at this stage you are in the wrong investment.
ObsKen, thought by now you would be grateful to anyone who spend time replying to one of your posts.. (lol).. although many share frustrations of jam tomorrow etc.
BigEarl, I am on a different page to most here who mull over shareholders, EIB etc etc. Think the issue is simpler. They are spending USD 106M moving one of the main bits of kit 20km down a made up road in one of the least developed parts of the world. What is the risk of something going rwong? What are the direct costs of something going wrong? Most importantly what are the indirect / disruptive effects on production/revenue profile of something a delay and the ability to repay debt? These concerns seem much more important to me. I would hope the SP will rise as progress is made with the move / attention focuses on 2021.
Think you need to refer your questions to Hannan and not KMR. The issue with KMR is always that sales dominate financial performance. For example, the report you are referring to estimated ZR reference prices would increase y-o-y (18-19) by USD 170/t and realised prices by USD 200/t. KMR's Q4 updated stated that ZR prices actually fell y-o-y, so there's USD 20M in lost revenue/profit straight off the bat.
Despite the hurricanes, falling grades et al, KMR have hit their guidance (albeit at the low end), have progressed their capex on budget / time and managed the things under their control. They will report a decent net profit, EBITIDA, have a maiden dividend, re-jigged their finance to ensure the payouts will continue and if all goes well with 2020 projects, a rosy future. What more do you want?
Suspect they will book costs in 2019 as it incurred and this is only a cash flow issue. (Better this way as they will avoid paying out 'excessively' this year and less next).
Also, if capex in 2019 came in at USD 50M (instead of projected USD 75M) and next year is USD 120M, difference y-o-y will be approx USD 70M. From start / end 2019, net cash was unchanged (USD 13.5M).
In 2020, ilmenite ASP may be higher vs lower zircon ASP - but shipment volumes will be down, so expect revenue will be lower. All other things being equal, clear why they deferred debt repayments. End of 2020, net debt will be USD 70M plus.
Once again I have found IR to be kind, prompt and helpful. I'm sure they will be happy for me to share their response to my enquiry:
"The capital expenditure budgets for the WCP C development and the WCP B move remain the same, at US$45m and US$106m respectively. The increase in development capital guidance for 2020 to US$119.5m is driven by some expenditure carried over from 2019, as you rightly suggested, and the upgrade work on the MSP. The work on the MSP was not included in previous budgets as it is the result of studies we have conducted into our ability to operate at 1.2Mtpa of ilmenite production on a consistent basis. We achieved this production rate in December 2018, however some upgrades will be required to deliver it on a consistent basis. We expect there to be other benefits from this work, such as stronger rutile recoveries".
Reading between the lines, if MSP involves USD 15M, then best part of USD 25M has been carried forward from 2019 to 2020, no doubt due to slightly delayed delivered of WCP C.
Last part of this week's update refers to USD 119.5M being approved for development projects in Y2020, this being in addition to USD 22M of sustaining capital in Y2020.
Recent presentations (June, Oct...) referred to USD 106M total capital cost for WCP B move, with a total of USD 81M capital costs in Y2020. Anyone understand reasons for the increase of just under USD 40M in Y2020 ??
This week's report mentions USD 14.5M to upgrade MSP to facilitate future 1.2MTpa target. Is this a new upgrade project outside of the USD 106M quoted for WCP B move ?? Why was it not referred to previously ?? Not clear to me but goes a long way to explaining why they deferred debt repayments at time of new debt facilities.... not a problem of cash generation but one of increased capex...
Net cash position increased by circa 10M from low point of H1 off back of stonking record level of shipments in Q4. All as clearly flagged, despite some here having doubts. Guidance for 2020 IL (800-900kt) is less than 2019 (which itself was less than 2018), so not all is great in this report. Let's see if ASP rises faster than production drops in 2020. Perhaps not. At least all looks set for 2021 being a very good year in terms of combined ASPs and production rates. At what stage will people look beyond 2020 to 2021 instead.... 12 months ahead, 18 months ahead or at time of Y19 results? Let's see. Remaining very confident.