Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Yup, Aug will tell us more. You may well be correct with your concerns. Biggest concern for me today was forthcoming grades - Q2 3.07% was lowest ever. (Previous low was 3.62% in Q3/18 but otherwise always more than 4% over past 7 years). Report states grades will improve in forthcoming quarters. Will need to. Can't see them mining 9.9M every quarter simply to keep up with targets. Still, if they do what they say they are going to do, things will look increasingly rosy as next 18 month period draws to a close.
Nosir, I will respectfully disagree – if they hit their sales guidance, as they restated they would in this update, the net cash position will increase marginally this year, even allowing for all the development capex.
Also, looking deeper into the figures, the sales volumes and mix in H1/19 was very similar to H2/18. The report states that sales prices for ilmenite strengthened during the period and zircon was stable, so revenue should have increased, marginally.
The net cash position improved by 25M in H2/18 but decreased by 10M in H1/19 – a 35M.
The development capex is 75M in 2019 vs 25m in 2018 – a 50M increase y-on-y.
The cash swing indicates that the increase in capex was H1 weighted.
In H2, not only will sales be 20% higher to meet guidance but the capex will be less and the net cash position will increase overall.
So I remain very confident the dividend will come!
A few thoughts.
Mined ore of 9.9M was a company record by some margin. Shame grade of 3.07% was so dismal!
On track to hit guidance so nothing untoward on production side.
H1 shipments of 483.5kt. 2019 guidance to match 2018 on annual basis. H2 shipments will need to be 590.9kt to achieve this. So cash generation in H2 will recover, net cash will improve once again and current position is a low point. Funding dividends will not be a problem.
And dividends….. if they are to start in August as planned, thought they could have thrown out a small bone to say matters on track to pay a maiden dividend later this year… but they didn’t! Nada. Shame. Still confident though.
In tomorrow's update will be interesting to see if current net debt position has gone up or down. With the increased capex in 2019, any net gain (ie anything higher than +13.5M), may be an indicator of progress, anything more than 25M+ may be very good. Depressed SP may indicate otherwise! Let's see.
No doubt you are correct (it is listed on KMRs website as 11th https://www.kenmareresources.com/investors/financial-calendar) - I got 10th from the KMR News Section on LSE.
Nosir,
SP predictions are not my cup of tea either. Dividend policy of 20% of net profit is not one of my predictions - it has been kicking around since end of last year: this week's presentation - page 16, April's presentation - page 14 etc etc. Think this year profitability will rise as prod. volume decrease more than offset by increased ASPs. Taking '18 NP of 50.9M (page 12) gets to around 8p p.a., a little better depending if current USD FX continues.
My only prediction is that in Aug they will announce a maiden divi to be paid in Oct, with a 1:2 split vs end of year payout next spring, ie something in the range of 2.5p+ for Aug.
This presentation was basically a repeat of the mid April one. Pages 8 and 9 give a bit more flesh on the bones for the WCP B move but essentially numbers haven't changed.
'19 capex (dev+sus) 90M+ vs '18 capex of 40M. On a cash-bridge basis this will offset the 50M in cash generated in '18.
Production will moderate slightly in '19 but ASPs started from a higher point so revenue will rise, some cash will be generated (to pay for dividends) and profitability will rise.
Commitment reaffirmed to a dividend of 20% net profit. On an '18 basis this equates to 8p p.a. (4%+).
Numbers have been out there for quite some time but now we are further down the track, seems a few more are starting to get a handle on them.
Buck's point of where will things lie, after 150M dev capex over the next two years is out the way, is perfectly valid.
Final point, as an aside, video of the move was interesting. Obviously a good chance to dry dock the dredger / WCP B and do routine hull repairs which is a benefit hidden among the numbers.
Understand that it is only a bit of craic and you are correct that sentiment has been poor (for good historiical reasons) but for the rest you are behind the times. The PLC at end Dec had net cash of 15M (debt of 70M but cash of 85M), Last year - revenue 262M, EBITDA 93M, cash generation 48M. This year product prices moving up due to a supply deficit. Writing nonsense as you did below is symptomatic of why this BB was last year recognised as one of the worst on LSE and no-one but a small group posted here. It is a shame as TLOU is an interesting prospect and a few good bits of information are posted here but few have the inclination to wade through the chaff to get to it.
No, not that low, now in at 5.65p and 7p.
Not sure you'll see your 4p but get the point you're making. We've both seen it elsewhere.
Think it has quite a solid base for now and I'm hoping for the tender outcome in a reasonable timescale (otherwise it will drift) and for a decent jump on the outcome. Recent spike on beccoming a preferred bidder was indicative.
If outcome leads to a postive reaction, question will be whether it is a step up or a spike followed by drift to the next news as there will still be a long time to first revenues. Don't know. Just have a bit invested to maintain an interest as a 'fun share'
In these types of circumstances, all scenarios can be true. The important part is to win something to get started.
The long term contract may be split 2MW / 97MW. Equally, I can see that if TLOU are up and running quicker (being small modules and not a project employing 1000+ people), TLOU could conceivably earn a short term supply contract of say 10MW or 20 MW etc (the RNS referred to 10MW) until such time as Sekaname's project comes on line. Once that happens, TLOU could supply to the power pool or the government by that stage may wish to contract more than the current total of100MW. Who knows. Until such time as bid process is completed it may remain unclear but these details will surely emerge.
BF, have a look at 20 May RNS. No official award yet, although confirmed as preferred bidder. Looking at initial 10MW, to generate USD 10M p.a. revenue, which in turn will be used to increased upto 20MW to match the power lines, following which it can be stepped up further.
Recent podcast from AG states they believe it is to all intents and purposes in the bag but not quite there yet... Reseves all well and good but route to market and cashflow the crux of the matter.
Bythesea, the problem about replying to your post is to be seen to be ramping or promoting a particular company but a couple of years back I aquired 1% of SYM in the 4-5p range. They peaked at 34p on the back of Sky's Ocean rescue campaign, fell back to 7p on the back of incorrect BBC reporting and have now recovered to 12p. I remain confident with them to achieve stready long term progress. Depending on when you invested, you would of course have won or lost a fortune and had differing views - timing is everything. For what it is worth I have several AIM misses as well I could quote. I have also seen enough to invest more here, most recently pre-placing at 5.65p and again today at 7p, so would not give up on TLOU just yet.
Being reading this BB for a couple of weeks and thought I’d set a couple of things straight.
I was one of the PIs invited to participate in the placing. I met some board members, registered an interest in investing in the company if a placing was ever needed, was put in touch with the brokers and at a later date, when the time came, I was contacted. Some things to note:
Anyone could follow a similar route to register an interest but would probably need a decent amount to make it worthwhile for all concerned.
Brokers were duty bound not to release information not already in the public domain so no new information was offered. They were very conscious of this fact.
Broker asked if money was available to invest but without confirming details that a) there would be a placing and b) at what price. Ultimately time was very short – as knowledge of a placing and price is information in itself - the announcement was made the following morning at start of play.
In my case I declined to get involved – got cold feet and did not have enough time to evaluate clearly, transfer monies between accounts etc etc. Conspiracies put forward on this BB may no may not be true but they are very different to my first hand experience of the process.
I then invested the same amount by purchasing in the market after the placing. With hindsight, a wise move but it was not clear which way to jump at the time.
Any thoughts of 500k being raised in the OO is off the mark. No-one will take up their rights with the SP so low. This is acknowledged by GL in his interviews…. “at least shareholder have been given the opportunity”…. which is a principle that all shareholders should welcome .
Starting point is their 10th April RNS
http://www.lse.co.uk/share-regulatory-news.asp?shareprice=PFP&ArticleCode=zo64ljhj&ArticleHeadline=Corporate_Update__Subscription__Issue_of_Equity
A few selected figures - inital capex 742M, annual revenues (exp) 323M, annual costs (?), 30 year mine life, 47.7Mtpa ore, IRR.... have looked at ore grades etc
Still not sure of the relevance of PFP to KMR. SP has risen as they have reached an agreement in principle to resolve their dispute with Gen V. Details unknown but on back of this they have raised 200k by dilution to keep the lights on. If/when their settlement transaction is done there will be significant dilution to raise funds for it.
In meanwhile, they have updated their scoping report from 2011 to 2019, with same production / mine figures but with expected capital costs 7.5% higher offset by revenue 19.5% higher on back of expected higher selling prices for IL (173), R (908) and Z (1,320). This may be of more relevance to KMR but simply reinforces what we already expect – when the supply deficit emerges, there will be a supply response when the product prices encourage development.
Interesting story but KMR seems a safer choice to me.
I have too in past couple of weeks. They promptly ticked down, so my usual timing on show.. Not so confident with them as i am with KMR due to cash generated will be needed for Madagascar but helps spread the risk and the market outlook is good.