Member Info for CarefreeCarry

Shinfalls - I sincerely hope that you manage to improve your cash flow situation and remain invested. I hate to see distressed sellers.

After digging through some of my old research over the weekend I decided to review my original investment decision here. I initially became aware of MTL after seeing the director's dealing RNS (Jeremy Ayre). I did my research and there were lots of positives as well as some risk. Looking at the figures in the feasibility report it seemed that when the dividends were to be paid, shareholders would receive approx 0.5p per share with gold at $1250/oz and an AISC of $800/oz, producing 96koz of gold per year. At 4.55p per share it represented an 11% dividend yield on my investment which I thought was worth putting £10k of MTL shares into my SIPP on 19th July 2017. I spent over 6 months researching this company. I continued to add to my SIPP until I had reached 3m shares adding mainly in February and March 2019 for a total investment of £31k. With the risk of default and the risk of being taken private now gone I am now adding MTL shares into an ISA with my second lot of 140,609 shares bought today. They are showing up as a sell though.
Looking ahead, I have stated previously that I now expect dividends to be paid at 1p per share if gold remains at current levels and our AISC drops further which means that I now expect my SIPP to receive £30k per year in dividends for an investment of £31k.

So Jimmy, if you can, hold onto your shares for as long as you can. If you can't then I hope that your situation is only temporary and I wish you the very best of luck for the future.

Lee - Yes, the recovery period ends July '22 at the latest. Yes the period can by extended but I have no idea how likely that will be.
I think that our previous losses can be carried forward to lower our tax bill once the recovery period ends but that isn't my area of expertise (anyone got Donald Trump's number?)

Lee - Further to my previous post I have the following link that explains the my first point. It took me a while to find it as I had looked at it four years ago when I first invested - https://www.bakermckenzie.com/-/media/files/insight/publications/2015/02/primer-on-the-philippine-minerals-industry/files/read-publication/fileattachment/bk_manila_primermineralsindustry_2015.pdf

Page 17 has the relevant info.

I cannot find a link for the tax relief on the interest payments so I may have been mistaken so please ignore that as I cannot verify it.

Have a good Easter.

Lee - I see it as MTL has a tax holiday of up to five years from the commencement of production. Commercial production started July 2017 according to the MTL website. If MTL has recovered its pre-operating expenses and investment before the five years then the tax holiday finishes at that point.
MTL may get some form of tax relief on the interest payments. I can't find the link for that info but I'll post it when I find it.
OceanaGold were awarded the first FTAA in 1994 for their mine at Didipio but their Government share is higher than MTL's

Lee - Another key word . . . . . Location

MTL are located in the Philippines and are taxed differently to AAZ.

MTL still have the FTAA to kick in - https://www.lse.co.uk/rns/MTL/ftaa-approval-e2ed14cldfwhmzd.html

Lee is on track so far.

Lee - Hopefully MTL have exceeded 21,00oz as we are still ramping up to design throughput plus the COVID19 situation has improved and MTL produced record numbers last quarter when the COVID19 situation was worse. Coupled with lowering AISC we could see another $650/oz quarter heading to free cash flow of around $13.5m. Next debt repayment should be within next five working days as per finance agreement.
MTL needs to get the debt levels down asap before the FTAA kicks in next year.

Shinfalls - I think SP will start to rise probably after Easter in anticipation of another record quarter update (some of the Governments SEISS money may find it's way here as well to add to the boost). A spike on RNS release day and another slow retracement back to these current levels which is where the SP seems to be comfortable at.

If Roy is going to be selling his remaining 5 or 6 million shares before the quarterly update then the SP could drop lower.

Somebody mentioned Ruffer still selling shares recently. They had 101m shares notified 28th January 2019. They must have all been sold by now if that is their intention.

Interestingly, Baker Steel dropped below 6% threshold between 31st December 2019 and 31st January 2021 without a TR1 being produced. About 12m shares sold?

lovinglife435 - You beat me to it ;-D

Sagacity - I agree with Lee's points in his post. At current repayment levels, approx $15m per quarter, we should be debt free in 2023Q3.
Purchasing shares at these levels should see an annual dividend yield of approx 63% at 1p per share dividends. That's like buying money.
There's a further 85% of the land bank to be explored and possibly produced from to extend the life of the mine beyong the 15% that is currently being mined.
Definitely buy and hold for the best returns.

Supertag - We're about 5 weeks from a quarterly update and trading opportunity. I wasn't expecting the SP to drop this low but then I also wasn't expecting volume selling on the dips.

The Basel III deadline has been extended over and over for a few years now. Central banks have already been accumulating gold in record amounts in anticipation of earlier deadlines that have been extended. Central banks purchased 651.5 tons in 2018 (up approx 70% from 374.8 tons in 2017) and 646 tons in 2019. That's approx 20% of global annual output bought in those two years by central banks. Central banks continued buying gold last year but at a slower rate. That's hardly quietly accumulating or even hidden accumulation.
This explains the ramp up in the price of gold up to last years peak so Basel III has, IMHO, effectively been priced in.

Here's someone expecting the gold price to improve in the second half of the year but not because of Basel III.
https://www.youtube.com/watch?v=i2cTcSWhmzc

Spaghettihoops - 50p by last Xmas and now 2p by this Xmas. Probably somewhere in between but much closer to 2p.

As for your comment about crypto, gold is seen as a safe haven in times of trouble so not many people will be transferring their gold holdings to the super volatile crypto currencies. People are far too sensible for that.

Spaghettihoops - I thought you wasn't going to post on here until Winter.

Roy - I can remember you saying a couple of years back that it was going to be your birthday on Friday. Then the following year, last year, you said the same thing, it was going to be your birthday on Friday. It stuck in my memory as I thought it was strange. Even stranger than your usual posts ;-)

Anyway, happy belated birthday ??

NicotineNelly - They just come to a different conclusion with the same data that everyone else has.

Would you really have watched and therefore monetised any of the YouTube videos if they weren't shouting about $9k / oz gold?

As I said on Friday, there's a myriad of possibilities (moving parts) to take into account so why worry about them?

If you have invested in MTL for their future dividends then the POG today is immaterial.

If you have bought MTL shares to trade them then the quarterly results will provide the opportunities you require.

A (possibly lower)

Beyond D

That's a very nifty crystal ball that you have there TheNavigator ;-)

The gold price isn't too much of a cause for concern for MTL as the "no default" clause means that the mine can just keep on digging it out of the ground and selling it and as long as they are doing that the we will all reach the finish line together.

These guys can't seem to make up their mind - https://www.kitco.com/news/2021-02-26/Gold-price-sheds-nearly-100-this-week-as-Wall-Street-calls-for-more-losses.html

These guys are a little more positive - https://www.fxempire.com/forecasts/article/gold-price-forecast-major-breakdown-or-buying-opportunity-703181

Spag - I've recommended your post as a vote to accept your offer of not posting on this board until winter ;)