The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Welcome back, Ivans. Couldn't agree more with your assessment. That's why I've been buying too.
Not very lucky - but I did make a small buy this morning on the dip. Who knows, but looks a bit like a distressed seller to me. People buying up their shares now.
Quite a few comments - mostly not positive - on the issue of the share buy back. It's worth reminding people, I think, that MTR got shareholder approval only last week and is now - I suspect, but I don't know - unable for the moment to kick the buy back process off, as it cannot do so if it's in a closed period. This might be impending news on KML, Cobre, something else. Here's what last week's RNS said. Note the second sentence in particular.
"A further announcement will be made in due course setting out the parameters and mechanics of any share buy-back following the anticipated entering into of a sale facility agreement between the Company and its broker, Arden Partners plc (“Arden”). Shareholders should note that the Company can only enter into a sale facility agreement to effect a share buy-back when it has determined that it is not in possession of price sensitive information or otherwise in a closed period (either being defined as a “Closed Period”). "
I see Arden has initiated with a price target of 2.0p. Can't get the report yet but hope to do so soon.
Looks like sensible business by MTR. I've held THR and make some good money initially. But sold out earlier this year when I sensed - rightly for once - where the SP was heading.
Haven't done any close examination of this but I see THR MCap is £2 million, compared with assets of £12 million apparently.
Shares bought at .20 have appreciated already by 30 to 40 per cent this morning, but of course that may be walked down as traders take profits later.
Nice try, Cashking. In fact, the company will get about £550,000 in dividend from Sandfire (its first of many twice-yearly dividends, post the MOD purchase), which will pay for the on-market purchase of about 40 million MTR shares - all to the benefit of shareholders (including board members) as, ceteris paribus, it will drive up the MTR SP and reduce the number of shares in issue.
I know from your posting history that you will welcome this as you are always on the look out for signs of dilution - this of course will concentrate, rather than dilute all shareholders' interests.
I don't think the buy idea has gone badly or well. MTR can't buy any of its shares until the SFR-MOD deal completes and until MTR get approval. Anyone looking to manipulate, trade or whatever knows that. But give it time - a matter of weeks - and that will change.
We've seen how the SP can rise or fall on buys or sells of £30k or so per day. Imagine what could happen if MTR brings, say, £1 million to the table and starts buying.
I imagine announcing their intention to buy back shares is step 1. I expect their hope is that this step alone will add to buying pressure. But if the MCap remains significantly below NAV I'd have thought they'd buy back until it got close to NAV, or until they've spent the funds they have available. I've no idea how much they'd allocate - it might depend on the extent of the MCap-NAV mismatch. Share buy backs are a very effective and tax-efficient way of delivering for shareholders if/when companies know that their SP is artificially low (whether because of market sentiment or manipulation). Of course they won't have any funds to do this until the deal completes.
I see interim results have just been released. Not had time to read in depth yet, but I see they give a NAV of 1.71p. Compares well with 1.20p SP.
The SFR share price has risen again - it's currently at $6.54. So the gap between the MTR SP and reality has grown further.
This site tells us that MTR's MCap is currently £19 million. If/when the SFR deal completes shortly, MTR will receive over £500,000 in SFR dividends in November and hold £22.5 million worth of SFR shares at the current SFR SP.
That £23 million is 21% more than the current MCap. Apply that 21% increase to the current SP of 1.20p and it goes up to 1.45p.
And that ignores the value of the T3 NSR, which is capped at $2 million; of the future exploration potential of the wider JV area, all done at SFR cost but if successful delivering long-term benefits to MTR, through future dividends and the uncapped NSR.
And it further ignores the value of all of MTR's other investments.
That's why I've bought more. Why aren't others buying at this bargain basement price? And who on earth would be selling?
Couldn't agree more, Mike. SFR SP is up yet again - now at $6.47. Our prospective holding in SFR more than covers our MCap in shares alone, leaving aside dividends and NSRs and prospects from SFR's forthcoming drilling campaigns. On top of that is a wide range of other investments, including Sable, as Forest has reported on this morning.
I've bought some more recently at this bargain basement price. Just need to be patient. I'd like to see us holding on to the large majority of SFR shares, as they're a cash cow that I think has huge potential for SP growth.
Err, he now holds 33.8 million shares - over 3% of the company.
Many people seem to have missed the significance of the SFR deal for MTR.
SFR is a really low-cost copper-gold producer. Yes, the copper price reduction will have hit its copper profits in 2019. But at production costs of under US$0.90/lb, two-thirds of all copper revenue is profit before tax. And while copper profits will have gone down, gold profits will have gone up, as the gold price has appreciated. Overall, SFR made more than AUS$100 million in 2019, and has about AUS$250 million in the bank.
SFR has a really healthy dividend. So MTR should get over £500,000 in November, and over £800,000 in 2020 and thereafter.
And while copper prices might not rise in 2019, or even in 2020, it's hard to see them staying at this level for long. See this article - one of a multitude - on the forthcoming world structural deficit, as production stagnates, while demand grows significantly, due to EVs, solar, wind, etc.
https://www.forbes.com/sites/greatspeculations/2019/05/06/copper-well-positioned-to-lead-the-next-resource-cycle/#5d73fb0e4cff
Just imagine what SFR profits and dividends might be in 2021 or 2022. And, as SFR stock is highly liquid, MTR will be able to sell a portion. if it has to, removing the need to place ever again.
SFR SP is up 2.5% today. At AUS $6.45, MTR's holding will be worth £22.3 million, if /when the deal completes.
Remember, even with the current copper price, MTR's SFR holding (if deal approved shortly) is currently worth £22.5 million - more than MTR's MCAP. With a further $2 million virtually certain in the capped T3 net smelter royalty, and with annual dividends from SFR.
What might the SFR share price be when copper prices rise above $3/lb?
Of course, one of the factors that will drive copper prices up even higher idc course is the very point that Cashking has made. The copper price has been too low for most of the past 5 or 6 years for producers to invest as they would have at a higher $3lb price. This will contribute to a long-term supply deficit, just as copper demand inevitably increases, as EVs, wind and solar drive significant growth in world copper usage.
The main uncertainty is not if, but when. Copper prices might go down further from today's level. This time next year it might still be sub-$2.70/lb. But it won't be in 2024.
For an alternative view, watch this for a more positive view on why copper is a long-term buy.
https://twitter.com/GianniKov/status/1173649272970997762
So sorry. You're right. I found it today, and thought it was a new one on the back of today's RNS. Apologies all. My comment on the NSR still stands though.
The interview is worth listening to for a reminder of the value of the 2% net smelter royalty which MTR will have (if the deal completes) over the entire MOD-MTR JV area. As MM says the market hasn't really noticed this yet.
Listen to today's interview on the latest on the MOD deal - see link below.
https://www.youtube.com/watch?v=DTyQOdyceC0
Michael McNeilly said "we're drilling on two targets at the moment and hoping to get some results out on that to the market soon" or words to that effect. So hopefully not too much longer to wait.
Nice to see the SP respond a little yesterday to the bounce in the SFR SP. Nice to see SFR up a further 3.5% today so far.
But SP still is trailing NAV significantly. Just focussing on SFR shares, assuming the deal goes through in the coming weeks MTR will hold £21.5 million worth of SFR, and then get £550,000 in dividends in November. MTR's MCap is currently £19 million so with our net smelter royalties and our many other investments there's some gap to fill.