Member Info for cautionyourblast

Thanks, bangrak. I have an excuse for a beach visit now!

Q2 profit will be interesting given the apparent lack of volatility in basket price and thus an expectation of lower revenue adjustments: it might give me a better steer for profit expectations for the year. Maybe my 10-12m USD is too bearish.

Thanks, Stuart, for the great job you've done as chairman. Sound operational and financial strategy, great execution, straightforward, no-nonsense.

I smiled when you quoted a number of posts, including mine, from this forum in your annual report a few years back.

If only all AIM-quoted natural resources and energy companies could have such top-notch chairmen...

All the best in future endeavours.

Hi Bangrak

You're more knowledgeable on these revenue adjustments than I am. On my (probably more basic) analysis of operational gearing in historical numbers, I'm only getting to USD10-12m profit after tax for the year to June 2024.

You're correct that clearly JMAT aren't getting particularly bullish on PGMs for the foreseeable future. My gut says that the EV discourse has a bit of an emperor's-new-clothes moment when people realise that they're about as green as blood. This *may*, in the longer term, support PGMs, but I certainly wouldn't invest on it. The marginal ounce determines price and the Chinese have truly swallowed the EV kool aid....for now.

Completely agree on the brokers; they're just too bullish. When they adjust (probably after the Q2s), I'd expect a bit of a price correction.

My FV price is mid-fiftys given where historical forward PE has been. Therefore my buy price has to be at least 20% below that, so under 50 pence. It may never get there, but it's still worth watching: these things have a habit of over-adjusting eventually.

I should probably change my name to Sathorn if you're Bangrak. I'd be happy to meet for coffee if you're padding around the Silom area.

Https://twitter.com/davidshahata/status/1720773151930359949

Https://electrek.co/2023/04/07/toyotas-new-ceo-adjusts-ev-plans-but-sticks-to-a-hybrid-approach/

This is a picture-perfect example of a large corporate caving in to the eco-mob, aided and abetted (as ever) by lazy journalism.

I urge people to watch the Robert Friedland video in my initial post on this string.

I prefer scientists over activists.

Thanks, LN: will do.

I attach two excellent truth-bomb videos here. Peter Zeihan and Robert Friedland are both superb thinkers. Their messages are why I remain very interested in SLP as an investment (just not at current prices). There's the small matter of getting the CCP to buy in to the logic, of course.

All the virtue-signalling Torquils and Jocastas at the BBC would do well to watch and listen.

https://m.youtube.com/watch?v=8P95NFlAnmY&pp=ygUYemVpaGFuIGVsZWN0cmljIHZlaGljbGVz

https://m.youtube.com/watch?v=dWbDHovRuHU&pp=ygUQcm9iZXJ0IGZyaWVkbGFuZA%3D%3D

The BoD has historically been admirably dispassionate on dividends with Jaco continuing where Terry Mc left off. The policy is pretty clear, though they could change it of course.

I'm struggling to see a profit after tax of much more than USD10-12m at current basket price levels. A much lower FY24 FCF than FY23 will surely result in a significantly reduced dividend: that is likely to drag on PI sentiment. That said, the dividends are of course a sideshow to the underlying financials.

This is well-run company that is trading on a forward PE (on profit estimates at current basket price) which is significantly higher than it has been in the last few years (even taking account of the cash pile). I'd certainly like to buy back in at some point, but that price point well below today's price.

As a side note: EVs are virtue-signalling delusion on a global scale, but it doesn't mean that the Chinese will stop manufacturing them (coal-fired cars). PGM prices are anyone's guess but the Matthey analysis is worth reading.

Hi scotpak,

I agree, but my point was that if we don't get it refinanced and we aren't able to swing our Naira balance to USD and pay off a chunk of the existing debt, then we're going to find this world of debt and fx exposure pain continuing for some time.

Hi Rocky

The Chad settlement timeframe suggestions were LST's, not mine; and I think he was just throwing an idea out there (not wishing to speak for him, of course).

For the record, I expect no settlement at all on Chad and I certainly wouldn't want us to take on operatorship again there. It is simply too risky, both financially and reputationally. Since we've allegedly had Nicholas de Blanpré at the pointy end of a gun from these punters, that's a hard pass from me.

Additionally, the Chadian's can't easily offer us operatorship again: it would be politically weak and they'd lose face. They might offer a financial settlement, but I doubt it would be particularly attractive: how do they fund it? And management surely says "see you in Paris (and New York)" if the Savannah case is as strong as we think it is.

The main share price movers that we know about from the suspension date are:

Debt restructure (we pay a significantly higher interest rate now);

FX losses (which may not have finished yet);

SS (of course).

Chad/Cameroon settlement is a long way off, maybe two or three years (in my opinion) though of course as LST posted, the expropriation isn't priced in: thus mark it to zero. Niger was valued at zero by the market before suspension and will remain at zero after.

As TIL rightly says, estimates of the SP are anyone's guess. My punt at 15 pence if SS aborts is based around my DCF model which I shared in the last week of August. But it's still a punt.

Best wishes

I said some weeks back that absent SS, we come back at 15 pence-ish. No reference was made in the interims to another hydrocarbon deal, so perhaps what was being worked on has fallen away. Maybe they're just staying silent though.

Agree that the market will price CC at zero, but perhaps that's a buy opportunity for the patient private investor. Niger clearly has no increment to share price until some oil flows to Benin.

Don't think the IIs will bail, but they'll be seriously pressuring the BoD.

All that said, SS is still live apparently. My guess remains that it's all about the licence extensions beyond 2027.

We need to put a GPS tracker in Knottie, like one of those Jason Bourne films. At least we'd get some visibility that way.

Reading everyone's posts here with interest. (Well, nearly everyone's, anyway.)

*it's, not *its.

The longer this goes on, the more I suspect that extension of the operating licences beyond the remain three-ish years (I believe) is likely to be a key outstanding issue.

Do any oil-industry people on here have experience in the remaining timeframes at the point when these things are extended? Operators are hardly likely to push the financial envelope on capex if they believe its the end of their tour of duty.

My target price to buy given the current basket price remains below 50 pence.

This looks better than I had expected.

Good production numbers.

Operational gearing tells its own story when you compare bottom line profit and basket price for this quarter with those of the previous quarter.

Nigeria Sees $10 Billion Inflows Easing Liquidity Crunch

https://www.bloomberg.com/news/articles/2023-10-23/nigeria-sees-10-billion-inflows-easing-forex-liquidity-crunch

I won't paste article for fear of Mike Bloomberg's lawyers approaching me, but it mentions weeks as the timeframe for this and also the official NGN rate reaching nearly 1,000 a few days back (already discussed on this board).

"The videos, which were circulated on Sunday and Monday, purportedly showed the men engaging in intimate acts with other people..." Well, at least it was people, I suppose...

I'm a bit confused on the NGN issue, spot quotes appear some stronger at about 780 to the dollar. I suppose the article is right. If so, expect another fx hit to H2 p&l, albeit smaller than H1. Sigh.

I think investors are sunbathing on the railway, Lynx.

Can't believe it is back at 85 pence. Sure, Rh is up 25% in just a week or so, but the current Rh price is comparable to or marginally lower than the Q4 average when net profit was just 3.1musd. Pt and Pd both still about the same or marginally lower than Q4 average. Q1 profit will be trivial. Q2 at these levels might be 3musd. So let's be generous and say profit after tax of 10musd for the year to June 2024. Strip out the cash pile and this still trades on a much higher multiple than it ever has since I first invested. I'm not trying to annoy anyone with these comments and perhaps I've got things all wrong. I have no position right now. I'm happy to consider where I'm mistaken here.

Thank you, JD; appreciated.

Thanks, Rocky. Very kind of you to share this.

I feel that Sally, understandably, has to toe the line here. That said, it's clear that the deal still has a pulse given her comments.

One other thing: I don't believe that the interims repeated that reference to another hydrocarbon deal closing by year-end. I may be reading too much into matters, but perhaps other deals may have fallen away.

I'm hoping that fellow poster JDC might find out the current state of Naira liquidity (in size) when mingling at the Africa Energy session in Cape Town. We'd love your insight, JD. In between glasses of Stellenbosch, of course.

Best wishes from Belgrade.