The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Polymetal share price is reflecting near term panic, weak sentiment and full impairment of Russian assets.
However, Kinross Gold Corporation this month closed a $340M sale of their Russian assets, with this price reduced from an earlier agreed $680M between the purchaser and seller.
According to Kinross Gold Corporation's 2021 Annual Report, on Page 55, Russia Gold Proven & Probable Mineral Reserves were 4.149 Moz and grade 2.0 as at 31st Dec 2021.
Polymetal has 17.80 Gold Equivalent Moz of Proven and Probable Reserves in Russia with higher grade.
In my opinion, the transaction by Kinross is equivalent to a near fire sale price, however it provides evidence that there is value in Polymetal's Russian Assets and they are not a write-off.
I trust the Polymetal management in their ability to navigate this challenging macro, political and war backdrop.
All Asset Classes are down significantly YTD except one - Gold.
thanks,
Celtics.
Links -
https://www.kinross.com/news-and-investors/news-releases/press-release-details/2022/Kinross-completes-sale-of-Russian-assets/default.aspx
https://s2.q4cdn.com/496390694/files/doc_financials/annual/2022/Kinross-Gold-2021-Annual-Report-FINAL.pdf
Using company annual reports and company statements. I have put together a summary of those key items that underpin fundamental valuation.
I am not here to pass judgement on whether I think Polymetal is under/over/fairly valued, you have your own opinions. I am using numbers and financial performance delivery from the annual reports and company statements to evaluate the companies against one another.
I have also listed a separate valuation for Polymetal - Kazakhstan only (that effectively attributes no value to Russia) in the first column which assumes all debt in worst case is absorbed by Kazakhstan. While also doing a separate analysis on Polymetal - Group, which includes Russia assets.
Item | Polymetal – Kazakhstan only | Polymetal – Kazakhstan + RUSSIA | PJSC Polyus | Barrick | AngloGold Ashanti
Proved & Probable Reserves (GE Moz) | 12.09 | 29.89 | 101 | 69.00 | 29.83
Reserve Grade (GE g/t) | n/a | 3.5 | 1.9 | 1.71 | 1.89
Total Cash Cost /GE oz | $643 | $730 | $405 | $725 | $963
2021 Revenue $Bn | 0.98 | 2.89 | 4.97 | 11.99 | 4.03
2021 Adjusted EBITDA $Bn | 0.63 | 1.46 | 3.52 | 7.26 | 1.80
2021 Net Income $Bn | 0.43 | 0.904 | 2.278 | 2.02 | 0.62
EBITDA as % of Revenue | 64% | 51% | 71% | 61% | 45%
Net Income as % of Revenue | 44% | 31% | 46% | 17% | 15%
Share price at Friday 10th June 2022 | £2.33 | £2.33 | 10,192 Roubles | $21.03 | $17.63
FX at Friday 10th June 2022 | 1.23 USD/GBP | 1.23 USD/GBP | 0.0174 USD/RUB | 1.00 USD/USD | 1.00 USD/USD
Share price $ Equivalent | $2.87 | $2.87 | $176.86 | $21.03 | $17.63
Shares Outstanding | 473,626,239 | 473,626,239 | 136,069,400 | 1,779,331,037 | 417,501,452
Market Capitalisation $Bn | 1.36 | 1.36 | 24.07 | 37.42 | 7.36
Net Debt $Bn | 1.94 | 1.94 | 2.20 | (0.13) | 0.77
Enterprise Value $Bn | 3.30 | 3.30 | 26.26 | 37.29 | 8.13
Enterprise Value /Adj. EBITDA | 5.24x | 2.25x | 7.47x | 5.14x | 4.51x
Enterprise Value /Net Income | 7.60x | 3.65x | 11.53x | 18.44x | 13.06x
thanks, Celtics.
Interfax - Polymetal planning to invest $130 mln in construction of power plants in Kazakhstan
link separated - https: & //interfax.com/newsroom/top-stories/80089/
thanks,
Celtics.
Just in ... Russia appearing to make concessions.
https://www.ft.com/content/7f14efe8-2f4c-47a2-aa6b-9a755a39b626
Thanks,
Celtics.
Everyone that posts on here is either long or short and their opinions are biased naturally towards their position.
When there is a lot of bearish sentiment and fear ... I take that as a buy signal.
Listen to Jim Rogers regarding investing in a crisis and specifically what he says about Russia and the invasion. See link below.
https://m.youtube.com/watch?v=1ybUDFSo2_8&t=859s
Separately, Lyn Alden (@20.00 mins) and Steph Pomboy (@16.30 mins) also see opportunities in Russia. See link below.
https://m.youtube.com/watch?v=yXbdC1bnT54
Thanks,
Celtics.
This is where you can find out all the investments that the Norway sovereign wealth fund has.
As of 31st Dec 2021, they held 1.92% of Polymetal.
https://www.nbim.no/en/the-fund/investments/#/2021/investments/equities/7140/Polymetal%20International%20PLC
thanks, Celtics.
In addition, insights from the Dean of Valuation - Aswath Damodaran about investing choices in the current situation which includes Russian exposure. https://mobile.twitter.com/AswathDamodaran/status/1505314063793876993
Thanks,
Celtics.
Some interesting comments from Jim Rogers on the George Gammon show regarding investing in Russia and during crisis.
https://m.youtube.com/watch?v=1ybUDFSo2_8
Thanks, Celtics.
Pre Invasion -
Shares Outstanding 473,626,239
Share Price GBP £10.46; Share Price USD $13.75
2021 Op Profit $1,208 MM
2021 Net Income $904 MM, FCF $418 MM
Market Cap $6,512 MM; Net Debt $1,647 MM; Enterprise Value $8,159 MM
EV /Net Income = 9.02; EV /FCF = 19.52
Post Invasion -
Share Price GBP £1.17; Share Price USD $1.54
Market Cap $728 MM; Net Debt $1,647 MM; Enterprise Value $2,375 MM
Market Cap reduction = (88.81)%
Enterprise Value reduction = (70.89)%
Notes -
Kazakhstan Assets (Kyzyl and Varvara) contributed 34% of Revenue per 2021 Annual Report.
Kazakhstan Assets (Kyzyl and Varvara) contributed 45.4% of Op Profit per 2021 Annual Report.
Kazakhstan Assets (Kyzyl and Varvara) are 40.4% of Proved and Probable Reserves.
Kazakhstan assets are separate from Russia assets, the subsidiaries /legal entities are listed in the 2021 Annual Report.
Completely contrarian to purchase POLY, however I built a small position sub £2.00 despite knowing there is significant downside risk to "Russian" stocks and potential delisting. The Kazakhstan assets in my opinion more than support the current share price on a fundamental basis, and the Russian assets will likely find buyers in China/India.
thanks, Celtics.
Hi Harel - Not able to use your link. Is the content available from EPA website?
Have seen the following today which outlines 2022 as the start of the new drilling campaign on Kaieteur.
https://www.epaguyana.org/epa/component/jdownloads/download/29-screening/947-kaieteur-12-well-e-a-screening-report?Itemid=418
thanks,
Celtics.
Bought a small position today. Based on the 2020 Annual Report, 30% of Polymetal Revenue comes from Gold mined in Kazakhstan, and therefore that Revenue stream is effectively free from sanctions imposed to Russian companies since companies have independent legal entities in different countries that they operate so that Taxes are incurred and paid to the Government fairly in the location of where the Revenue is earned.
The other 70% of Gold /Silver that is mined in Russia is likely to see an impact from sanctions, however, China and India are both significant buyers of Gold and so far have not indicated that they will impose sanctions on Russian companies. I expect a significant drop in Revenue from sanctions and that's the reason for the sell off in the past 5 days, however, ultimately the asset /commodity is there ... the Gold /Silver reserves under Polymetal ownership are not going to disappear. In the near-term I see Kazakhstan providing that necessary cash flow to service debt and generate good income, and new Sales channels in China /India for the gold mined in Russia.
thanks, Celtics.
Great spot Harel, thanks. Sharing the public notice released by EPA today.
https://www.epaguyana.org/epa/eepgl/download/16-eepgl/932-canje-12-well-exploration-and-appraisal-project
thanks,
Celtics.
I agree Tarpon-1 is a super exciting well given it's location and I am not aware of any other wells in the Guyana-Suriname basin that have tested the Jurassic age and that would be a completely new play.
I think 2022 will be a good year for WTE shareholders. Whilst, I do believe we will see drilling on the Canje block again in the first half of 2022, there will be multiple step-out wells drilled in 2022 on other blocks that would be positive for WTE shareholders should they return a commercial outcome - Stabroek (Tarpon-1), Block 42 (Zanderij-1), Block 53 (well name not disclosed).
On a separate topic, I would not be surprised to see WTE increase its exposure (acquire more shares) in either JHI or Cataleya.
thanks,
Celtics.
Hopefully we will see Cohort 1 data shortly.
Perhaps someone has already highlighted this. While Dose Escalation indicates that the investigators are happy with the precision platform safety and deservedly is a significant milestone, data from cohort 1 alone will be indicative of whether the precision platform works.
I recall the following statement made by Neil Bell on a 2021 Business Update - https://www.youtube.com/watch?v=CiHYIrrgktc
Neil Bell @ 27.24 mins - “the 1st cohort is going to be really important because we are going to be looking at the pharmacokinetics not only in that 1st cohort but also subsequent cohorts, but the first cohort is really important for us because we want to actually demonstrate that what we’re seeing in the animal work is actually translated into the human situation. So, we should if all goes well be able to actually talk about that data at the end of Q4 this year.”
thanks,
Celtics.
What we now know from Apache RNS is that Bonboni discovered 16M net oil pay (25 degrees API) in a single Maastrichtian zone and importantly the well confirms extension of the petroleum system to the north.
Since Total are a JV partner at Canje, I would expect this well result to be incorporated into the broader dataset of step out wells conducted and guide the next well target on Canje.
Eco Atlantic presentation provides mention that there a multiple billion barrel prospects on Canje block.
While the WTE share price is down, if one is prepared to be patient across next 2 years there could be some significant returns.
thanks,
Celtics.
https://investor.apacorp.com/news-releases/news-release-details/apa-corporation-announces-successful-flow-test-sapakara-south
thanks,
Celtics.
Another step out well, with results due imminently per Notice to Mariners disclosure no.74.
Maersk Valiant moving to next location today.
https://www.mas.sr/en/bericht-aan-zeevarenden-2021
Thanks,
Celtics.
https://maya.tase.co.il/reports/details/1351460/2/0
English in 2nd half of PDF.
thanks, Celtics.