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Portfolio Matters podcast on GMS: https://youtu.be/SNY1ff_tvFE
In case you haven't seen it Portfolio Matters did a podcast on ORCA a couple of weeks ago, which covers the company in some detail:
https://www.youtube.com/watch?v=FvLFBFq2Wuc
Hi Benbay001, thanks for the feedback. You are right that I only mentioned the oil and gas side in passing, and that that sied of the business should recover with the oil market. I think the share price needs a catalyst. The company seems strangely neglected by the market at the moment, it seems to be ignoring all the contract wins. I think that we have to wait for the next interims due on the 30th June to see if that provokes a reaction.
We have just covered Tekmar on our Youtube channel. Please let me know your thoughts (be nice). Full disclosure I have a decently sized long position.
https://www.youtube.com/watch?v=Rxm6qU7zVTY
I have sold all my gold shares except for Goldplat. Goldplat share price is currently 7p, H2 2020 fully diluted earnings per share 1.17p, PE ratio of 3. They have sorted Ghana out and are generally re-orientating the company as a pure gold recovery play. The continuing losses from Kilimapesa should soon be over. One to keep in the bottom draw and await a recovery in the gold price.
Cyberbub, thanks for the feedback. My apologies about the slip of the tongue describing the forecasts as being based on Cu at $4. In the presentation it states it as $3 several times, and I do say that later in the vid. I have added a clarification to the video description admitting to the error. Good spot. Thanks.
Actually I updated it now while on a conference call: https://youtu.be/hh2iifj9AQE
Cornishknocker, no offence taken. On the podcast we do our best but are very well aware that we don't know everything. We are very open to constructive criticism. I will update the description tomorrow.
Cornishknocker, thankyou once again for sharing your expertise. As someone new to the story it was difficult for me to find a way in. Would you mind if I added your comments to the description on the Youtube video? The more information the better. I will also add a link to this thread.
Diryan777, great vid. Thanks. We will be updating our Share Talks occassionally, after half yearlies etc.
Thanks for the positive feedback. As you may be able to tell trying to work out what the story was took me some detective work. Thanks to everyone in this chatroom for their help in pointing me in the right direction.
Thanks to everyone on this chatroom who helped me put this together for my youtube channel (not many subscribers as yet, but growing, and it is keeping me sane during lockdown). I would be grateful for any feedback or corrections.
https://youtu.be/hh2iifj9AQE
Cornishknocker, thanks for the clarification. I am convinced. I will have a punt.
Cornishknocker, thanks that is very helpful.
According to the 20th January H2 2020 production update forecast production for 2021 was Cu 6,600 -7,400 T (2019 5,299 T), Au 1,700 - 2,000 Oz (2019 4,887 Oz). As Ming comes back into full production why is 2021 gold production expected to be so low? Thanks
Hope2gain, many thanks. That is very helpful. I spent an hour last night trying to dig through this thread but there is a lot of it. I will search out the posts by Cornish Knocker as you suggest.
Dear all, I have just come across RMM and would like to understand it better before dipping my toe in. I have had a look through the annual reports but don't understand the price fall from 1.8p to the current 0.36p over the past 6 months. Can one of you highly informed gents enlighten me? Many thanks
I received this very full, timely and impressive response from Steve Poulton, CEO.
Thank you for your email which is very welcome.
In respect of the Tabakorole project, Marvel are required to invest US$3M in direct exploration of the project to increase their holding from 51% to 70%.
In order to increase their shareholding from 70% to 80%, Marvel are required to then undertake and finance a definitive feasibility study. The level of investment required to take the project through to a DFS is not specified, however it would likely be significant.
Altus can then elect to finance the project pro rata (at 20%) into production, or elect to dilute and receive US$1M in cash. As you indicate Altus will also receive milestone stage payments (of $150k and $100k for each of the above).
While the stage payments provide welcome cashflow, the value of the deal is in the investments made by Marvel into the project (that Altus shareholders do not have to finance). While the stage payments are received once, there are in effect two Joint Ventures, one for Tabakorole and one for Lakanfla.
Altus retains a 2.5% NSR on each of these projects. Marvel can elect to repurchase up to 1.5% (in three 0.5% segments) of the NSR on each project, leaving Altus with 1.0% on that project.
The repurchases will require Marvel to pay Altus US$3.33M per 0.5% on that project, equating to approximately US$10M to repurchase the full 1.5%. If the project on which the royalty is being repurchased has a resource greater than two million ounces, the cost to repurchase increases to US$5M per 0.5%, equating to approximately US$15M to repurchase the full 1.5%.
On the basis that the repurchase is on commercial grounds (i.e. the project is or will go in to production), the implied value of the 1.0% NSR retained by Altus would likely be significantly more than US$6.66M. By way of illustration if the mine produced 1Moz of gold in its life, 1% would equate to the proceeds of 10,000 ounces of gold being paid to Altus. At current gold prices the 1% / 10,000oz would be equivalent to approximately US$17M in gross cashflow (undiscounted to take account of the time value of money).
On the conservative assumption of a <2Moz resource and on a hypothetical speculation of 1Moz life of mine production, then if a mine is successfully built, shareholders of Altus could benefit as follows:
Up to 20% ownership and economic benefit from a producing gold mine (and any new discoveries)
Up to US$10M in cash from the 1.5% royalty repurchase
A remaining 1.0% NSR with gross cashflows of US$17M (undiscounted and at current prices)
US$0.5M in cash milestone payments
The same again on the Lakanfla gold project / also under JV with Marvel
Market circumstances (including the price of gold) can change. The above is purely for illustrative purposes and does not constitute any form of advice or recommendation.
I am a new shareholder of Altus and am trying to understand the economics of the Tabakorole project in Mali. Am I right in thinking that Marvel Gold can increase their holding in the JV from its current 51% to 70% for $150k, then from 70% to 80% for $100k, then to $100% for a further $1m. Hence the maximum upside for Altus is only $1.25m. Plus Marvel can buyback the NSR for $3.3m for the first 1.5% then $10m for the next 1%. Hence the absolute maximum that Altus will get from Tabakorole will be around $15m. That doesn't seem much for one of their best projects when they have a market cap of £60m = $85m. Is my calculation correct? Thanks
All figures from here: https://www.altus-strategies.com/site/assets/files/4831/altus-_active_jvs_royalties_-_november_2020.pdf