Member Info for Daisan

Yes, disappointing share price action but the commodities complex has turned from bull back to bear at the drop of a hat (or Trump tantrum, whichever you prefer). There is some reason to believe that this may be reversed equally quickly. If not, then I'm afraid that the world is not going to have enough commodities in the next few years and we will see more price action that mirrors that of Vanadium recently (that is what a supply deficit looks like).

As for comments on the board relating to charts and price targets, I am sure that we have all seen these before from small AIM investors. They usually disappear as their investment pot diminishes. There are times that we all go through where we believe that we are ace investors whereas in reality we are lucky enough to have stumbled upon a share that shoots up in price. We all need that dose of reality on AIM that comes with the realisation that, actually, we are not God's gift to investing and that AIM really is not a great market to try and earn a living on.

Yep. Stop losses on these kinds of shares are difficult - you want them for protection but the market knows they are there for the taking. 4p is an obvious stop loss so it wouldn't surprise me to see market makers dip down there to trigger them.

Football is all about money and has been for some time. If it was a share I would say 'avoid'!

I think that the Mokopane PFS is a historical document now and bears little resemblance to what an actual operation would look like. I would expect a BFS/DFS (whatever you would like to call the next step) would involve radically different numbers for production, opex, capex and price (higher, lower, higher and higher). Mokopane as a resource would support much higher rates of production. I also expect direct ore shipments to be explored/announced on issuing of a licence in the same form that Tando are trumpeting.

James0309,

That is exactly the point - they are buying in the market, which should raise demand, and then put into treasury. They don't have to be cancelled but the likelihood is that they would so there would be less shares and eps would increase.

Sorry, I have to disagree on the implications of a share buy back. There isn't a great deal of difference between the reasoning for a share buy back and a dividend - it is the return of excess capital over and above that required for investment plans. So you would have to level the same accusation at dividend payments. Buy backs are considered a more tax efficient mechanism than dividends. Note that this is the return of capital over and above that required to grow the company in Bushveld's case.

Buy backs and dividends are useful tools in the use of capital and to be encouraged where the company has excess capital rather than frittering it away uselessly as we often see with cash generative companies e.g. by making an earnings diluting acquisition. I am not saying that the current board would not use the money wisely but if they have sufficient capital to invest then why not return the excess to shareholders?

Ummmm. I think that you might need to get out more!

The issue is ever the same with RRR and RGM. Andrew Bell. I strongly suspect that if he was removed from the equation the share prices would double overnight. I would certainly consider buying if he goes as the general market perception is that whatever happens with the assets, it is only AB that benefits.

So Warren Buffett likes a Friday evening RNS! I recall that what Buffett actually likes is contact at odd hours as he knows that the company is probably desperate and requires an instant injection of capital. It is hard to say that the news is good on this basis.

Wul_1976, Just checked. It was a Thursday. And even if it was a Friday, it would be the exception that proves the rule!

I don't like Friday after market RNSs. They are usually bad.

Well, we are certainly due some on several fronts and it is Mines and Money next week so it would be a great PR opportunity. On that basis, I am going to say no. ;-)

It's a strange one. It could be a rollover.

There will not be a share consolidation.

Lindon,

I think that everybody would agree that sufficient funds should be retained by the business to carry out investment plans. What we are looking at in terms of distribution is excess to funding requirements and it is an important part of corporate financial discipline. Too often we see companies make large profits and then look around for something to spend them on. FM is very good at this and should retain more of the money for investment. However, by returning money to shareholders it ensures that the decisions made are always fiscally disciplined.

knuttie,

Exactly. A policy should state what percentage of income will be distributed in the form of dividends. I think that it is a great thing to have as it makes the whole process much more predictable. I would also hope that the distribution is in the form of 'at least x%' as this would give the company some flexibility to increase the payment should profitability prove to be extraordinary or maintain it should profits fall but the company sees benefit in smoothing the dividend. Although flexibility tends to imply that the percentage is lower.

Let's face it, Tony Manini is the driving force here and he has a substantial holding so his interests are very much aligned with the shareholders. I suspect that he is none too happy about the impact of the delay to the BFS on the share price but would not have taken the decision lightly. Clearly the financial environment has transformed since the orange one decided to shake the world up somewhat. As such, it is difficult to draw any conclusion other than the BFS was not deemed sufficiently attractive to achieve the necessary funding (you have to assume that a draft was passed around to potential partners).

Enjoy!

I think the initial announcement will be somewhat less precise than that. They have indicated that they are introducing a policy (rather than a dividend per se) which would suggest something like 20% of net profits (or some such). From that we could draw conclusions.

I would suspect that the net result of this would be something like a 1p/1p interim/final dividend for 2019 (which would cost approx. £22m for the year). It would also not be a great surprise if there was a sweetener earlier but I would be happy with just a policy currently.

Based on a conservative view of current information (74% Vametco, $120/kg, 3000 tonnes production, $40/kg all-in costs and no other sources of revenue or costs), an estimate of net profits for 2019 would be about £100m at current exchange rates.

I should point out that production should be higher but I want to see some evidence that the production increases are bearing fruit (we don't have that currently but I am hoping to see it in Q4). In addition, costs should be lower but I am cautious! Finally, the Vanadium price is an unknown but, whilst some are calling for dramatically lower prices, I still see no evidence to support this. Quite the opposite, so I believe that price pressures will remain upwards until there is a change in the supply/demand balance.

Good to hear that it is raining fatbanker. Now, if your next update could also state that the food is horrible and the beer undrinkable, that would improve my spirits on a rather dreary English morning!