Member Info for damofarl

Jiffybag;

And the next SP drop greater than the dividend?

Jiffybag; is that hedge book gain of $812m a real gain, or an 'oppurtunity' gain?

If it's the former, I'll stand at the back of the class. And you can go to detention for reading, focusing in on the bits of the interim report you like, but ignoring that that doesn't support your narrative.

Cash is king, debt is the noosemans sling. For such a company, to have insignificant cash, and increasing significant debt isn't accretive, isn't demonstrating success. It's subsistence.

From the landing pages of DEC's website.....

...'Since 2017, we have completed 22 acquisitions for a combined purchase price of approximately $2.7 billion'.

Rusty said this were all accretive. Rusty says SAM is getting more out of these assets.

So why, after having paid out c. £600 million in that time, is it valued at a billion less than it spent?

Is it because it has been more depletive than accretive?

Is it because the market (posters here) seemingly so ignorant of the large IFRS 'opportunity' only losses hammered the SP whilst hypocritically failing to rejoice the recent large IFRS 'oppurtunity' gain?

Is it because the main be benefit has gone to loan/bond holders?

Is it because the Co bought back shares higher than the new shares issue to cover the latest acquisition?

Is it trust because no new issues were promised, followed with vitesse by a new issue?

Is it because a new buyback was announced, at a price giving positive value reflecting DECs potential but seemingly continual drops still don't offer value enough?

Is it because they are so proactive in not having cash at hand, any buffer, from their so accretive assets by using their margin to aggressive reduce debts, whilst debt has increased?

Or is just that Rusty has gone, rusty?

Agricore; had a look at that Quoted Data vid....yes did chuckle....quite liked the show so we will view a few more so thanks for that extra information/view nugget....they all help.

Note the quite dispersing comments on BGLF (which I also hold), pertaining to it's planned wind down, in that it could take 7 years to get wind down proceeds. Did counter that by saying would probably be quicker, but didn't really focus in on that greater value that would ultimately be realised if it did take that long. Personally I hope, and believe - +because of the cross investment/links in parent company), that the run out is long, to avoid a firesale if what are still greatly performing assets. In BGLFs wind up proposal they are extremely detailed/proactive/professional in pre stating that they will continue paying dividends whilst income received (which will only stop on realising an asset back to shareholders), and their awareness of needing to delist/decost to reflect a lower workload/income.

Also noted in that Qouted Data piece that DGI9 topped their analysis of infrastructure type plays with the highest yield and value ratio, but then that is no surprise to either of us.

Greygeorge; there is at least 2 here, including myself, that have suggested this could be Enron MKII, so not all are lost in the 'In Rusty we trust' cheerleading crowd.....and in the scenario you suggest, who will want discarded not w distressed assets? Step up PrePack ReRack Rusty.

Agricore; this is our kind of bag. Value, yield. Boringly predictable visible income.

The SP has never recovered from over reaction to costs of funding commitments/debt obligations, seemingly blind to the sustainability of such costs from income. The reavulatuon of it's positives is inevitable.

2; the base case for Base is, at worst your money back and a bit, at best, 20 years of juicy dividends AND SP appreciation.

Excellent results for the year, within a smidgeon of the preceding record year. Yes aided by strong pricing, nonetheless shouts astute mgmt of mine extensions to mine end. Guidance production for current year is a bit below 50% of 2023 and the advised lower quality product mix will impact income/unit cost but should still garner around $40m.

Dividend. Well excellent. In my opinion, I'd have preferred somewhat less, as I'm here for the long term, and the Toliara oppurtunity. That said I can't fault the mgmt focus/decision here. The proceeding dividend was less than expected and certainly less than cash balances/the current cash generation should of warranted, but mgmt quite clearly signalled, this as a conscious decision to balance rewarding shareholders whilst retaining considerable cash for Toliara, which at that time were confidently intimating was imminent. The annual report clearly shows that (due to mining code rewrite/presidential elections) this isn't imminent, hence the expired time to start, has generated another year's worth of cash presumably beyond their target, which, as they are very focused on, they are returning to us, shareholders. Also like that they seemingly are indifferent to the day to day SP, ignore buybacks, and keep it simple by returning directly to shareholders.

SP performance. Well it does gyrate somewhat, and ultimately it's progression is impacted by fears over income (mine) expiry and the costs of Toliaria - fund raise/bond issuance at elevated rates. If we take Toliaria at $700 million cost before first income, I can see that concern, yet feel it's unfounded. If we presume Kwale end, end of 2024, a back of an envelope calc says there is $93 million cash, + $40m for 2024 production, + $23m finished inventory (at cost), less $40m for this and subsequent dividend leaving $116m net.

The Toliara project suggests 2 years before first production (income). If the entire cost was raised through bonds, at 10%, BSE could sustain a 10% coupon for 18 months, on that worse case scenario( no uplift on inventory cost at sale, no mine extension etc). For a project that would take just 4 and a half years to recoup costs, but has a 34+ year mine life (27 years licence life), I don't see that they would struggle to get bonds, especially as the company's long term offtake agreements with major buyers/user's, means, as they have intimated before, they will be a factor in the capital raise (upfront loans/equity share repaid from long term preferential product delivery). If these long term customers collectively contributed or guaranteed bonds to the tune of say $200m, Base's cash would cover interest for over 2 years to production (income). The results highlight that they are ".....identifying broader funding options". I don't see a direct shareholder fundraise - they can do it without, even at elevated bond rates.

As for being a quiet board. Yes it is, and all the better for being so!

The base case for Base, is at wor

Whatcangowrong; welcome. Totally agree with your point about the contributions here that greatly add to our understanding here. And also agree with your point regarding posts focused on the person rather than the company.

Your comment, ...... "but it’s a serious situation for some with personal livelihood impacted...." rather concerns me though. Whilst I wish noone ill, financial or otherwise, this suggest people have not fully considered the risk/reward balance. Everyone's circumstances are different, just as investors objectives here are. If my objective was to get a 5 bagger and make an exponential gain, I would also have to accept I may make a large loss, and be comfortable with such, that such negative event wouldn't impact materially my livelihood. If my objective was to garner a secure income that sustained without impact my livelihood, I would h consider whether a stock such as this, indeed, investing in single stocks is appropriate.

Frankly, if the livelihood of someone invested here is seriously impacted (negatively), I have no sympathy for them. Chase the oppurtunity if you can manage with the risk. If you can't, don't.

As for being underwater, I like many are too (albeit there are many sitting handsomely), but I'm comfortable with that, both in that I3E is just a part of my portfolio so singularly doesn't materially impact me, and that ultimately I believe it is fundamentally undervalued. And for the patient will out prosperously.

PUTUP: as ever, thanks your contributions.

Agricore; yes CGEO has been excellent for me, but I've not sold out/down at all as there really is much more to come. I also hold BGEO, albeit I sold down too early, but one can't get it perfect every time. My rationale was that CGEO still have me 20% of BGEO whilst diversifying into other opportunities. Your Russian rationale is reasonable, but the reality has been that CGEO/,Georgia itself, has been very much a beneficiary of Russians' physical and financial flight to stability. Considerations here, CGEO's 20% holding in BGEO alone represents 75% of CGEO, despite being just 25% of their portfolio, and according to my calculations is earning a (BGEO dividend) yield of around 17%. The pharmacy business will be the next spin out in my opinion (a couple of years), but is already paying a dividend equivalent to 1.2 % of market cap. One has to consider currency impacts, but they do seem to manage their debt/FX.

I think it hard to buy again higher than i've sold, but I really do think you should reexamine. The RNS today, is a model of detailed simplicity and transparency. There is a couple of niggles in there in portfolio companies, but nothing to concern in the round. And yes the NAV (increased) is mind boggling.

And yes another FAIR 2cs chugging into the coffers.

Good luck, keep up the insightful/analytical posts I see elsewhere.

What sad sad news.....

Agricore; i know we both tend to follow yield, but I also note you follow deep value. Do you follow CGEO? It has had a good run up recently, but to me there is still deep unrealised value in it. No dividend, but trading at an outrageous discount to NAV, and knowing we are akin in the value in IPO, and the patience required there, thought it should maybe be on your radar (if not already). Provides diversification both asset class and jurisdiction wise too.

Gavster-NBC; we maybe not be fans of buybacks, but they do seem to be working. One of my other dislikes of them is that invariably they are done at the top of the market, which we know with the NAV discount isn't the case here. Interesting to see them still buying consistently now at 51/52 seemingly with no let up which does suggest both confidence and cash to spare. Interesting too is the sheer number (proportionately) that they bought back around 48 which must have been value accretive (against both current SP and for NAV).

Do agree with you though that if they are swilling in cash, what new opportunities are they investing in - or are the just churning the quality of previous vintages?

Whatever way, looking good here for sure.

Gavster-NBC; we share a strong dislike for buybacks. My issue with them generally is how too often they are used to inflate (poor) performance and/or used to trigger performance related pay/free share issues. AND that I can't recall one that has actually enhanced value, although I do feel here could be the exception to my rule! I can't see any director/founders performance related share issues here, so that major misgiving isn't applicable to me here.

Divvy announcement - yes imminent, but we know it's 2c's.

I think we are all agreed that the currency correction is overdue and will provide us a tailwind.

TORO - I'm less warm (albeit unconcerned) on them currently - I do think they have had a blip/lost their way a bit recently, but that happens in these stocks from time to time. I see BGLF which was my first entry into this sphere, is voting to go into wind down which surprises and disappoints me, being as it has been such a consistent reliable income source....the upside of course is that, for the patient, the NAV discount will be realised (as can be seen with the fair realisation shares).

Agricore; thanks for the aa4 details, still researching, but definitely catching my eye.

As for LINV, I'll respond more on that directly on that board in due course, but thank you for bringing it to my attention - it is very much my kind of play of sustainable high yield and/or deep value. Quickly on it, as someone who holds a number of builders/property companies, I do think there is an overreaction downwards on such stocks that will correct, and I also note how LINV is morphing into earning income from servicing mortgages/loans, rather than trying to earn a margin on them. As such I have some understanding of this, having been invested in a US stock (RITM) for some time, which earns it's income as much (more) from servicing loans than originating them.

Generally - dividend data is a great sight, not least because of it's simplicity - indeed it was that sitr that set me off researching these kinds of stocks, with BGLF being the first.

Note the recent, seemingly solid, slow but sure rise in the SP, which to me is 50/50 performance and currency change. And with FAIR being my single biggest CLO type stock, I'm naturally pleased about that.

.....LESs like a basket case

Kingsuarez; taking your first rough calculation at face value , they are carrying $224 million surplus into 2024, so after covering the 2024 shortfall of $20m, still $204m in cash. So to answer your subsequent question, would new acquisitions require a new fundraise/new debt obligations I don't think so. The last 2 acquisitions were at headline amounts of $240m and $250 million suggesting a new acquisition could be from cash - not least (to my lazy memory), there is still unused commitments from the Oaktree Capital joint purchase agreement.

Generally - previously there has been much posting/educating around the impact of IFRS 'oppurtunity' loss - surely the drag down that misunderstanding of this will reverse, as surely the next update should show a considerable 'oppurtunity' gain. As for the recent discussions/suggestions that the dividend should increase, personally I think it shouldn't be, merely maintained for a year, with excess cashflow used for me to retire some debt (deleverage), and/or build an acquisition cash warchest. If, IF, the sp rises towards not so distant highs, it will still be yielding 10%, healthy/rewarding enough, whilst simultaneously looking, to the I'll researched, like a basket case.

Raxfactor; thanks for that link.

I would hope that that Shell deal doesn't include Seplat in that it means they will go with what was originally agreed, ergo Exxon do the same with us.

The key bit in that link for me was - '.....advisers to the leader (Bola Tinubu) in the run up to his inauguration recommending that his administration "close out" outstanding divestments being sought by international oil producers in order to boost petroleum output', which bodes well for us.

2 of 2;

....are often just placed in the risky/specialist category without justification, by people who will chase Persimmon's yield without even a momentary consideration. I think in the high yield field, as with any sphere (growth/defensive/income) that diversification is the key, and just as investing in a couple of US pipeline companies a few years back diversified me, the airline leasing sphere may too. I am particularly positive on the airline industry (albeit not airlines/travel cos), so going to have a deep look and come back to you.

Sorry for the long post, but hey I'm hardly clogging this board up!

Good luck all.

Agricore; you make a number of points:

I'm not sure the buybacks are working as you suggest by reducing the NAV discount, as the very recent report suggests they are growing beyond 16% - I do think they are working in stabilising the SP, which may have drifted down otherwise to reflect the 10%ish £/$ fluctuation since Januaryish. And the increased volume of daily trades (highlighted in the report) are undoubtedly the explanation for the very tight spread now, which has never been below 5% in the 5 years I have held. Indeed, I have always discounted 5% on the way in, 5% on the way out, ie the first years yield b cause of the near 10% spread being the norm in this sphere.

Realisation shares. Yes I've just disregarded them, not selecting some, and how well they are doing. But we are still reaping the benefit too, still being in the funds that those shares represent in wind down. And to be fair, people that invested 10 years ago, that questioned the SP/NAV disparity throughout are now be rewarded. Good luck to them. Their rewards will end soon, ours are ongoing.

Cash flows/dividends. Yes, I mentioned in a previous post the safety net that level of inflows gives, albeit one should note they are lumpy ie not equally received throughout the year. Cash at hand of about 12.5% suggests they certainly have the ability to sponsor new issues, as you suggest, they are obviously not choosing to, like you, I believe a judgement call that I happily support.

I do think it's an interesting time for FAIR, as one Fund (II) is in rundown to 2026 (last investment 2021), so maximising income against minimal risk, and Fund III expires now, with a possible 2 year extension (then 5 year rundown), which means both that the high risk at initial investment has dissipated, and continually reducing whilst repayments/income are increasing/maintained. On that GavsterNBC has a point - will they be doing new CLOs to build a new future, new/maintained income stream.

Currency considerations. I think here the buybacks have minimised the drop I have seen across all my CLOs of around 10% due to the £ strength. I too see that dropping back, and I had even considered a new purchase here just on those grounds.

FAIR is throwing off cash. I still see a special coming down the line.

AA4/Nimrod. Interesting question. I actually looked at a lot of these stocks mid COVID, and at that time, whilst my gut was there was tremendous value therin, it was just a little beyond my high risk/reward profile. And I didn't consider again until you mentioned. Hindsight is a great thing - if I'd dipped my toe I'd be quids in now. That said, I've had a quick revisit since you mentioned, and I still think there is value/income in that sphere - I'm going to do a bit more research and come back to you more definitively on that! The 10%+ yield arena is definitely my focus, and with that comes risks, risks reduced/eradicated by research, as seemingly obscure complex stocks are often just p